Understanding Charity Ratings
We’re living in a world of limitless information and opinions right at our fingertips. Many of us will not order a meal from a restaurant that is new to us without a quick look into its ratings and reviews. From vacation rentals to home appliances, even preschools and college professors, an online search can offer insights to help guide our decisions.
Conducting a bit of research about nonprofit organizations before making a charitable gift can help generous people to make savvy, informed decisions. The most recognized websites are GuideStar and Charity Navigator, with a handful of smaller sites addressing different niches. Locally, The Giving Partner is a tremendous tool that provides in-depth information to help potential donors understand an organization and its impact.
When you want to make a difference, Manatee Community Foundation’s recommendation is to first focus on the gains you hope to see in the community as a result of your gift. We can get caught up in lots of information and forget about what truly matters—will our gift help someone in the way we hope it will?
Here are some descriptions of websites that can be helpful as you seek to learn more about specific nonprofits.
How it Works: Not a rating, but a “transparency platform; takes the information from nonprofits’ complex 990 tax returns and puts it in a user-friendly format to simplify drawing your own conclusions. Also provides a “Seal of Transparency” when nonprofits voluntarily provide additional information about things like governance, programs and impact.
Benefits: A consistent, easy to read format allows you to find the information you need. Financial information is presented in charts allowing comparison over time.
Cautions: Transparency information is based on self-reported data by the nonprofit and not vetted. Requires a paid subscription for some features.
Charity Navigator (www.charitynavigator.org)
How it Works: Rates nonprofits with budgets over $1 million and in operation for 7+ years; provides information (without ratings) on others. Pulls data from 990 tax return and nonprofit website.
Benefits: At-a-glance 1-4 star rating can help you decide if you need to learn more before giving. No cost to access.
Cautions: Heavy emphasis on overhead as a proxy for effectiveness. (To learn more about why “Overhead is Overrated.”
The Giving Partner (www.thegivingpartner.org)
How It Works: Offers profiles of hundreds of nonprofits from Manatee, Sarasota, Charlotte and DeSoto counties here in southwest Florida. Clear, clean format makes it easy to find information beyond just financials.
Benefits: Provides insight into programs, accomplishments, goals, governance and finance of local organizations and is searchable by keyword to find nonprofits in our area working on causes (such as education, veterans, children) that matter to you. Free to users and nonprofits thanks to Community Foundation of Sarasota County.
Cautions: Profile is based on self-reported data by the nonprofit. Some information is vetted.
Other Sites to Check Out:
• Charity Watch – Assertive “Charity Watchdog” over approximately 700 organizations
• BBB Wise Giving Alliance – Accreditation for charities meeting all 20 of their criteria
• GreatNonprofits – Stories from volunteers, donors and clients (“Yelp” for nonprofits)
• GiveWell – Recommends charities that impact most lives per dollar (often global)
A Note About Small Nonprofits:
Creating and maintaining online profiles can be time consuming for nonprofits, and smaller, grassroots organizations do not often have staff to oversee the process. Also, those with a new or innovative approach may not meet the structured criteria of some monitoring sites.
Whether the organization you are researching is small or new—or well established and larger—consider asking them directly about the measures that are important to you. Even small nonprofits should be able to share the impact they achieve with donations and be held accountable to governance and finance best practices. Sometimes a friendly conversation helps you to learn more, or better understand their approaches and how you can help.
• IRS Site to Confirm Tax Exempt Eligibility: Tax Exempt Organization Search
• State Charity Regulator (of state where the charity is based): Listing By State
• Federal Trade Commission Article: Before Giving to Charity
• Google – Don’t forget a simple search can often reveal very helpful information
• Nonprofit’s Own Website and Social Media
Manatee Community Foundation is always here to be a resource for charitable people. Understanding nonprofits is our job, so please don’t hesitate to reach out: call 941-747-7765 or contact one of our team members. And please, always consider reaching out to speak with someone at the nonprofit organization you are researching. You will likely learn a lot through your one on one discussion.
Jennifer Abbott, the author of this post, is the Director of Philanthropy at Manatee Community Foundation.