As tomorrow’s Giving Tuesday kicks off the all-important year-end fundraising period, Charity Navigator, the nonprofit watchdog, will display on its website information about the work that many charities are doing to determine whether their programs get results as well as other data.
That information will come from GuideStar and other organizations that collect data on charities’ programs.
The goal of the effort, which will provide new data on 2,400 charities the watchdog group evaluates, is to give donors more information during the year-end giving season about the outcomes of nonprofits’ work rather than just the data it currently provides about their finances and disclosures. Ratings from Charity Navigator, however, will still be based on its standard measures, including how much of the organizations’ money goes to overhead.
Most nonprofits will have responses and data they provided to GuideStar for its “platinum” or “gold” seal program displayed on their Charity Navigator pages.
Charities with gold seals have answered questions like “What is your organization aiming to accomplish?” and “How will your organization know if you are making progress?” Nonprofits with platinum seals have provided numerical data about the results of their work, such as how many people they serve.
Some organizations that have submitted similar responses to the crowdfunding site Classy may have those answers posted instead. And some ratings pages for international aid organizations will note whether they’ve been vetted by GlobalGiving, a website that matches donors with community-development programs. GlobalGiving reviews documents submitted by charities to determine if they are running programs as they describe and whether they have the resources to keep their operations going.
The move comes as donors increasingly say that they want information about a charity’s impact and that the lack of such detail often causes them to hold back on giving.
The move is being billed as a step toward Charity Navigator incorporating data on program results into its ratings of nonprofits — a long-term goal the organization has struggled with over the past few years.
“This is really a test to see how do our users respond to this information,” said Michael Thatcher, president of Charity Navigator.
Still, critics of Charity Navigator think the effort falls short.
Although the new information doesn’t hurt, “it’s a small step. It’s a Band-Aid,” said Doug White, a philanthropy adviser, who added that he doesn’t believe nonprofits can or should be rated or compared in the way Charity Navigator attempts to — especially if one wants to know about organizations’ program results.
He adds: “It doesn’t really address the large problem that the public has when it comes to looking at the value of a charitable organization.”
But Jacob Harold, president of GuideStar, called the move a “pretty significant step in the effort against the ‘overhead myth’ ” — referring to the popular belief that the best charities are the ones that spend the least money on administration. Providing information about program results — rather than just how much a nonprofit spends to carry out its mission — gives a fuller picture of a charity’s effectiveness that one can’t get from simply looking at finances.
Mr. Harold added that he hopes Charity Navigator eventually stops using financial data in its ratings system altogether.
Mr. Thatcher said while it’s unlikely that the organization will stop using financial information in its evaluations, its goal is to move to a system that better reflects the impact of charities’ work, rather than just spending and disclosures.
“That’s where we want to go, but it’s a longer process to figure out how to do that effectively,” Mr. Thatcher said. “Ultimately, I think the way we’re going to do it is through this collaborative effort by getting a lot of different inputs from a lot of different players.”
