Israeli Study Finds that Foundations Are Not Effective in Checking Nonprofits

from the Nonprofit Banker:

An article was recently posted on Midot’s website highlighting a joint study done by Midot and Sheatufim. The study was presented at a Sheatufim conference on June 23, 2009. The many findings of the study include:

• Israeli philanthropic foundations are investing great resources in the grant process and in grant selection before the transferring of funds to nonprofits; however, most foundations lack clear criteria that accompany the process and rely only on the reports from the recipients themselves.
• Even though the processes of the different foundations are similar, there exists little cooperation between the various foundations.
• Most foundations do not rely on external professionals to help check the recipients’ usage of the grants.
• Most foundations do not implement a suitable analysis before the donation is given.
• Foundations reported a lack of evaluation and measurement tools to check recipient organizations.  Foundations also noted a lack of tools to help analyze the financial statements of the organizations.