Disable all preview features
There was a problem enabling Giving Basket donations for this page. If you're looking to donate you can try refreshing the page.
If the problem perisists you can contact us or email: helpandsupport@charitynavigator.org.
You can include the Cart ID: Not assigned

Finance & Accountability

Discover the stability, efficiency, and sustainability of nonprofits

 
 
Finance & Accountability Header Image

Finance & Accountability beacon

Gain insight into nonprofit efficiency and transparency

To help donors find sustainable and accountable nonprofits, we've launched the Finance & Accountability beacon. This beacon provides an analysis of a nonprofit's financial health and governance practices.

Background

Charity Navigator has been rating the financial health and governance practices of nonprofits for decades via its long-relied upon Star Rating System. In July 2020, we launched the Encompass Rating System to make our ratings more inclusive of nonprofits of all sizes and to provide a more comprehensive assessment of a nonprofit's total impact. Finance & Accountability was the first beacon rolled out as part of Encompass.

Learn more about the methodology >>

Leveraging Finance & Accountability Scores to Inform Giving

Screenshot of Encompass rating

The Finance & Accountability beacon equips the millions of donors that utilize Charity Navigator ratings annually with information on how nonprofits are stewarding the donations they receive and how the organization operates.

Nonprofits will earn a Finance & Accountability score based on financial performance and ratios, and what policies and practices these organizations have in place to protect constituents.

Note: Organizations assessed through our Star Rating System cannot earn Finance & Accountability beacons, as Finance and Accountability & Transparency are evaluated through a separate methodology as part of the Star Rating System.

Nonprofits Operating Efficiently and Transparently

More than 180,000 nonprofits have Finance & Accountability beacons, including these organizations:

How We Assess Finance & Accountability

Every month, we recieve a file of IRS Forms 990 (the IRS tax form that tax-exempt organizations must file annually). We leverage this data to generate ratings for organizations with at least three years of electronically filed IRS Forms 990. The methodology used for evaluating these nonprofits is informed by our decades of experience rating organizations through our Star Rating System.

As we acquire newly published e-filed full 990s, we will update nonprofits' Finance & Accountability scores continually and also issue scores for newly eligible nonprofits that have fulfilled the requirement of three years of e-filed 990s (990 EZ and 990N are not sufficient). Nonprofits need not request a Finance & Accountability score; it will be issued automatically.

 

  1. Program Expense (25 or 13 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. 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.
  2. Independent Audit or Financial Review (20 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. 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 $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). 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 as a percentage of total assets. 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. 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 10 points.
  6. Documents board meeting minutes (3 points)
    The organization must confirm on its 990 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 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 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 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)
nonprofit promotion

Looking for a nonprofit rated on Finance & Accountability?

Explore Charity Navigator and find nonprofits that are fiancially healthy and accountable.

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.