Where We Are Headed (2013 and Beyond)
Charity Navigator is America’s largest and most influential charity rater. We had over 6.2 million visits to our web site in 2012 alone and impact approximately $10 billion of charitable donations each year. This makes Charity Navigator far and away the largest and most utilized charity rating service that exists anywhere.
Over the past few years Charity Navigator has been working to expand our rating system (which originally only considered Financial Health) with the ultimate goal of including what we believe are the three dimensions of a charity’s operations that a charitable givers/social investor needs to consider before donating to them:
- Financial Health
- Accountability & Transparency and
- Results Reporting
In 2011, we expanded our rating analysis to include dimension 2 (CN 2.0) - Accountability and Transparency. In January of 2013, we launched Charity Navigator’s newest rating dimension – what we call Results Reporting – which begins to address the final dimension of information we believe donors must consider to make a wise giving/social investment decision – the charity’s results reporting. By results we especially are interested in the outcomes of the work of the charity and whether these results are providing a social value (in other words, offering meaningful change in communities and peoples’ lives). Mission related results are the very reason that charities exist. Therefore, it is the most important dimension of all for our rating system and yet the hardest to measure due to the tremendous variation in the work that charities do as well as the lack of standardized public reporting on results by most charities. However, after years of research and with the advice of many experts, we believe we have taken a major step forward by adding this new dimension to our rating system.
CN 3.0 will include a dimension focused on the quality of reporting of results that charities provide to the public. We believe this will highlight those charities that are high performing and results oriented, as well as encouraging other charities to become so. The Results Reporting dimension considers 5 elements that you can learn about by going to the methodology section of our web site and by looking at the first three charities (Roca,Dave Thomas Foundation for Adoption and the Alliance for Children's Rights) that have the data for the new methodology displayed. In addition, you can follow our President & CEO's blog, Ken’s Commentary, where he will be exploring each element in greater depth over the coming months and read the detailed Concept Note.
We plan to implement the new Results Reporting dimension as follows:
- For the next several years, our professional analysts will be researching the applicability of this tool to each of the 34 charity “cause areas” that we evaluate, making appropriate modifications as needed, and applying the criteria to the 10,000 charities we plan to rate as of 2016.
- To give donors immediate access to our research during this process, we will post our findings on each charity’s page month by month, as the new data is gathered.
- However, this new analysis will not impact any charity’s star rating until we have gathered the data for all 10,000. Given the complexity and variety of charities we are evaluating, we will need this time to continue our research on each of the 34 cause areas to determine how all 5 rating elements apply and what modifications are needed for some cause areas. We also need this time to compile an ample amount of data to determine the appropriate weighting of this information in our rating system.
Although we are hopeful we can achieve the full implementation of CN 3.0 within four years, in reality the resources available to us will determine how quickly CN can fully implement CN 3.0. Charity Navigator is itself a charity and we do not charge a fee for our services to users, nor do we charge the charities to be rated or to use our analysis in their fundraising and marketing endeavors. Instead, CN relies on the voluntary donations of our Board members and our users, as well as advertising revenue, data sales and grants.
Paul Brest (Professor of Law, Emeritus and Former Dean of Stanford Law School and former president of the William and Flora Hewlett Foundation) recently reviewed the Results Reporting methodology and concluded that, “This is the most important work being done in the nonprofit sector”. We believe it is that important because donors will have access to much more robust information than ever before about each charity’s ability to bring about long lasting and meaningful change in the world. It is also important because many more charities will become focused on measuring and managing their performance. In other words, we believe this work and the new rating system that is evolving out of it is critically important because our users will be able to direct even more money to high performing charities. Ultimately we believe this will lead to a significant and measurable improvement in human welfare and acceleration in solutions to our world’s most persistent problems.