Charities aren’t always what they seem to be, which is why Charity Navigator was set up in 2001. It’s very easy to set up a good-looking website, a few false sob-stories and get gullible people to give up thousands or millions of dollars. Some charities may be legitimate, but do not seem to accomplish their goals as effectively as similar types of charities. Some charities suspiciously loose or cannot keep track of their donations.
Charity Navigator only looks at American charities. The Safer Giving Campaign is the UK charity online watchdog and Choice is for Australians. Charity Navigator is also a charity, but it keeps its pleas for donations in very discreet buttons. Although there are other American charity websites like GuideStar, Charity Navigator has the best reputation and is the easiest of the sites to get around.
Charity Navigator uses a four star rating system. Getting four stars is the highest honor. If the charity you are looking for doesn’t even have one star, that’s a big clue that something is wrong. Star ratings don’t tell the whole story. You have to delve a little deeper for that in a ratings report. But if you are in a hurry, then the star system can greatly help you narrow down your decision about which non-profit should get your money.
After looking at the star rating, the next easiest aspect is the expenses breakdown pie chart. Next to it is a quick explanation of the visuals. It quickly shows you how money went where. Let’s use PETA (People for the Ethical Treatment of Animals) as an example. It’s a three-star charity. The pie chart shows that employees only took 4.2% of donator’s money, 12.3% went to fundraising while 83% went to the programs to help animal rights. So, this roughly breaks down into 83 cents goes to help animals while the rest goes to keep PETA running.
Charities are run like businesses, so it may surprise some people that all successful charities have paid staff or retired billionaires – otherwise, the charity would soon collapse. Any charity that has 75 cents for every dollar going to the actual work is a very good percentage.
Top Ten Lists
Taking a cue from David Letterman, Charity Navigator also uses Top Ten Lists in order to reveal what others are saying about individual charities, how much the CEOs or treasurers are paid or what charities are having financial problems. The data compiled is from economic information from that charity and the IRS form 990 for the last three years. One of the most eye-opening lists is Top Ten Charities Routinely in the Red. Fortunately, they are all charities no one’s ever heard of.
Harvard Buisness Review: Blogs: Don Polatta. “Charity Navigator Fixes Its Compass.” Dec. 8, 2009. http://blogs.hbr.org/pallotta/2009/12/charity-navigator-fixes-its-compass.html
ABC News. “Charity Donation: How to Give it Away Without Losing it All.” Leezel Tanglao. http://abcnews.go.com/GMA/MellodyHobson/charity-donation-mellody-hobsons-tips-give-losing/story?id=12029216
Charity Navigator. “Current Rating: People for the Ethical Treatment of Animals.” http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=4314