February 1, 2014
Charity Navigator launched in 2002, with an evaluation system that graded charities on a 0 to 4-star rating. By 2010, we were seeing enough serious charges against and questionable reporting by charities and their leadership that we decided it was time to add another designation – the Donor Advisory – as a way to help inform and protect donors.
As you may know, charities can receive a Donor Advisory for a variety of reasons such an investigation by the Attorney General, a lawsuit against the charity and an atypical item of a significant nature reported on the Form 990. Donor Advisories replace a charity's rating and typically remain in place for a minimum of a year. In order for a charity's rating to be restored, it must provide public domain documentation or similarly reliable and accessible information that demonstrates that the issues identified in the Donor Advisory have been resolved. Once the Donor Advisory has been lifted, a record of it will remain in the charity’s ‘Historical’ section of its profile page so that donors have an opportunity to learn about issues the charity previously faced and, if available, how it resolved those issues. Since launching this designation, roughly 175 charities have received Donor Advisories and currently more than 130 charities have active Donor Advisories.
More recently, the staff at Charity Navigator has determined that there is a need for another level of donor alert. This new designation is called the CN Watchlist. A charity will appear on the Watchlist when we become aware of conduct that may affect a donor's decision to support that charity. Unlike the Donor Advisories, the Watchlist charities' ratings remain in place alongside the alert. Charities will typically remain on the Watchlist for six months and just like the Donor Advisory, we want to see evidence that the issues identified in the Watchlist have been resolved in order to remove the Watchlist entry. Once a charity is no longer on the Watchlist, a record of the alert will remain in the 'Historical' section of its profile for a year so that donors can be informed about the issue. As of February 2014, there is just one charity on the CN Watchlist, but we expect that number to grow as we begin to fully implement this new designation.