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4-Star Rating Promoted in Wall Street Journal Prompts Donor to Fine-Tune Charitable Contributions

March 1, 2012


Marcia W., a lifelong donor who resides in Sarasota, FL, said she “got serious” about responsible giving in the late 1990s, when she retired from a long career as a senior-level banking executive. After years of donating to causes supported by her various blue-chip employers, she now had the opportunity to direct her charitable funds entirely to organizations doing work that mattered to her personally.

“I’d been making charitable donations all my life, but not always responsibly,” she said.  With limited cash funds to donate, she realized that “getting selective” about her giving choices was crucial. “I started writing down the categories of causes that interest me and why.” 

Over the next few years, Marcia honed her list of favorite charities down to approximately 10, focusing on organizations that aid the military and disabled veterans, champion education reform and support disease research. Among them was the Arlington, VA-based Institute for Justice (IJ), which litigates for economic liberty, school choice, private property rights and freedom of speech as well as other civil liberties. She learned about IJ in a Wall Street Journal piece, in which the organization’s spokesperson “touted its 4-star rating from Charity Navigator (CN).”

The article prompted Marcia to visit the CN web site, www.charitynavigator.org, to find out more about IJ’s rating and the methodology behind it.  Once she became a registered CN user (a quick and easy process) she was able to access valuable historical and comparative data for IJ as well as for her other favorite charities. Armed with information, she fine-tuned her choices and cash giving even further. 

“I had been interested in the Institute for Justice for awhile, so I was impressed by its long history of 4 stars,” Marcia said. “At that point, I decided that I would not give willy-nilly to organizations that didn’t have a 4-star rating.”

In re-tooling her charity portfolio, Marcia added the Aaron Diamond AIDS Research Center in New York ( which had consecutive 4-star ratings from 2005 up until September 2012 when it dipped slightly to 3-stars) and removed a less-efficient charity with a similar mission.  She doubled her contribution to the Special Operations Warrior Foundation in Tampa, FL, which has been awarded 4 stars every year since 2006, and omitted a lower-rated, veteran-focused organization.

Looking to the future, Marcia and her husband are focusing primarily on 4-star-rated charities in their charitable estate planning. The couple has allocated a large percentage of their IRA to IJ.  She considers the 4-star CN rating a mechanism for further research. “I don’t automatically give to an organization just because it’s earned 4 stars. I also use CN’s comparison charts to see how it’s performing compared with similar charities,” she explained.

Marcia has used the information she’s gleaned from CN’s rating methodology to open a dialogue with charities that have lost her support or to which she has curtailed her contributions as a result of her giving strategy. In each case, she wrote letters explaining why the charity’s rating – as well as CN’s new Accountability and Transparency metrics -- prompted her choices. 

The CEO of one of those organizations responded with a “thoughtful” letter that addressed Marcia’s concerns. She reinstated her funding for awhile longer, but eventually dropped her support due to what she considered to be an exorbitant executive salary. As for the other charities Marcia contacted, “I was dismayed to see that many could have cared less, [but] that tells me a lot as well,” she said. 

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