Hey, the folks at Charity Navigator have always been really good at helping people figure out the financial soundness of nonprofits.
Now, they’re measuring the accountability and transparency of nonprofits. This is a really big deal, it helps everyone figure out if the nonprofit is serious, in the sense that they use your money well.
Remember that some nonprofits spend way too much on salaries and fundraising, sometimes that’s all they do.
They jus launched a new, two-dimensional rating system that measures each charity’s Financial Health and Accountability & Transparency.
Here’s what they say:
As a result of the new scoring system:
- Half of the nearly 5,500 charities rated by Charity Navigator received new star ratings
- 30% of the charities’ star rating improved
- 19% of the charities’ star ratings decreased
- With the bar set higher, the total number of 4-star charities decreased by 20%.
- At the same time, charities with ratings of 3 stars (good) or better increased by 8%.
The new rating system (CN 2.0) is the result of two years of conceptual work, followed by over a year of data gathering and months of analysis. Charity Navigator’s goal in establishing the system was to both be fair to the charities it rates while also creating a tool that was the most effective at helping donors identify charities that are more or less risky philanthropic investments. To balance these goals, Charity Navigator vetted its new methodology through charities, donors and its Advisory Panel of industry experts, which includes Craig Newmark the Founder of Craigslist.