Charity Research

Choosing the right Charities - It's all about return on capital!

The Charity Team, made up of volunteers, faced a difficult job selecting Kids Company for Bestinvest to support out of so many worthy causes, however, we had to whittle down our shortlist of seventeen charities to just one beneficiary in order to focus our commitment and our impact.

In choosing our charities we drew heavily on our experience of investment research. Finding a good charity is hard to do when so many are ideologically robust, so we set out a framework for evaluating the shortlisted charities as a way to help guide our choice. That meant checking each charity's financial statements, making an assessment of the volunteering opportunities available to our staff and for those charities that reached the interview stage asking senior staff some tough questions, which for example concerned staff remuneration and the allocation of the charities' resources.

Our goal was to identify those charities which were most effective at deploying their capital to those who needed it the most and this required in depth analysis of the charities' operations and finances. In a practical sense we focused on mid-sized charities with annual incomes below £10m because we wanted Bestinvest to have a meaningful impact, but that meant we had to focus on their financial stability too. Often charities have to pare back essential services during lean years.

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