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How Do We Calculate the Overall Score and Star Rating?

 
 

A one dimensional rating system, like the one Charity Navigator launched in 2002 to rate the Financial Health of charities, can be done with a simple addition of scores. But rating charities on two distinct components –  (1) Financial Health + (2) Accountability and Transparency –  in such a way that charities must excel in both areas in order to score well overall, requires a more complex calculation. In our two dimensional rating system the overall score is not a sum, but rather a measurement of the distance of two component scores from a perfect score of 100 and 100. The smaller the distance to the perfect score, the better the overall score. Mathematically, the formula we use to calculate the overall score is:

Although the calculation used to determine the overall score is complex, the rating table used for Financial Health, Accountability & Transparency and the Overall Rating is the same as illustrated below.

Overall Rating: 4 Stars 3 Stars 2 Stars 1 Star 0 Stars Donor Advisory
Overall Score: ≥ 90 80 - 90 70 - 80 55 - 70 < 55 N/A
Overall Rating: Overall Score:
4 Stars ≥ 90
3 Stars 80 - 90
2 Stars 70 - 80
1 Star 55 - 70
0 Stars < 55
Donor Advisory N/A

 

Visualizing the Math

To help understand the calculation for determining a charity’s overall score, we provide a visual tool on each charity’s rating page. The following graph is an example of what is shown on the ratings pages. In this example, the charity has a score of 88 in Financial Health (3-stars) and 77 in Accountability and Transparency (2-stars). Following the 88 score on the vertical scale and the 77 on the horizontal scale to where they meet, it is easy to see that the charity earns a 3-star overall rating.

You can also plug the charity’s two individual component scores – (1) Financial Health and (2) Accountability and Transparency – into the boxes below. This tool will perform the complex distance formula calculation for you so that you can easily obtain the charity’s overall score.

1 - Financial Health Score 2 - A&T Score Overall Score
1 - Financial Health Score
2 - A&T Score
Overall Score

 

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