| Charity Navigator |
Article Index for Charity |
Website Links For Charity |
Information AboutCharity Navigator |
| CATEGORIES ABOUT CHARITY NAVIGATOR | |
| charities | |
| non-profit organizations | |
| philanthropic organizations | |
| 2002 establishments | |
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ABOUT Charity Navigator was launched on April 15 , 2002 with the mission of helping "donors make informed giving decisions and enabling well-run charities to demonstrate their commitment to proper stewardship" of donor dollars. Initially, Charity Navigator provided financial ratings for 1,100 charities. Charity Navigator currently evaluates over 5,200 charities in U.S.A., in addition to hundreds of organizations with international operations. The site also features opinion pieces by Charity Navigator experts, donation tips, and top-10 and bottom-10 lists which rank efficient and inefficient organizations in a number of categories. Annually, Charity Navigator conducts a national study to determine and analyze any statistical differences that may exist in the financial practices of charities located in different metropolitan markets across America. The service is free, and the site is navigable by charity name, location or type of activity. Charity Navigator is a 501(c)(3) organization which accepts no advertising or donations from the organizations it evaluates. EVALUATION METHODOLOGY Using publicly available tax returns ( IRS Form 990 ) filed with the Internal Revenue Service, the Charity Navigator rating system bases its evaluations in two broad areas — organizational efficiency and organizational capacity. Based on how the charity rates in each of the two areas, it is assigned an overall rating, ranging from zero to four stars. To help donors avoid becoming victims of mailing-list appeals, each assessment of a charity's finances is accompanied by a review of its commitment to keeping donors' personal information confidential. However, the IRS Form 990 categorizes a charity's expenditures into three broad categories that are open to accounting manipulation. The nonprofit sector does not have the strict financial regulation and transparency required from the private sector (due to the Sarbanes-Oxley Act ), creating limitations on how accurately a charity's efficiency can be graded based on a tax return. This methodology was criticized in an article in the Stanford Social Innovation Review for taking into account only a single year's IRS Form 990.Lowell, Trelstad and Meehan: "The Ratings Game: Evaluating the three groups that rate the charities", ''Stanford Social Innovation Review'', Summer 2005:41. Available at [http://www.ssireview.org/articles/entry/the_ratings_game/]. This can lead to significant fluctuation in the ranking of a charity from year to year. Also, the focus on the IRS Form 990 has itself been criticized, as the accuracy and reliability of IRS Form 990 data is questionable.Lowell, Trelstad and Meehan: "The Ratings Game: Evaluating the three groups that rate the charities", ''Stanford Social Innovation Review'', Summer 2005:42. Available at [http://www.ssireview.org/articles/entry/the_ratings_game/]. Particularly relevant to Charity Navigator's methodology is that 59% of the 58,000 charities receiving public donations in 1999 failed to report any fundraising expenditures, illustrating a potential problem with relying upon IRS Form 990 figures alone when analyzing an organization. REFERENCES EXTERNAL LINKS FURTHER READING
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