What Kind of Charities Do We Evaluate?
Charity Navigator is a national service. We seek to help as many givers as possible, regardless of where they live or what kind of charity they wish to support. We celebrate and evaluate charities of all types, in all regions of the country, and whose work impacts all corners of the globe.
Because we aim to help givers and to celebrate charities nationwide, we use five simple guidelines for choosing which charities to evaluate. Before evaluating a charity, we consider its:
Tax Status: We only evaluate organizations granted tax-exempt status under section 501(c) (3) of the Internal Revenue Code and file a Form 990. 501(c) (3) organizations are considered public charities and all donations to them are tax-exempt.
- We do not evaluate 501(c) (4) organizations. In general, 501(c) (4) organizations are allowed to spend a substantial portion of their revenue on lobbying our government and not every donation to them is tax-deductible.
- We do not evaluate charities that are exempt from filing the Form 990. Many religious organizations, like the Salvation Army, are exempt under Internal Revenue Code from filing the Form 990. As a result, we lack sufficient data to evaluate their financial health.
- We do not evaluate private foundations. Private foundations, like the Bill & Melinda Gates Foundation, receive the majority of their money from only one individual, family or corporation. This differs from the public charities that Charity Navigator evaluates. Public charities have a broad-base of support from the general public as well as variety of other funding sources. The IRS requires that private foundations file a Form 990-PF which differs from the document public charities file. This makes it impossible for us to compare the financial performance of private foundations to public charities.
Sources of Revenue: We require public support to be more than $500,000 in the most recent fiscal year.
Because our goal is to help individual givers, we evaluate only those charities that depend on support from individual givers.Length of Operations: We require 4 years of Forms 990 to complete an evaluation.
Location: We only evaluate charities based in the U.S. and registered with the IRS. However, the scope of a charity's work can be international.
Type of Programs: At this time we are not adding any hospitals, hospital foundations, universities, colleges, community foundations, or PBS stations. Further, we no longer evaluate land trusts and preserves.
As we expand our database of charities, we make sure that we evaluate as many charities as possible, representing all regions of the country and providing all types of programs. We welcome charity suggestions from our users, provided they meet the above criteria. In addition, we use the following guidelines each time we select new charities to evaluate.
We begin by reviewing the IRS Statistics of Income (SOI) File, which we have narrowed down to a list of those organizations that receive the most combined money in contributions from individuals, corportations, foundations and government. The SOI File is compiled annually based on information provided by 501(c)(3) public charities in their informational tax returns, or IRS Forms 990.
Second, we narrow our master list in two ways. We eliminate charities that receive almost all of their funding from government grants, or from the fees they charge for their programs and services. Additionally, we exclude charities that report $0 in fundraising expenses, as we are interested only in charities that actively solicit donations from the general public.
Third, in an effort to ensure diversity among the charities we evaluate, we divide our master list into a set of smaller lists defined by types of charities: Health, International, Human Services, and so forth. In each list, we then select the charities receiving the largest amount of total support from individuals, corporations, foundations, and government. If a particular region of the country is underrepresented in one of those lists, we add to that particular list a reasonable number of the largest available charities from the underrepresented region. We then combine these separate lists into a new master list of charities.
Fourth, we obtain each charity's five most recently filed Forms 990 directly from the IRS. With five years, we are better able to factor out statistical anomalies in their data. After reviewing the Forms 990, we exclude those additional charities that do not meet our guidelines, specified above. We evaluate all of those charities that remain.
