Charity Navigator Research Articles

Charity Navigator launches new platform for donor portfolios

Charity Navigator, a leading nonprofit evaluator, has introduced a new platform designed to help simplify charitable giving and increase donor impact on the causes they care about. The platform, dubbed Causeway, will be managed by Charity Navigator's analysts, who select what the organization deems to be the most effective and efficient charities for inclusion in an individual donor's portfolio. Similar to investing in mutual funds, the group said, donors can create a giving portfolio of specific cause funds, with added assurance that their contributions will go to effective, vetted nonprofit organizations making documented progress in their areas of operation.

Does Accountability Matter in Performance?: Cases from Charity Navigator

As the charitable sector continues to grow, so do concerns over its accountability. Calls for greater accountability for nonprofits have led to not only an increase in government oversight activities, but also the proliferation of accountability standards within non-profit communities as the sector has been determined to address the issue through self-regulation efforts. Given the pervasiveness of the standards movement, the purpose of this study is to evaluate whether and to what extent accountability reforms matter in improving organizational performance. Various theories (e.g., scientific management and organizational learning theories; resource dependence theory and institutional iso-morphism) are explored to understand the nature of the accountability-performance relationship. Analysis of Charity Navigator data (N=943) indicates that accountability measures are positively associated with financial performance (more efficient in using resources, for example). Reviewing CEOs’ compensation packages is one of the indi-vidual accountability features that is particularly impactful in improving performance. Additionally, our findings shed light on the expansive scope of the standards move-ment, highlighting the importance of further investigating the connection between ac-countability and organizational performance beyond finance.

What's Your Charity Navigator Rating?

What's Your Charity Navigator Rating?

Direct relief: a tradition of public service efficiency in global humanitarianism

Theoretical basis The case and discussion questions posed will allow the instructors the opportunity to introduce critical strategic concepts from strategic, nonprofit management and social enterprise literature. Specifically, (1) strategic transformation: countering drift and anticipating future trends and crises; (2) types of leadership: transactional versus transformational; (3) hybridity and mission drift; and (4) nonprofit funding models, the starvation cycle and the overhead myth. Research methodology Both primary and secondary sources have been used to prepare the case. The first two authors had the opportunity to interview Thomas Tighe, Direct Relief’s (DR) President and CEO in July of 2019. The interview lasted one hour and was transcribed by one of the authors and reviewed by the other two authors for accuracy. In addition, the authors conducted nonparticipant observations in DR’s headquarters in Santa Barbara (California). Given the longevity and media exposure of the organization, extensive internal and external archival data was also available for the analysis. Case overview/synopsis This real and undisguised case is based on DR, a +70-year-old humanitarian $1.2bn nonprofit organization headquartered in California (USA). From its headquarters in Santa Barbara, DR responds to emergencies and delivers medical support for vulnerable people affected by poverty, natural disasters and civil unrest in all 50 US states, six US territories including Puerto Rico and US Virgin Islands, and in more than 90 countries. The case presents Thomas Tighe, DR’s President and CEO, reflecting in late 2018 on the transformation and growth that the organization had experienced since he started his tenure in 2000. Specifically, he is considering the most effective way to allocate an unrestricted recent cash donation. Should DR spend that money on traditional fundraising, reducing its efficiency rate, or should DR take a long-term approach and use the funds to build long-term capabilities? In addition, the case outlines the history and evolution of DR over its more than 70 years of existence, the CEO’s background and motivations, as well as a detailed description of the organization’s revenue portfolio. Students will have an opportunity to learn about a unique nonprofit named among “the world’s most non-for-profit organizations” by Fast Company; DR was also included in the Charity Navigator’s list of the “10 Best Charities Everyone’s Heard of.” In addition, in January 2009, DR was designated as a Verified-Accredited Distributor by The National Association of Boards of Pharmacy, which placed it as the first nonprofit to receive this designation to deliver prescription medicines to all 50 US states. Throughout Tighe’s tenure, DR had been lauded for its fundraising efficiency. The unique distinction to DR’s efficiency is its tradition of adopting new technologies and modern business practices for humanitarian purposes. Students will learn how DR, under the leadership of Thomas Tighe, reinvented and reinforced the organization’s traditions to retain high levels of efficiency in the face of an ever-larger organizational scale, public scrutiny and demand for humanitarian support across the world. Students will witness many strategic and operational tenets that they may be more familiar with from the for-profit world. The case also will help students to understand the concept of hybrid organizations and different nonprofit funding models. Complexity academic level The case has been written to be used in graduate Nonprofit Leadership Management and Social Entrepreneurship courses. Given the scope and implications, the case could also be used on an upper-level strategy course. To maximize students’ learning, the case should be introduced halfway into the course after students have a solid understanding of what nonprofits are and how they operate. If students are not familiar with some of the concepts introduced in the analysis, the proposed readings will prepare them for a more fruitful discussion.

Examining the Efficacy of Accountability Systems in Preventing Nonprofit Misconduct: A Look Beyond Financial Fraud

The purpose of our study is to broaden the investigation of nonprofit misconduct beyond financial fraud perpetrated by individual actors and to identify structural features that are more or less likely to be associated with actual misconduct. We utilize the Charity Navigator Advisory System and related press releases to identify 215 nonprofit organizations with confirmed or alleged misconduct. We also collect the IRS Form 990 information for 133 out of the 215 organizations with known misconduct and 150 organizations without known misconduct to compare their accountability structures. Our findings suggest that, while financial fraud committed by individual perpetrators against their organizations is the most frequently identified type of misconduct, a substantial number of other types of misbehaviors also commonly occur. Our comparison analysis indicates that organizations with known misconduct deviate significantly from scandal-free charities in several structural aspects.

Keep an eye out for common mistakes that hinder certification by ratings agency

Donors and grantmakers increasingly looks to ratings agencies such as Charity Navigator and the Better Business Bureau's Wise Giving Alliance to determine how trustworthy a particular nonprofit is. This makes it all the more important for boards to ensure their organizations' operations and finances are up to snuff.

BBB Wise Giving Alliance details charity standards that nonprofits miss the most

With the donor public looking to ratings agencies such as Charity Navigator and the Better Business Bureau's Wise Giving Alliance to determine how trustworthy a particular nonprofit is, it's increasingly important for charities to make sure their operations and finances are up to snuff. However, many don't meet all of the requirements or standards used to evaluate them.

Charity Navigator revises nonprofit ratings methodology

Nonprofit ratings organization Charity Navigator has announced a couple of major changes to its rating methodology to take into account the disruption wrought by the COVID‐19 pandemic and ensure nonprofits aren't unfairly critiqued because of it.

Philanthropy in Plastic Surgery: Best Practices and Measuring Impact.

Philanthropy in plastic surgery supports research, clinical care, academic infrastructure, and education in the United States and internationally. Plastic surgeons have opportunities to innovatively address unmet needs in their local and global communities by forming philanthropic nonprofit organizations. The authors queried three national philanthropic databases (Charity Navigator, Guidestar, and ProPublica) for Internal Revenue Service 990 form tax return information related to philanthropic plastic surgery organizations. The authors analyzed the financial information publicly available about current plastic surgery philanthropic organizations and their funding sources. Seventy-three federally tax-exempt groups identified plastic surgery as their primary area of work to the Internal Revenue Service in 2019, and 52 of those organizations said they engaged in clinical and/or educational philanthropy.3 In 2017, a total of $158.5 million was donated to these groups in cash and noncash donations including equipment and time. Analyses of 6 years (2013 to 2018) of tax records from groups that provide plastic surgery clinical, research, or educational philanthropy reveal that government grants provide very little funding for this work. Eighty-six percent of money raised for these groups in 2017 was collected by means of direct donations. Money obtained from fundraising events contributed 2 percent to their total monies raised in 2017 on average and 8 percent came from noncash gifts. A broad body of academic research is reviewed here that guides best practices and measuring a group's impact and outcomes. The details of a philanthropic group's organization and finances directly influence the impact of their work and, as such, are worthy of our sustained attention.

Measuring the Efficiency of Charitable Giving with Content Analysis and Crowdsourcing

In the U.S., individuals give more than 200 billion dollars to over 50 thousand charities each year, yet how people make these choices is not well understood. In this study, we use data from CharityNavigator.org and web browsing data from Bing toolbar to understand charitable giving choices. Our main goal is to use data on charities' overhead expenses to better understand efficiency in the charity marketplace. A preliminary analysis indicates that the average donor is "wasting" more than 15% of their contribution by opting for poorly run organizations as opposed to higher rated charities in the same Charity Navigator categorical group. However, charities within these groups may not represent good substitutes for each other. We use text analysis to identify substitutes for charities based on their stated missions and validate these substitutes with crowd-sourced labels. Using these similarity scores, we simulate market outcomes using web browsing and revenue data. With more realistic similarity requirements, the estimated loss drops by 75%—much of what looked like inefficient giving can be explained by crowd-validated similarity requirements that are not fulfilled by most charities within the same category. A choice experiment helps us further investigate the extent to which a recommendation system could impact the market. The results indicate that money could be redirected away from the long-tail of inefficient organizations. If widely adopted, the savings would be in the billions of dollars, highlighting the role the web could have in shaping this important market.

Charity Navigator launches new system for rating nonprofit efficiency, effectiveness

Charity Navigator, one of the world's most popular charity evaluator services, has launched a new non profit rating system, dubbed Encompass, that draws on a new set of indicators to evaluate and ultimately vet the efficiency and effectiveness of charities. According to the organization, the Encompass Rating System will allow Charity Navigator to rate organizations more easily, which will dramatically increase the number of nonprofits it can rate, from 9,000 to 160,000 or so by the time the system is completely rolled out.

New rating site aims to assess on‐the‐ground ‘impact’ of donations

As the donor public turns ever more concerned about getting as much “bang for the buck” as possible with their charitable contributions, a multitude of resources have cropped up to help them make decisions about which nonprofits to support. Sites such as GuideStar (now Candid) and Charity Navigator aim to inform donors by providing evaluations of charities' activities, as well as the state of their finances and business operations.

The Shock of Evaluation: Examining the Impact of Efficiency Metrics on Nonprofits’ Reporting and Revenues

Despite the constant battle over financial ratios, the existing literature has failed to converge on how these overhead expenditures actually impact nonprofit revenues and behavior. With improved analysis, this paper addresses the issues through two models that more accurately account for the mechanism of third-party ratings in the overhead debate. Using data from Charity Navigator and the IRS Form 990, a series of fixed effects models assess how third-party ratings impact how nonprofit organizations report their administrative costs and how both ratings and overhead ratios impact private contributions and grants. Most notably, the results show that after the expansion of Charity Navigator in 2011, firms report overhead ratios approximately 9.2 percent lower when they become eligible to be rated. Regarding revenues, within firm changes to overhead ratios have no impact on either rated or non-rated firms. While, for rated firms, controlling for overhead ratios, third party ratings have a positive effect on public support revenues.

Evaluating the Evaluators: What Do Nonprofit Evaluation Platforms Actually Bring to the Giving Space

The number of charities continues to grow in the United States. In 2015, there were approximately 1.56 million nonprofits registered with the IRS, an 10.4% increase from 2005. More nonprofits means the competition for a donor’s dollar is on the rise. Donors have more power in the success of nonprofits than ever before. But, that can be a lot of pressure, especially for smaller donors. But, what if I told you there are resources out there that spelled out which organizations you should give to? Which nonprofits are the most financially efficient, effective, and even considered the “Top Charities?” Well, websites like this do exist! But, from my research, it became apparent that a small percentage of donors actually use these sites. for more context, the websites that I am referring to are Charity Navigator, Charity Watch, Top Nonprofits, GiveWell, GuideStar, and Forbes’ America’s Top Charities. When a donor searches “Best Nonprofits,” “Most Effective Nonprofits,” and other similar buzzword phrases, they are directed to at least one of these websites. These websites are what I like to call nonprofit evaluation platforms. They are a platform to inform donors if a nonprofit is “worthy” of their donation. They evaluate nonprofits in the attempt to make effective giving easier and more accessible to all. Some provide a number score or a letter grade to thousands of nonprofits, while others rank what they think are the Top 10 or 100 organizations. While these websites are making nonprofit information more digestible, I was curious to see how these platforms make their evaluation decisions, and if their methodologies are actually spotlighting the best and most effective nonprofits to donate to. In this paper, I will be discussing what nonprofit evaluation platforms bring to the table in the giving space. I will begin by providing the history on the increased interest in charity evaluation and background on the five nonprofit evaluation platforms that will be discussed—Charity Navigator, Charity Watch, Top Nonprofits, GiveWell, and Forbes’ America’s Top Charities. (While I will be providing some history on GuideStar, I have excluded them from the ranking comparisons because they are mainly utilized to find Form 990s, not to make their judgement of the organization.) After comparing each platform’s evaluation methods and rankings, I will take a look at how both donors and nonprofits interact with these sites. After analyzing this research, I will conclude if nonprofit evaluation platforms service the purpose they intend to. If not, what purpose do they serve in the giving space?

Charity Navigator open to crypto donations

Nonprofit Business AdvisorVolume 2018, Issue 349 p. 1-1 Articles Charity Navigator open to crypto donations First published: 19 September 2018 https://doi.org/10.1002/nba.30500Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat No abstract is available for this article. Volume2018, Issue349October 2018Pages 1-1 RelatedInformation

News Briefs

Corporate Philanthropy ReportVolume 33, Issue 10 p. 2-3 News Briefs News Briefs First published: 19 September 2018 https://doi.org/10.1002/cprt.30228Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract L.L. Bean expands partnership with National Park Foundation. Blue Cross Blue Shield of Arizona launches new opioid addiction initiative. Merck Foundation awards $3 million for Alzheimer's care. Facebook commits $4.5 million for authoritative news. PepsiCo Foundation commits $10 million for recycling initiative. Independence Blue Cross Foundation awards nearly $1.8 million for community health programs. U.S. foundation giving to international causes hits all-time high. Charity Navigator to accept donations in cryptocurrencies. Volume33, Issue10October 2018Pages 2-3 RelatedInformation

The Relationship Between Sarbanes–Oxley Policies and Donor Advisories in Nonprofit Organizations

This study examines the impact of Sarbanes–Oxley (SOX) on the nonprofit sector. Focusing on three key SOX policies applicable to charities—conflict-of-interest policies, records retention policies, and whistleblower policies—this study tests the relationship between the existence and addition of these policies on subsequent ethical and governance lapses as reflected in the issuance of “donor advisories” by the large third-party ratings agency Charity Navigator. The findings suggest that, controlling for other relevant organizational factors, the three SOX-inspired written policies are related to a reduced likelihood of donor advisories in the organizations rated by Charity Navigator.

GuideStar, Charity Navigator to combine data on charity impact metrics

For the first time, Charity Navigator and GuideStar will combine their resources and knowledge of nonprofit organizations to compile a more comprehensive database of impact‐related information and metrics, making it easier for the public to see what a charity has accomplished alongside its formal Charity Navigator ratings.

Advancing the Dietetics Profession through the Foundation’s Philanthropy

Statement of Potential Conflict of Interest: The author has no potential conflict of interest to disclose. This article is reprinted from the June 2013 issue of the Journal of the Academy of Nutrition and Dietetics (2013;113(6):834-855).Editor’s Note: This is the fourth article in a series on the Academy’s history from 1990-present. Other articles appear in the November 2012 and February 2013 issues of the Journal.Without charities, the United States would not be able to operate, says Charity Navigator, the most widely used, independent evaluator of US philanthropic organizations. 1 Charity NavigatorOverview. http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=628 Google Scholar Can the same be said of professional member associations? That is, would dietetics be able to operate without the Academy of Nutrition and Dietetics ∗ Until January 2012, the Academy was known was the American Dietetic Association; throughout this document, it will be called the Academy. ∗Until January 2012, the Academy was known was the American Dietetic Association; throughout this document, it will be called the Academy. Foundation? Although a philanthropic organization that supports an allied health profession may not be essential to the delivery of practice, it certainly is vital in furthering an association’s goals and making an impact on the country—on the world—through endowed initiatives that fulfill some of the most pressing issues of the time. The Academy’s Foundation has certainly exemplified this in the past several decades. Statement of Potential Conflict of Interest: The author has no potential conflict of interest to disclose.

San Diego tops list of most charitable cities

Nonprofit Business AdvisorVolume 2017, Issue 335 p. 7-8 Nonprofit Research San Diego tops list of most charitable cities First published: 21 July 2017 https://doi.org/10.1002/nba.30348Citations: 1Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract The latest research from Charity Navigator shows that San Diego's philanthropic community leads the nation, ousting last year's top performer, Houston, to take the top spot. In its study, Charity Navigator compared the median performance and size of the largest nonprofits in the 30 largest metropolitan markets. Those markets account for 62 percent of the 8,219 charities evaluated by Charity Navigator, the group said. Citing Literature Volume2017, Issue335August 2017Pages 7-8 RelatedInformation