Evaluating two Non-Profits

International Peace Institute vs. United Nations Foundation

In my last year of high school, I toured an orphanage that was also a charity. I still remember all those people working hard to help those kids, without expecting anything in return. Living in a world where social interactions have become business transactions, charities are a great way to give love to the world without expecting anything in return. Yet, how can people make sure that the charity that they’re donating to is credible and financially efficient?

Through research, I have compiled a set of criteria from William Barrett’s Forbes article “How to Evaluate a Charity” and Charity Navigator’s “Five Steps to Informed Giving” that will be used to compare between International Peace Institute (IPI) and United Nations Foundation (UNF) and decide which is a better charity to donate to. A good charity would be one that :

1. is a Bona fide tax exempt 501(C)
2. has good efficiency ratios 
3. has readily available annual and operational reports
4. has a well-designed website 

          Both charities, listed under the same category on the Charity Navigator, are involved in international peace, security, and affairs. Through their mission statements found on their respective pages on Charity Navigator (IPI, UNF), it can be concluded that the IPI is a policy research institute, intended to inform governments on better ways to maintain peace, while the UNF advocates for and supports the United Nations’ policies and activities. It is easier to find IPI’s mission statement on its website than that of UNF, which makes it harder for the average reader to decide UNF’s mission statement without further research.

1. Bona Fide Tax Exempt 501 (C) public charity    

First, to ensure that the charity is a government-official charity, you can search through the charity’s website or through Charity Navigator for proof of it being a “Bona fide tax exempt 501(C)” by the availability of Form 990. It is important to ensure that the charity you are donating to is real and government-official, so that you can rest assured that your money is going to the right place.

Form 990 can be found on the “Financial Information” tab in the UNF homepage website or under the "About" tab and on the “Annual Report and Financials” page in the IPI homepage as shown in Figure 1 below:

International Peace Institute-Homepage

United Nations Foundation-Homepage

                                            Figure 1: Finding Form 990 on IPI(top) & UNF's (bottom) websites

The fact that the forms are easily accessible means that both charities are transparent and frank about their finances.

2. Efficiency Ratios

Second, the efficiency ratios of the charities are compared on Charity Navigator website, where both charities are listed on a table and compared according to several factors as shown in Figure 2 below:

Figure 2: Comparing IPI & UNF through Charity Navigator 

Efficiency ratios give an idea on how each charity is spending its funds and managing its finances.

For instance, the overall financial rating of UNF is 89.44%, while that of IPI is 99.59%. Yet, the fund efficiency (“amount a charity spends to raise 1 dollar” according to Charity Navigator) of UNF is 0.04 dollars, while that of IPI is 0.06 dollars. Despite the small difference in fund efficiency, UNF has a larger appeal than IPI because of its lower, and therefore better, fund efficiency.

When taking a closer look at the contributions breakdown pie charts of both IPI and UNF, as shown in Figure 3 below, the government grants that IPI receives is 56.7% of its total contributions, while that of UNF is only 9.7%:

International Peace Institute Contributions Breakdown 

United Nations Foundation Contributions Breakdown 

Figure 3: Contributions Breakdown pie chart of IPI (top) & UNF (bottom) obtained from Charity Navigator

This shows that IPI is preferably supported by the government than UNF, indicating that IPI might be the better charity.

On the other hand, the IPI has a much higher program growth (measures the growth of expenses spent on program over three to five years according to Charity Navigator) of 9.6% compared to UNF’s 1.9%, indicating that IPI has been spending more towards its programs than UNF over the past couple of years.

IPI’s high program growth and great government support would make IPI the better choice

3. Annual & Operational Reports

Third, the availability and accessibility of annual and operational reports is assessed in both charities.

Annual reports give the public an idea on how and where the funds IPI receives go, and on what programs are they spent on. Therefore, the availability of annual reports clearly send a message to the prospective donor that the charity is trustworthy and accountable of all its funds and actions.

In the IPI’s website, the annual reports are listed under “Annual Report & Financials” which is easily accessed from the homepage. IPI’s annual report is listed at the middle of the page and in a red box, clearly marking its location, as shown in Figure 4 below:

              
         Figure 4: International Peace Institute website homepage - searching for annual reports


Yet, no annual reports can be found on UNF’s website, even under the Publications tab. When searching for an annual report through the search box, the results produced a “Five year annual report” that led to a blank page with no documents that lead to the five-year annual report that the page was supposed to talk about, as shown in Figure 5 below:

                 Figure 5: Search results for annual report (left) and the empty "Five Year Annual Report" Page (right)    


Because annual reports are easily accessible and available on IPI’s website than on UNF’s website, the International Peace Institute would be the better choice.

    4. Website Design

  Last but not least, the websites of both charities are evaluated based on organization and design. The theme colors used in the website, along with how content is catalogued and organized, give a message to the public about the values of the charity itself.

For instance, the color blue represents trustworthiness and honesty, while white represents professionalism, and gray represents formality and sophistication.

Both IPI and UNF’s websites use the color blue in their headings on the homepage and logo, clearly trying to imply to the prospective donor that they’re trustworthy, as shown in Figure 6 and 7 below:

Figure 6: Comparing theme colors in the logos of International Peace Institute (left) and United Nations Foundation (right)

International Peace Institute website - homepage

United Nations Foundation website - homepage

Figure 7: Comparing theme colors in the homepages of International Peace Institute (top) and United Nations Foundation(bottom)


The gray used in IPI’s website as a background color and through their logo represents formality and sophistication, implying to the prospective donor that they’re traditional and formal.

UNF’s use of white as a background color represents professionalism, implying to the public that they’re professional.

While both IPI and UNF’s website organization are good, UNF’s website is more appealing and user-friendly than that of IPI, making UNF win over IPI on this criteria.

      

     Verdict 

In a nutshell, through research and criteria evaluation, it has been determined that the International Peace Institute is a better choice to donate to than the United Nations Foundation.

While both are tax-exempt and under the United Nations, the International Peace Institute has better efficiency ratios and readily available annual reports than United Nations Foundation.

Although UNF has a better website design and organization than IPI, UNF does not have annual reports on its website, eliciting doubts that it is not being accountable of its money, actions, and programs. Since a public charity is for the public, its operations must also be made public because the public has the right to know what they are spending money on.

If you’re interested in donating to a charity that helps refugees and aids in maintaining peace worldwide, International Peace Institute is your charity!