We rate charities by evaluating two areas of performance: 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. We provide these ratings so that donors can make intelligent giving decisions, and so that the philanthropic community can more effectively monitor itself.
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.
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.