Tag Archives: charity navigator

Evaluate Before You Donate

Don’t know what to look for before you donate to a nonprofit? Don’t worry — you are not alone.

With online donation sites like JustGive.org and Network for Good it is now easier and more convenient to donate than ever before. But how do can donors know if their organization will be efficient and effective in spending donor money?

Sites like Charity Navigator and Guidestar have supplied donors with the legitimate forms and facts about nonprofits, but not a whole lot of explanation. The answer is out there, but that takes time and energy.

In a recent article, Si Cantwell from Star News Online outlines the best way to evaluate a nonprofit before you donate. She walks readers through form 990s (a document administered by the IRS for all 501 c(3) tax-exempt organizations), audited financials, un-audited statements of income and expenses, and other standard information.

To find out how you can determine where, and to what programs, your charitable donation will go toward visit Star News online.

What Is Up With Online Giving In Canada?

Posted by Katya Andresen on May 12, 2010

Many of the same trends we have here!

A great summary from our friends at Canada Helps (sort of the Network for Good of Canada – we consider them our brothers/sisters across the border):

Philanthropy: Rethinking How to Give

By Amy Feldman in BusinessWeek

When disaster strikes, as it has in Haiti, Americans dig into their pockets and give. While such generosity is unquestionably a good thing in a terrible time, few individuals do much research on the groups they’ve chosen to receive their money. The uncomfortable truth in philanthropy is that it’s not easy to know whether the group you’re giving to is particularly effective at what it does. With Americans giving more than $200 billion a year, that’s a lot of ambiguity.

A growing movement to review and rate charities on their real world results could give individuals a far better idea of where their donations can do the most good. Moreover, it could guide nonprofits to focus on the programs that have the most impact and to jettison those that aren’t working as well.

Charity Navigator, the largest nonprofit rater, is overhauling its rating system to look beyond financial measures and gauge effectiveness. Other online evaluative efforts includeb GiveWellPhilanthropedia, and GreatNonprofits. Their approaches vary, from crowdsourcing to research reports. In addition, GuideStar, which serves as a clearinghouse of information on nonprofits, has begun including some of these rating reports on its site. Two other initiatives, fromRoot Cause and Partners for Change Initiative, are working to get more and better rating information to financial advisers so they can help clients make giving decisions.

Continue reading at BusinessWeek.com

A Glorious New Chapter In Nonprofit Evaluation

By Heidi Genrich

My entire holiday season was made on December 1st, 2009 when Charity Navigator, GiveWell, Great Nonprofits, Guidestar and Philanthropedia issued a joint press release condemning  the use of overhead ratios and executive salaries to evaluate nonprofits.

Judging a nonprofit’s quality by how much they spend on laser printers vs. African wells, arbitrarily creating universal budget guidelines for all types of organizations, always seemed a little silly. Even if the overhead-ratio-executive-salary method of comparing nonprofits worked in specific circumstances, it made no attempt to measure the actual impact of their programs.

Tim Ogden put the problem best in his post on Philanthropy Action:

In short, picking a charity based on the lowest overhead ratio is like buying the cheapest car that money can buy. You might spend less in the short run but it’s inevitably going to let you down.

Ken Berger, the CEO and President of Charity Navigator, may have sent the biggest waves through the nonprofit community with his statement that “too many donors are paying too much attention to measures like overhead.” Charity Navigator became the web’s nonprofit gold standard precisely because it encouraged donors to judge and compare nonprofits based on their overhead ratios. This is a turning point that is long overdue.

As a longtime critic of overhead ratio evaluations, Dan Pallota’s post on the press release may be the most interesting. The next step is to figure out an accessible standard by which the average donor can evaluate the >1 million nonprofit organizations in the US.