Charity Navigator Encompass Rating System™

1. Program Expense (25 or 13 points)
   The Program Expense Ratio is determined by the amount an organization spends on program expenses (page 10, line 25b) as a percentage of its total expenses. We calculate the average program percentage over the three most recent fiscal years. A charity with a reported percentage of 70% or higher will receive the 25 points for this metric. Charities with a percentage between 60%-69.9% will receive 13 points. Charities with a percentage below 60% will receive zero points, with percentages below 50% also triggering an automatic zero points for the charity's Liabilities to Assets score.
2. Independent Audit or Financial Review (20 points)
   Organizations with a total revenue above $1 million are expected to have completed an independent audit (page 12, line 2b). Charities with a revenue between $500K and $1 million are expected to have completed a formal audit, review, or compilation (page 12, line 2b or 2c). Charities that have completed the expected financial documentation will receive the 20 points for this metric. This metric is not applicable to organizations with less than $500K in revenue*.
3. Board Composition (25 points)
   An organization must have at least three board members (page 1, line 3). In addition, more than 50 percent of those members must be identified on the Form 990 as independent (page 1, line 4). A charity with an independent board that meets this criteria will receive the 25 points.
4. Liabilities to Assets (15 or 8 points)
   The Liabilities to Assets percentage is determined by total liabilities (page 11, line 26b) as a percentage of total assets (page 11, line 16b). We calculate this percentage per the most recent fiscal year end. A charity with a reported percentage of less than 50% will receive the 15 points for this metric. Charities with a percentage between 50% and 59.9% will receive 8 points.
5. Website listed (3 points)
   The organization must have a website listed on its 990 (page 1, line j). 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. A charity that lists their website address on page one of the 990 will receive the 3 points.
6. Documents board meeting minutes (3 points)
   The organization must confirm on its 990 (page 6, line 8a) that they adhere to this process. An official record of the board meeting events that took place ensures that a contemporaneous document exists for future reference. Charities that have this process in place will receive 3 points.
7. Whistleblower policy (3 points)
   The organization must confirm on its 990 (page 6, line 13) that they have a whistleblower policy. This policy outlines procedures for handling employee complaints, as well as a confidential way for employees to report mismanagement. Charities that have this policy in place will receive 3 points.
8. Conflict of interest policy (3 points)
   The organization must confirm on its 990 (page 6, line 12a) that they have a conflict of interest policy in place. This policy protects the organization and by extension those it serves, when it is considering entering into a transaction that may benefit the private interest of an officer, director and/or key employee of the organization. Charities that have this policy in place will receive 3 points.
9. Records retention and destruction policy (3 points)
   The organization must confirm on its 990 (page 6, line 14) that they have a records retention and destruction policy in place for handling, backing up, archiving and destructing documents. Charities that have this policy in place will receive 3 points.

*For the charities with less than $500K in revenue who are not subject to the Independent Audit, Review, Compilation metric; the scoring will be adjusted for these metrics as follows:

• Board Composition (35 points)
• Website Listed (5 points)
• Documents board meeting minutes (5 points)
• Whistleblower policy (5 points)
• Conflict of interest policy (5 points)
• Records retention and destruction policy (5 Points)

1. A nonprofit receives a total of 0 out of 100 points if, after a thorough search of its public materials, we were unable to find sufficient information to estimate the impact of a substantial portion of its programs.
2. A nonprofit receives a total of 50 out of 100 points if it has published sufficient information for us to estimate the impact of a substantial portion of its programs, but we found it was not cost-effective. We determine cost-effectiveness by comparing our estimate of the nonprofit's impact to a benchmark for performance.
3. A nonprofit receives a total of 75 out of 100 points (a passing score) if it is cost-effective by our estimates.
4. A nonprofit receives a total of 100 out of 100 points if it is highly cost-effective by our estimates.

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

Charity Navigator awards every nonprofit that is eligible for an Encompass Rating that completes the survey full credit for this Beacon, in recognition of their willingness to publicly share this information with the nonprofit and philanthropic communities. Although the data is not evaluated for quality at this time, future iterations of this beacon will include third party or other data that will serve to validate the information provided by the nonprofit.

Nonprofit organizations that submit complete answers in the Charity Navigator Nonprofit Portal are eligible to receive a Leadership & Adaptability score.

• Strategy (40%) - The nonprofit organization presents evidence of strategic thinking and goal setting.
  • Mission 
  • Vision
  • Strategic Goals
• Leadership (30%) - The nonprofit organization provides evidence of leadership investment through focusing externally in mobilizing resources for the mission and internally through investing in leadership development.
  • Leadership Development
  • Mobilize Resources for Mission
• Adaptability (30%) - The nonprofit organization has an opportunity to tell the story of how the organization adapted to tremendous external changes in the last year.