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Charity Navigator Encompass Rating System™

 
 
Charity Navigator Encompass Rating System™ Header Image

In order to better serve both donors and nonprofits, we've expanded the number of charities we rate from 9,000 to 160,000

To accomplish this goal, we built the Encompass Rating System (beta V1) A pre-release of software that includes some of the look, feel, and function of the public release; however, design changes and functionality improvements are implemented with the help of testing., providing donors with a powerful tool to access comprehensive evaluations of organizational effectiveness for more than 150,000 nonprofits (and counting!). This is exponentially more than Charity Navigator has historically rated.

Donors are afforded peace of mind when considering supporting smaller and more recently established nonprofits, and these organizations are given a platform to promote their effectiveness to current and potential donors across multiple metrics, enhancing their ability to raise the funds they need to advance their mission. Star rated charities are not affected by this new system.

Encompass ratings are scored from 0-100 based on available data. A score of 75 or above indicates that a nonprofit is effective and transparent in the areas being assessed, based on Charity Navigator's criteria. These organizations will receive the 'Give with Confidence' attribution on their Charity Navigator pages.

Providing guidance through beacons

The Encompass Rating System uses technology-supported automated methods and procedures to provide donors and nonprofits with four clearly-visualized indicators of organizational effectiveness - we refer to these as beacons.

At the launch of the Encompass Rating System, nonprofits will be rated on a score of 0-100 based on a Finances & Accountability beacon which consists of five metrics, providing some parity to the more robust financial and governance metrics that the Star Rating System evaluates. However, over the course of the next 18-24 months, the Encompass Rating System will begin to include additional measures of organizational effectiveness.

finance and accountability

Finance & Accountability

This beacon evaluates a nonprofit organization's financial health, including measures of stability, efficiency, and sustainability. We also include accountability and transparency practices to ensure integrity.

finance and accountability

Impact & Results

(Coming soon)

This beacon will evaluate available data on the results that a nonprofit organization achieves towards delivering on its stated mission.


finance and accountability

Leadership & Adaptability

(Coming soon)

This beacon will provide an assessment of the organization's leadership capacity, strategic planning, and the ability to readily innovate or respond to changes in constituent demand/ need to achieve the organization's mission.

finance and accountability

Culture & Community

(Coming soon)

This beacon will provide an assessment of the organization's people operations/HR, connectedness and engagement with the constituents and communities served, reputation, and Diversity, Equity, and Inclusion measures.

The Encompass Rating System will remain in betaA pre-release of software that includes some of the look, feel, and function of the public release; however, design changes and functionality improvements are implemented with the help of testing. until all four beacons have been launched.

Criteria and methodology

While eligibility requirements for an evaluation through the Star Rating System disqualify less established and smaller nonprofits, the Encompass Rating System uses technology-supported automation to analyze the tax forms of 501(c)(3) organizations that have e-filed the IRS Form 990 for three consecutive years. The Encompass Rating System is based on a numerical score out of 100 and will live alongside the current Star Rating System.

The initial Finance and Accountability beacon is determined by five metrics:

  1. Program Expense (25 points)
    The Program Expense Ratio is determined by the amount an organization spends on program expenses as a percentage of its total expenses. We calculate the average program percentage over the three most recent fiscal years.
  2. Independent Audit or Financial Review (25 points)
    Organizations with a total revenue above $1 million are expected to have completed an independent audit. Charities with a revenue between $250K and $1 million are expected to have completed a formal audit, review, or compilation. This metric is not applicable to organizations with less than $250K in revenue.
  3. Board Composition (25 points)
    An organization must have at least three board members. In addition, more than 50 percent of those members must be identified on the Form 990 as independent (i.e. not compensated as an officer or other employee of the organization).
  4. Liabilities to Assets (15 points)
    The Liabilities to Assets percentage is determined by total liabilities as a percentage of total assets. We calculate this percentage per the most recent fiscal year end.
  5. Website listed (10 points)
    The organization must have a website listed on its 990. This is an accountability and transparency measure; nonprofits act in the public trust and reporting publicly on activities is an important component of our rating.

Have questions?

Read our frequently asked questions (FAQs) to learn more about the Encompass Rating System, how ratings are determined, and more.

Adam Lowy Move For Hunger

As a result of the COVID-19 pandemic, demand for our services are at an all-time high. The assurance of organizational effectiveness that a rating from Charity Navigator provides will allow us to expand our support base and advance our mission to end food insecurity – we are enormously proud to have received the highest rating possible in the new Encompass Rating System.”

Adam Lowy
Executive Director/Founder
Move For Hunger
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