Disable all preview features

Impact & Results

Learn how Charity Navigator is rating the impact of nonprofits for the first time

 
 
Impact & Results Header Image

To make smart decisions, donors need to know the impact of the nonprofits they are asked to support

To help donors identify high-impact charities, we've launched the Impact & Results beacon. This beacon provides an assessment that takes explicit account of how much good the nonprofit achieves per dollar of cost.

Background

In July 2020, we launched the Encompass Rating System so that our ratings are more inclusive of nonprofits of all sizes and provide a more comprehensive assessment of nonprofit effectiveness. Impact & Results is the second beacon rolled out as part of Encompass.

The initial version of the Impact & Results beacon was made possible by the acquisition of ratings startup ImpactMatters. You can learn more about ImpactMatters and the acquisition in this press release.

Navigating Impact on Charity Navigator

Screenshot of Encompass rating

Hundreds of service-delivery nonprofits on Charity Navigator now feature Impact & Results scores. Through our Encompass Rating System, you can identify these organizations by the numeric scores under fully-colored Impact & Results beacons. In response to user feedback showing impact as the most important factor in donating, Impact & Results accounts for 60% of the score for Encompass rated charities.

In addition to nonprofits rated through Encompass, hundreds of nonprofits assessed through our Star Rating System also have Impact & Results scores on rating pages. This score does not currently affect the overall Star rating.

High-Impact Nonprofits

Here are just a few organizations identified as being highly impactful on Charity Navigator:

Sightsavers

$50 cures one person of blindness.

View rating

Evidence Action

$0.50 provides clean water to a person for a year.
View rating

Feeding America

$2 provides a meal to a person in need.

View rating

How We Assess Nonprofit Impact

To assign impact ratings, we use publicly available information to estimate the actual impact the nonprofit's program has on people's lives. We then compare those impact estimates to benchmarks to determine if the nonprofit is cost-effective.

Rating is a complex and inherently imperfect exercise and we urge you to read on for details of how and why we issue these ratings.

In our beta phase, nonprofits that satisfy the criteria below are eligible to receive an Impact & Results score:

  1. "Direct" criterion: At least two-thirds of the nonprofit's activities (as measured by percent of total program service expenses) are directly delivered to beneficiaries and reasonable to expect impact measurement for. Many nonprofits work one or more steps removed from beneficiaries, such as by conducting research, advocating for policy change or making grants to other organizations. We do not yet have a method for consistently estimating the impact of these nonprofits, and so have excluded them from the Impact & Results beacon at this time.
  2. "Service" criterion: The nonprofit provides a service charitably - that is, at low or no cost to beneficiaries who are distinct from its donors. Specifically, the nonprofit's beneficiaries do not pay a majority of its costs (e.g., through tickets, membership dues, medical bills or donations) - or, if they do, paying beneficiaries constitute a minority of total beneficiaries. The "service" criterion excludes many arts and culture institutions, religious organizations and fee-seeking health care providers in the U.S.
  3. "Relevance to donors" criterion: The nonprofit receives private charitable contributions - of any amount - from individuals, corporations or foundations.

If a nonprofit is eligible, but has not yet received an Impact & Results score, this may be because we are still in the process of developing a methodology for analyzing its specific type of program. If you are an eligible nonprofit, you can share data to potentially receive an Impact & Results score.

Note also that, as with the Star Rating System, we generally issue Encompass ratings to individual incorporated entities (each filing their own Form 990) as opposed to networks of affiliated entities. Learn more about our eligibility criteria on impactmatters.org.

Impact & Results scores are based on ImpactMatters' impact analysis methodology. Read the full methodology.

To issue Impact & Results scores, we use publicly available information to estimate the actual impact a nonprofit's program has on people's lives. We define impact as the change in mission-driven outcomes net of what would have happened in the absence of the program (the "counterfactual"), relative to the cost to achieve that change. We then compare the estimated impact of the nonprofit's program to a benchmark to determine if it is cost-effective - in other words, the benefits produced by the nonprofit's program outweighs its costs. A cost-effective program is making good use of resources to improve the lives of the people it serves.

For the Beta V2 release of the Encompass Rating System, a nonprofit's score on the Impact & Results beacon is determined as follows:

  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.

Nonprofits can also receive no score on the Impact & Results beacon, but a score on the Finance & Accountability beacon. In that case, the nonprofit's Encompass score is based only on the Finance & Accountability beacon; it is not penalized for not having a score on the Impact & Results beacon.

Why Cost-effectiveness?

Take a simple thought exercise: A program has a limited budget of $100,000 to improve literacy in a community. It can choose between two approaches to do so: one that can boost literacy by a grade level for 100 students and a second that can also boost literacy by a grade level but for 200 students. All else equal, a sensible program administrator would choose the second, as of course it reaches twice as many students. This is a cost-effectiveness decision. We have limited resources and unlimited needs. Cost-effectiveness is a decision tool that makes those resources go further - helping more people in more ways.

Continued Iteration on Assessing Nonprofit Impact

With the launch of the Encompass Rating System, we have exponentially increased the number of nonprofits rated by Charity Navigator. It is now our goal to increase the number of nonprofits with Impact & Results scores. Nonprofits interested in receiving an Impact & Results score can sign up here.

For the initial release of the Impact & Results beacon, we have leveraged the pre-existing ImpactMatters methodology. Currently, this methodology is not appropriate for some types of services that nonprofits provide, including advocacy. In future versions, our team will look at alternative methodologies to evaluate program results and impact of a wider array of the nonprofit sector.

nonprofit promotion

Looking for a nonprofit rated on Impact & Results?

Explore Charity Navigator and find high-impact nonprofits to support.

Search now

Join Our Mailing List

Join over 400,000 other informed givers and get updates on charity ratings, new features, hot topics, and tips for donating.