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How Do We Rate Charities?

 
 
 

At Charity Navigator, we believe that there are three dimensions of a charity’s operations that an informed charitable giver/social investor needs to consider when selecting a charity to support. Today, we rate charities by evaluating two of these: Financial Health and Accountability & Transparency. Our ratings show donors how efficiently we believe a charity will use their support today, how well it has sustained its programs and services over time, and their level of commitment to being accountable and transparent. In the not-too-distant future, we plan to rate charities’ Results Reporting. We provide these ratings so that donors can make intelligent giving decisions, and so that the philanthropic community can more effectively monitor itself.

 

  • Financial Health

    • We base our evaluations on the financial information each charity provides in its informational tax return, the IRS Form 990. We use that information to analyze a charity’s financial performance in seven key areas that assess its financial efficiency and financial capacity, in relation to its cause area. We then assign the charity a score ranging from zero to ten in all seven performance metrics, as well as a rating for its overall Financial Health.

  • Accountability & Transparency

    • To evaluate an organization’s Accountability & Transparency, we utilize two sources: information available on the organization’s 990 and information collected from a review of the charity’s website. We use that information to score an organization on seventeen metrics that assess whether it follows best practices of governance and ethics, and whether it makes it easy for donors to find critical information about the organization. We then assign a rating for the organization’s overall Accountability & Transparency.

  • Results Reporting

    • American donors care about the tangible results achieved by the charities they support, and high performing charities aim to be transparent and provide this data publicly. Charity Navigator is committed to bringing this information to the donor community. Click here to learn more about how we plan to evaluate Results Reporting.

 

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