Read the evidence before you read the rating.

For advisors and family offices

A charity due diligence checklist for client decisions

Build a dated research file that separates entity identity, financial stewardship, governance, impact evidence, current developments and funding need. Keep sources and unresolved questions with the decision.

Read the advisor checklist and example research-file outline

Guide 01

What Form 990 can tell you, and what it cannot

Form 990 is one of the most useful starting points in U.S. charity research. It can show reported revenue, expenses, assets, compensation, grants, governance disclosures, related organizations, certain transactions, and other details about the legal entity that filed the return.

What it usually cannot tell you by itself is whether the principal program worked. A tax return is an accounting and disclosure document. It is not an impact evaluation. Program service expense can describe where money was classified without establishing whether the activity changed the outcome a donor cares about.

That distinction matters because a charity can have orderly financial reporting and still have weak evidence of effectiveness. The reverse can also happen: a program may have strong outcome evidence while the organization still raises questions about capital use, governance, or current funding need.

Guide 02

Why the program expense ratio is not an impact score

The program expense ratio compares reported program service expenses with total expenses. It can be useful context, especially when it changes sharply over time or conflicts with how an organization describes its operating model.

But a high ratio does not prove that the program was effective. It can tell you that spending was categorized as program service expense. It does not tell you whether the activity produced a direct outcome, whether the outcome was measured well, whether an independent evaluator confirmed it, or whether the same result would have happened without the program.

That is why No Halo separates financial stewardship from impact evidence. A donor should not have to choose between caring about how money is managed and caring about whether the work works. They are different questions.

Guide 03

When large charity reserves are a strength, and when they raise a question

Large reserves are not automatically good or bad. They can protect an organization through revenue shocks, support long-term commitments, finance expansion, smooth seasonal cash needs, or give management room to operate without crisis fundraising.

The donor question is different: what does another unrestricted dollar accomplish now? A financially strong organization may still have a compelling use for additional capital. It may also have enough flexible resources that the incremental value of another gift is difficult to establish from the public record.

The right analysis therefore looks at liquidity, restrictions, commitments, debt, capital projects, expansion plans, current capacity, and the distinction between total net assets and funds that are actually available for general use.

Guide 04

Why two charity numbers can disagree without either being false

Different public sources can report different numbers for what sounds like the same thing. Before calling that a discrepancy, a researcher has to check what each number actually measures.

Common reasons include different reporting periods, consolidated versus single-entity financial statements, cash versus accrual treatment, different definitions of a program category, donated goods or services, fiscal-year timing, gross versus net presentation, and one source including related entities that another excludes.

A real reconciliation identifies the period, entity scope, accounting basis, and definition behind each figure. If the difference can be explained, it should not be presented as a concern. If the available evidence cannot reconcile it, the uncertainty should remain visible.

Guide 05

How to read an impact claim without getting fooled by activity counts

Charities often publish counts that are easy to understand: meals served, people reached, grants awarded, animals placed, students enrolled, or families supported. Those numbers can describe scale. They do not necessarily describe effectiveness.

Stronger impact evidence asks whether meaningful outcomes changed, whether the evaluation was independent, whether the design can separate the program effect from other explanations, and whether the evidence still applies to the program as it operates today.

A randomized or strong quasi-experimental evaluation can be powerful evidence, but even a rigorous historical study needs a current-applicability check. Programs evolve, scale, change staff, change eligibility rules, and operate in new places. Evidence quality and current relevance are separate questions.