Charity Navigator marks twentieth anniversary by welcoming an unprecedented 150k nonprofits to new rating system; ushers in new technology-forward approach to expand its ratings and make effective giving easier for donors and nonprofits
July 29, 2020 - SADDLE BROOK, N.J. – Charity Navigator, the world’s largest and most-utilized independent charity evaluator, today announced its new nonprofit rating system – Encompass. The rollout comes as the organization prepares to celebrate two decades in operation. The Encompass Rating System is a comprehensive evaluation tool that analyzes nonprofit performance based on four key indicators. Today marks the release of the first indicator: Finance & Accountability. The new rating system allows Charity Navigator to rate organizations at scale and has increased the total number of rated nonprofits from 9,000 to 160,000 at launch.
The rollout is especially timely given the surge in donations to organizations addressing the coronavirus pandemic and issues of social justice. Since March, Charity Navigator has seen a 200% increase in donations to nonprofits through its Giving Basket when compared to the same time period last year, amounting to more than $7M in total donations.
Since 2001, Charity Navigator has rated the efficiency and effectiveness of thousands of nonprofits based on measures of finance, accountability and transparency through the Star Rating System. With more than 8.5 million users annually, many individual and institutional donors rely on Charity Navigator to help inform their giving decisions–yet only a small fraction of the 1.6 million nonprofits operating across the U.S. have received a star rating. While eligibility requirements for a star rating disqualify less established and smaller nonprofits, the Encompass Rating System uses a newly implemented technology stack to automatically analyze the tax forms of 501(c)(3) organizations, allowing the tool to expand the amount of nonprofits rated. Encompass is based on a numerical score out of 100 and will live alongside the current Star Rating System. Star rated charities will not be affected by the rollout.
“The Encompass Rating System will connect millions of donors with thousands more outstanding nonprofits and provide a more fulsome and holistic view of nonprofit effectiveness,” said Michael Thatcher, CEO of Charity Navigator. “The future of giving is data. By engaging a more technology-forward approach, we welcome an unparalleled amount of nonprofits to the rating system at this launch, including many small and recently established nonprofits that are doing extraordinary work. We are proud to provide them with the credibility and assurance to donors that a rating from Charity Navigator brings.”
In addition to the Finance & Accountability indicator, which assesses an organization’s fiscal responsibility, the new rating system will include three additional indicators to be rolled out over the next 18-24 months:
“As a result of the COVID-19 pandemic, demand for our services are at an all-time high”, said Adam Lowy, Founder of Move for Hunger, which has distributed more than a million meals since the onset of the pandemic in March and today received an Encompass rating of 100/100. “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.”
The launch of the Encompass Rating System is made possible by generous donors and funders, including the Bill & Melinda Gates Foundation, the John D. and Catherine T. MacArthur Foundation, and the Fidelity Charitable Trustees’ Initiative, a grantmaking program of Fidelity Charitable separate from its donor-advised fund program.
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