Mission: The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and local levels.

The organization's founders envisioned a world where the tax code doesn't stand in the way of success. Tax reform isn't just about growing the economy or raising revenue; it's about making people better off. That's why we're so passionate about our mission to lead the tax reform debate toward the principles of sound tax policy: simplicity, neutrality, transparency, and stability.

Our research and outreach highlight our tax code's strengths and weaknesses, and show how tax policy impacts taxpayers, the government, and the economy at large. We use our research to foster competition and advise policymakers on how to improve their tax systems.

Tax Foundation is a 501(c)(3) organization, with an IRS ruling year of 1990, and donations are tax-deductible.

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Contact Information

  http://www.taxfoundation.org

 1325 G Street N.W.
Suite 950
Washington DC 20005 

  202-464-6200


You are viewing this organization's new Charity Navigator profile page. To view the legacy version, click here.

Star Rating System by Charity Navigator


Charity Navigator evaluates a nonprofit organization’s financial health including measures of stability, efficiency and sustainability. We also track accountability and transparency policies to ensure the good governance and integrity of the organization.




Good

This charity's score is 83.98, earning it a 3-Star rating. Donors can "Give with Confidence" to this charity. 

This score is calculated from two sub-scores:

This score represents Form 990 data from 2019, the latest year published by the IRS.

View this organization’s historical ratings.


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Star Rated Report

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Program Expense

Program Expense Ratio

67.7%


The Program Expense Ratio is determined by Program Expenses divided by Total Expense (average of most recent three 990s).


This measure reflects the percent of its total expenses a charity spends on the programs and services it exists to deliver. Dividing a charity's average program expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.


Source: IRS Form 990

Administrative Expenses

10.4%


As reported by charities on their IRS Form 990, this measure reflects what percent of its total budget a charity spends on overhead, administrative staff and associated costs, and organizational meetings. Dividing a charity's average administrative expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.


Source: IRS Form 990

Fundraising Expenses

21.7%


This measure reflects what a charity spends to raise money. Fundraising expenses can include campaign printing, publicity, mailing, and staffing and costs incurred in soliciting donations, memberships, and grants. Dividing a charity's average fundraising expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.


Source: IRS Form 990

Liabilities to Assets Ratio

26.7%


The Liabilities to Assets Ratio is determined by Total Liabilities divided by Total Assets (most recent 990).


Part of our goal in rating the financial performance of charities is to help donors assess the financial capacity and sustainability of a charity. As do organizations in other sectors, charities must be mindful of their management of total liabilites in relation to their total assets. This ratio is an indicator of an organization’s solvency and or long term sustainability. Dividing a charity's total liabilities by its total assets yields this percentage.


Source: IRS Form 990

Fundraising Efficiency

$0.21


The amount spent to raise $1 in charitable contributions. To calculate a charity's fundraising efficiency, we divide its average fundraising expenses by the average total contributions it receives. We calculate the charity's average expenses and average contributions over its three most recent fiscal years.


Source: IRS Form 990

Working Capital Ratio

0.56 years


Determines how long a charity could sustain its level of spending using its net available assets, or working capital, as reported on its most recently filed Form 990. We include in a charity's working capital unrestricted and temporarily restricted net assets, and exclude permanently restricted net assets. Dividing these net available assets in the most recent year by a charity's average total expenses, yields the working capital ratio. We calculate the charity's average total expenses over its three most recent fiscal years.


Source: IRS Form 990

Program Expense Growth

11.81%


We compute the average annual growth of program expenses using the following formula: [(Yn/Y0)(1/n)]-1, where Y0 is a charity's program expenses in the first year of the interval analyzed, Yn is the charity's program expenses in the most recent year, and n is the interval of years passed between Y0 and Yn.


Source: IRS Form 990

Governance


Charity Navigator looks to confirm on the Form 990 that the organization has these governance practices in place.


Sources Include: IRS Form 990

Governance:
Independent Voting Board Members  ... (More)
No Material Diversion of Assets ... (More)

A diversion of assets – any unauthorized conversion or use of the organization's assets other than for the organization's authorized purposes, including but not limited to embezzlement or theft – can seriously call into question a charity's financial integrity. We check the charity's last two Forms 990 to see if the charity has reported any diversion of assets. If the charity does report a diversion, then we check to see if it complied with the Form 990 instructions by describing what happened and its corrective action. This metric will be assigned to one of the following categories:

  • Full Credit: There has been no diversion of assets within the last two years.

  • Partial Credit: There has been a diversion of assets within the last two years and the charity has used Schedule O on the Form 990 to explain: the nature of the diversion, the amount of money or property involved and the corrective action taken to address the matter. In this situation, we deduct 7 points from the charity's Accountability and Transparency score.
  • No Credit: There has been a diversion of assets within the last two years and the charity's explanation on Schedule O is either non-existent or not sufficient. In this case, we deduct 15 points from the charity's Accountability and Transparency score.
(Less)
Audited Financials Prepared by Independent Accountant ... (More)

Audited financial statements provide important information about financial accountability and accuracy. They should be prepared by an independent accountant with oversight from an audit committee. (It is not necessary that the audit committee be a separate committee. Often at smaller charities, it falls within the responsibilities of the finance committee or the executive committee.) The committee provides an important oversight layer between the management of the organization, which is responsible for the financial information reported, and the independent accountant, who reviews the financials and issues an opinion based on its findings. We check the charity's Form 990 reporting to see if it meets this criteria.

  • Full Credit: The charity's audited financials were prepared by an independent accountant with an audit oversight committee.

  • Partial Credit: The charity's audited financials were prepared by an independent accountant, but it did not have an audit oversight committee. In this case, we deduct 7 points from the charity's Accountability and Transparency score.
  • No Credit: The charity did not have its audited financials prepared by an independent accountant. In this case, we deduct 15 points from the charity's Accountability and Transparency score.
(Less)
Does Not Provide Loan(s) to or Receive Loan(s) From Related Parties ... (More)
Documents Board Meeting Minutes ... (More)
Distributes 990 to Board Before Filing ... (More)
Compensates Board ... (More)

Policies


Charity Navigator looks to confirm on the Form 990, or for some metrics on the charity's website, that the organization has these policies in place.


Sources Include: IRS Form 990 and organization's website

Policies:
Conflict of Interest  ... (More)
Whistleblower ... (More)
Records Retention and Destruction ... (More)
CEO Compensation Process ... (More)
Donor Privacy ... (More)

Donors have expressed extreme concern about the use of their personal information by charities and the desire to have this information kept confidential. The exchanging and sale of lists for telemarketing and the mass distribution of "junk mail," among other things, can be minimized if the charity assures the privacy of its donors. Privacy policies are assigned to one of the following categories:

  • Yes: This charity has a written donor privacy policy published on its website, which states unambiguously that (1) it will not share or sell a donor's personal information with anyone else, nor send donor mailings on behalf of other organizations or (2) it will only share or sell personal information once the donor has given the charity specific permission to do so.

  • Opt-out: The charity has a written privacy policy published on its website which enables donors to tell the charity to remove their names and contact information from lists the charity shares or sells. How a donor can have themselves removed from a list differs from one charity to the next, but any and all opt-out policies require donors to take specific action to protect their privacy.
  • No: This charity either does not have a written donor privacy policy in place to protect their contributors' personal information, or the existing policy does not meet our criteria.

The privacy policy must be specific to donor information. A general website policy which references "visitor" or "user" personal information will not suffice. A policy that refers to donor information collected on the website is also not sufficient as the policy must be comprehensive and applicable to both online and offline donors. The existence of a privacy policy of any type does not prohibit the charity itself from contacting the donor for informational, educational, or solicitation purposes.

(Less)

Partial

Transparency


Charity Navigator looks to confirm on the Form 990, or for some metrics on the charity's website, that the organization makes this information easily accessible.


Sources Include: IRS Form 990 and organization's website

Transparency:
CEO Salary Listed on 990 ... (More)
Board of Directors Listed on Website ... (More)
Key Staff Listed on Website ... (More)
Audited Financial Statements on Website ... (More)
Form 990 Available on Website ... (More)

Additional Information

Unscored

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Total Revenue and Expenses

Total Revenue and Expenses

This chart displays the trend of revenue and expenses over the past several years for this organization, as reported on their IRS Form 990.

Salary of Key Persons

Presented here are up to five of this organization's highest compensated employees. This compensation data includes salary, cash bonuses, and expense accounts and is displayed exactly how it is reported to the IRS. The amounts do not include nontaxable benefits, deferred compensation, or other amounts not reported on Form W-2. In some cases, these amounts may include compensation from related organizations. Read the IRS policies for compensation reporting



JOSEPH HENCHMAN, EXECUTIVE VICE PRESIDENT

$345,389


SCOTT HODGE PRESIDENT, AND BOARD SECRETARY

$297,085


MICHAEL VOGLER VICE PRESIDENT, OF CORPORATE GIVING

$161,820


NICOLE KAEDING, DIR. OF FEDERAL PROJECTS

$142,508


MICHAEL LUCCI VICE PRESIDENT, OF STATE PROJECTS

$118,769


Source: IRS Form 990 (page 7), filing year 2019

Business Master File Data

Below are some key data points from the Exempt Organization IRS Business Master File (BMF) for this organization. Learn more about the BMF on the IRS website


Activities:

Study and research (non-scientific) (BMF activity code: 124)


Foundation Status:

Organization which receives a substantial part of its support from a governmental unit or the general public   170(b)(1)(A)(vi) (BMF foundation code: 15)


Affiliation:

Independent - the organization is an independent organization or an independent auxiliary (i.e., not affiliated with a National, Regional, or Geographic grouping of organizations). (BMF affiliation code: 3)

Data Sources: IRS Forms 990

The Form 990 is a document that nonprofit organizations file with the IRS annually. We leverage finance and accountability data from it to form Encompass ratings. Click here to view this organization's Forms 990 on the IRS website (if any are available).

Pandemic Response

Due to the unprecedented nature of the pandemic, we give charities such as this one the opportunity to share the story of COVID's impact on them. Charities may submit their own pandemic responses through their nonprofit portal.


Tax Foundation reported being impacted by COVID-19 in the following ways:
  • Program Delivery

  • Fundraising Capacity

  • Revenue

  • Administrative Capacity


How COVID-19 impacted the organization's operations financially:

Tax Foundation recognized the need for nonpartisan, trustworthy analysis of COVID-19 tax developments in early March 2020. The U.S. federal, state, and local governments, as well as countries around the world, sought to support their economies with legislation. With the support of our donors, Tax Foundation developed the COVID-19 Resource Center to provide real-time data for policymakers, journalists, and taxpayers. Tax Foundation had a 10 percent increase in total revenue and support in 2020, the boost from grants, and contributions—people understood the urgency for our policy experts to explain how legislative proposals would affect the economy and their pocketbooks. The annual Tax Foundation fundraising event was held online in November; while profitable, the 2020 net revenue was 77 percent less than 2019’s in-person event. Tax Foundation's Development Department reduced its budget by 6 percent, directing additional funds to programing (5 percent) and marketing (1 percent).


How COVID-19 impacted the organization's delivery of programs:

Tax Foundation’s COVID-19 Resource Center launched March 18, 2020 with more than 150 pieces of analysis and continued to publish real-time data related to the CARES Act, Paycheck Protection Program (PPP), and state and local government aid. Tax Foundation was the first to sound the alarm on unemployment compensation systems. Our analysis of state revenue impacts was crucial for lawmakers on Capitol Hill resisting unnecessary trillion-dollar giveaways to state and local governments. Tax Foundation’s research on conformity to federal tax changes, like the treatment of forgiven PPP loans or more generous Net Operating Loss provisions, has helped shape the policy response in state capitals. Despite the added workload of keeping up with the pandemic proposals, Tax Foundation still met the original 2020 productivity goals with the quality, detail, and accuracy Tax Foundation is known for.


How this organization adapted to changing conditions caused by COVID-19:

During Tax Foundation’s Executive Team meeting on Monday, March 8, 2020, the possibility of the entire staff working remotely was discussed and a work-from-home trial happened Thursday, March 12—the very next day, a National Emergency was declared. Our staff began full-time remote work immediately and seamlessly. From their kitchen tables and spare bedrooms, Tax Foundation’s team earned the reputation among its donors as the “first responders on the economic front lines” of the COVID-19 crisis. Tax Foundation has always built its processes around being able to respond rapidly to the questions of the day. For the last 84 years, when a member of Congress proposes something, Tax Foundation has rushed to model the data and release analysis. Tax Foundation was prepared for the deluge of COVID-19 economic relief proposals and adapted well.


Innovations the organization intends to continue permanently after the pandemic:

Some Tax Foundation staff felt more productive at home than in the office, so remote work will be an option even after the office reopens completely. Meeting and collaboration scheduling has been restructured for designated days of the week when employees are expected to be in the office. As employees settled into remote work, home office needs became obvious, so the open invitation to request monitors, chairs, desks, Wi-Fi boosters, and such was integrated into the culture. Employees are not afraid to ask for what they need, and Tax Foundation is happy to fill the requests. Until COVID-19, Tax Foundation hired staff to work in its Washington, D.C. office, but in the wake of the pandemic, it was determined that prerequisite might not be necessary for all positions. Tax Foundation’s full-time Development Writer, a military spouse with no plans to relocate to the nation’s capital, has seamlessly integrated into the staff with the full support of the technology department.


Historical Ratings

Date PublishedForm 990 FYEOverall ScoreOverall Rating
Rating Version: 2.1
6/1/20212019 83.98
12/20/20192018 82.13
12/20/20192017 84.52
5/1/20182016 84.96
2/1/20182016 83.52

This organization received multiple star ratings within this fiscal year, due to an update to it's Accountability and Transparency data and/or the receipt of an amended Form 990.

12/1/20162015 87.15
6/1/20162014 86.59
Rating Version: 2.0
11/1/20152014 90.68
3/1/20152013 88.60
12/22/20142013 88.15
10/1/20132012 80.91
10/1/20132011 74.82
9/20/20112010 71.63
Rating Version: 1.0
11/1/20102009 67.54

...   Impact & Results


This score estimates the actual impact a nonprofit has on the lives of those it serves, and determines whether it is making good use of donor resources to achieve that impact.


Impact & Results Score

Not Currently Scored

Tax Foundation cannot currently be evaluated by our Encompass Rating Impact & Results methodology because either (A) it is eligible, but we have not yet received data; (B) we have not yet developed an algorithm to estimate its programmatic impact; (C) its programs are not direct services; or (D) it is not heavily reliant on contributions from individual donors.

Note: The absence of a score does not indicate a positive or negative assessment, it only indicates that we have not yet evaluated the organization.

Learn more about Impact & Results.


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Additional Information

Unscored

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Largest Programs

Largest Programs



Tax Foundation reported its three largest programs on its FY 2019 Form 990 as:


$1,531,342

Spent in most recent FY

38%

Percent of program expenses


FEDERAL TAX POLICY PROGRAMS PROMOTES SOUND TAX POLICY IN WASHINGTON D.C. THE FOUNDATION PROVIDES OBJECTIVE DATA AND ANALYSIS ON TAX POLICY, USING SEVERAL TOOLS, INCLUDING DYNAMIC SCORING MODEL, RESEAR ... (More)


$1,069,027

Spent in most recent FY

26%

Percent of program expenses


STATE TAX POLICY PROGRAMS PROMOTES STATE TAX REFORM WITH COMPREHENSIVE ANNUAL REPORTS, RESEARCH, POLICY ANALYSIS, AND IN-DEPTH STATE-SPECIFIC STUDIES. IN 2019, THE FOUNDATION TESTIFIED OR PRESENTED TO ... (More)


$648,327

Spent in most recent FY

16%

Percent of program expenses


RESEARCH AND COMMUNICATION -THE FOUNDATION'S MARKETING TEAM MAKES TAX POLICY ENGAGING AND ACCESSIBLE TO TAXPAYERS, LEGISLATORS, AND THE MEDIA THROUGH INNOVATIVE, MULTICHANNEL CAMPAIGNS. THE FOUNDATION ... (More)


...   Leadership & Adaptability


This score provides an assessment of the organization's leadership capacity, strategic thinking and planning, and ability to innovate or respond to changes in constituent demand/need or other relevant social and economic conditions to achieve the organization's mission.


Leadership & Adaptability Score

100

out of 100

The score earned by Tax Foundation is a passing score.

Encompass Rating V4 provides an evaluation of the organization's Leadership & Adaptability through the nonprofit organization submitting a survey response directly to Charity Navigator.


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Leadership & Adaptability Report

100

of 100 points

Mission

The nonprofit organization presents evidence of strategic thinking through articulating the organization’s mission


Tax Foundation exists to improve lives through tax policies that lead to greater economic growth and opportunity. Since 1937, Tax Foundation’s principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. Tax Foundation believes the way to positively affect change in a myriad of places and issues is through tax policy that is simple, transparent, neutral, and stable.


Source: Nonprofit submitted responses

Vision

The nonprofit organization presents evidence of strategic thinking through articulating the organization’s vision.


Tax Foundation envisions a world where the tax code does not stand in the way of success. Tax reform is not just about growing the economy or raising revenue; it’s about making people better off. Tax Foundation is the trusted nonpartisan leader in the tax reform debate and advocates for better tax policy. All Tax Foundation research is guided by the principles of sound tax policy—simplicity, transparency, neutrality, and stability—which should serve as touchstones for policymakers and taxpayers everywhere.


Source: Nonprofit submitted responses

Strategic Goals

The nonprofit organization presents evidence of strategic thinking and goal setting through sharing their most important strategic goals.


Goal One: To influence the U.S. national tax debate toward economically principled policies, Tax Foundation will produce timely and high-quality data, research, and analysis on federal tax issues.

Goal Type: This goal reflects our commitment to further our advocacy work for our organization and or cause area.


Goal Two: Tax debates occurring in state capitals will be influenced by the Tax Foundation through timely and high-quality data, research, and analysis toward economically principled policies.

Goal Type: Grow, expand, scale or increase access to the existing programs and services.


Goal Three: Tax Foundation will improve taxpayers’ lives around the world with timely and high-quality data, research, and analysis on global taxation to influence debates toward economically principled policies.

Goal Type: This goal reflects our commitment to further our advocacy work for our organization and or cause area.


Source: Nonprofit submitted responses

Leadership Development

The nonprofit provides evidence of investment in leadership development


Describe an investment in leadership

Tax Foundation invested in the continued professional growth and development of its Executive Team in September 2020 with a two and a half day leadership seminar. Considering positive feedback from staff about the leadership abilities and strategies employed by the Executive Team are effective, welcome, and appreciated.

Source: Nonprofit submitted responses

Mobilizing for Mission

The nonprofit provides evidence of leadership through focusing externally and mobilizing resources for the mission.


This organization mobilizes for mission in the following ways:
  • Strategic Partnerships

  • Thought Leadership

  • Raising Awareness

  • Community Building

What are this organization’s external mobilizaton efforts?

Tax Foundation’s mission of improving lives through better tax policy is propelled by collaborating with other think tanks, forging relationships with elected officials and their staffs, and openly engaging with supporters. Tax Foundation maintains healthy relationships with journalists and media outlets to distribute its educational materials and commentary. Using social media, email, website, and direct mail campaigns, Tax Foundation reaches several million people around the globe each year. Tax Foundation does not advocate for specific legislation, but objectively speaks to the growth or harm a given proposal would have on the economy. The most powerful tool for this data presentation is Tax Foundation’s numerical ranking: by comparing like entities to each other using standard criteria and measurement, Tax Foundation’s Taxes and Growth General Equilibrium Macroeconomic Model gives a full picture of immediate and long-term policy effects.

Source: Nonprofit submitted responses

Story of Adaptability

The nonprofit has an opportunity to tell the story of how the organization adapted to tremendous external changes in the last year.


Tax Foundation’s program is its people—brilliant economic minds and the experts who support them—so ensuring staff had everything necessary to work effectively and comfortably from their lockdown location was a priority in 2020. Computer monitors, Wi-Fi signal boosters, ergonomic chairs, and other supplies were sent directly to employees’ homes. Tax Foundation has always built its processes around being able to respond to the questions of the day. Since 1937, Tax Foundation has rushed to model tax policy proposals introduced on Capitol Hill. In the same way, when a COVID-19 relief proposal was drafted, Tax Foundation ran it through its Taxes and Growth General Equilibrium Model and produced compelling, accurate, and insightful analysis. The Tax Foundation COVID-19 Resource Center was launched March 18, 2020, five days after the National Emergency declaration, and contained more than 150 pieces of analysis. The following day, Tax Foundation introduced the State-by-State and Country-by-Country COVID-19 Response Online Trackers. By March 30, the Interactive Unemployment Benefits Claims Tracker was live on Tax Foundation’s website. Despite these numerous and complicated analysis pandemic relief projects, Tax Foundation staff was also able to adapt seminars focused on cultivating a vibrant tax policy debate while educating elected officials, their staff, and donors on tax policy basics and current events. Hosting these events on Capitol Hill and traveling to legislative offices in the states was not an option during the pandemic, so Tax Foundation switched the presentation and delivery method to an online webinar. This shift not only allowed for larger attendance numbers, but also an expanded follow-up opportunity with event recordings and supplemental resources sent via email. Tax Foundation’s adaptation to 2020’s challenges led to stronger relationships within the organization and innovative collaboration on an unprecedented scale.

Source: Nonprofit submitted responses

...   Culture & Community


This score provides an assessment of the organization's engagement with the constituents it serves, a practice we term Constituent Feedback. When organizations listen to constituents, they are able to better deliver on programs and meet the needs of stakeholders. A future version of this Beacon will also assess an organization's people operations and its Diversity, Equity and Inclusion (DEI) metrics.


Culture & Community Score

100

out of 100

The score earned by Tax Foundation is a passing score.

Encompass Rating V4 provides an evaluation of an organization's Culture and Community by measuring its Constituent Feedback practices (see report below). Constituent Feedback data provides 100% of the basis for the initial evaluation of the Culture & Community Beacon.


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Culture & Community Report

100

of 100 points

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Constituent Feedback

Constituent Feedback

Full Credit


This organization reported that it is collecting feedback.


Here's how this organization is listening and learning from the people they serve:


How is your organization collecting feedback from the people you serve?

Electronic surveys (by email, tablet, etc.), Paper surveys, Case management notes, Suggestion box/email


How is your organization using feedback from the people you serve?

To identify and remedy poor client service experiences, To identify bright spots and enhance positive service experiences, To make fundamental changes to our programs and/or operations, To inform the development of new programs/projects, To identify where we are less inclusive or equitable across demographic groups, To strengthen relationships with the people we serve


With whom does your organization share the feedback you got from the people you serve?

The people we serve, Our staff, Our board, Our funders, Our community partners


What challenges does your organization face in collecting feedback from the people you serve?

It is difficult to get the people we serve to respond to requests for feedback


Briefly describe a recent change that your organization made in response to feedback from the people you serve.

Note: The organization did not respond to this question.



Methodology


Charity Navigator believes nonprofit organizations that engage in inclusive practices, such as collecting feedback from the people and communities they serve, may be more effective. We've partnered with GuideStar by Candid to survey organizations about their feedback practices. Nonprofit organizations can fill out the How We Listen section of their Candid profile to receive a rating.


Charity Navigator awards full credit for this Beacon to every nonprofit that is eligible for an Encompass Rating that completes the survey, in recognition of their willingness to publicly share this information with the nonprofit and philanthropic communities. This data is not evaluated for quality at this time. Validation will be added in future iterations of this Beacon.

Analysis and Research


Like the overall Encompass Rating System, the Culture & Community Beacon is designed to evolve as metrics are developed and ready for integration. Our partnership with Feedback Labs and Guidestar by Candid, and other partners including Fund for Shared Insight, GlobalGiving, and Keystone Accountability, enables us to launch the first version of this beacon with Constituent Feedback information collected on Candid's site.


Feedback practices have been shown to support better Diversity, Equity, and Inclusion outcomes, an essential area of assessment that we intend to further expand and develop in the future. Feedback Labs has documented several studies which indicate that beyond achieving organizational goals, nonprofits that are attentive and responsive to concerns and ideas raised by beneficiaries establish stronger relationships with the people they serve, promote greater equity, and empower constituents in ways that can help to ensure better long-term outcomes. You can find resources to help nonprofits improve their feedback practices here.

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