How do you evaluate charities?
Our ratings are guided by two goals: helping donors make informed decisions and recognizing the work charities do to create impact. Using research, data analysis, and feedback from charities and donors, we evaluate organizations based on charity best practices.
Each charity is assessed across four key areas, called beacons. Encompass ratings are built from approximately 45–50 metrics (depending on factors like revenue size and donor support). Each metric is scored on a 0–1 scale and combined using a weighted formula to produce an overall 0–100% Encompass score, which is also translated into a 0–4 Star Rating. See our Rating Methodology Guidebook HERE.
What does it mean that the charity I am reviewing is not rated?
To receive an Encompass Rating, a nonprofit must be a U.S.-based 501(c)(3) public charity. Private foundations, nonprofit subsidiaries, and organizations with revoked or inactive IRS status are not eligible.
Eligible charities must also meet the following criteria:
Charity Navigator must directly receive at least three electronically filed IRS Form 990s within the past six years (these do not need to be consecutive).
At least two of the four most recent filings must be the standard Form 990, and the most recent filing cannot be a Form 990-PF.
Report total functional expenses greater than zero, with program expenses not exceeding total expenses.
Have no Charity Navigator “Giving Not Recommended” alert.
A charity may be listed but not rated if it does not yet meet Form 990 filing requirements, is newly registered, files only Form 990-EZ or 990-N, or is otherwise ineligible for an Encompass Rating.
How does Charity Navigator calculate a charity's overall score?
Charity Navigator evaluates charity performance across four areas, called beacons: Accountability & Finance, Impact & Measurement, Leadership & Planning, and Culture & Compensation. Metrics within each beacon are combined to calculate an overall score, which is displayed as a star rating from 0 to 4. See our Rating Methodology Guidebook HERE.
Where does the data come from?
We evaluate charities based on self-reported data and publicly available IRS Form 990s. The Form 990 is a tax form prepared from professionally audited financial statements, signed under oath by an executive affirming their accuracy, and submitted to the IRS and the state attorney general.
What is your ratings scale?
Individual metrics are scored on a scale of 0 to 1 and are displayed on charity rating pages as percentages. These scores are combined to produce an overall Encompass Rating. Star ratings are on a 0-4 scale. See our Rating Methodology Guidebook HERE.
What is the “Complete Profile” banner?
The “Complete Profile” banner indicates that a charity has submitted all required, up-to-date information for its Encompass Rating. Complete data profiles help donors make informed giving decisions and are prioritized in search results.
Why do you use the IRS Form 990?
We use IRS Form 990 because it is the only financial document that charities are legally required to make publicly available. In addition to financial information, the form includes details about a charity’s governance, policies, and procedures.
Because Form 990 follows a standardized format with consistent instructions, it allows us to collect uniform and comparable data.
How current is your data?
We typically receive Form 990 data from the IRS three to four months after a charity files. We display the fiscal year-end of each Form 990 that we use on the charity’s rating page so users can see the period the rating is based on.
Charities have up to 135 days after their fiscal year ends to file Form 990s, and many request extensions. As a result, filings often occur 8–10 months after the close of the fiscal year.
Self-reported data must be updated at least every four years. Any self-reported data older than four years is automatically removed from the Encompass Rating and the charity’s rating page.
When do you publish new and updated ratings?
New and updated ratings are published about every other month. See our schedule of updates HERE.
Does Charity Navigator charge for its evaluations?
No. Charity Navigator charges neither the user for the data nor the charity for being listed. Our goal is to guide intelligent giving and serve as a resource for the educated giver.
Does the CEO's Salary impact a charity's rating?
CEO salaries vary for many reasons, including geography, organization size, prior experience, specialized expertise, etc. We provide CEO compensation as an unscored data point in the "Salaries of Key Persons" sub-section of the Accountability & Finance beacon.
While this information is unscored, it offers donors an additional insight into the charity. It's important to note that the compensation for the CEO and all other employees is included in the total allocation of expenses, which does impact other scored metrics.
Why is the CEO's salary greater than the amount the charity spends on administrative expenses?
A CEO’s salary is not counted entirely as an administrative expense. Like other staff salaries, it is allocated across program, administration, and fundraising based on how the CEO spends their time.
For example, if an employee earns $50,000 and spends 60% of their time on programs and 40% on fundraising, then $30,000 is recorded as program expense and $20,000 as fundraising expense.
The same principle applies to CEOs. Many CEOs spend significant time on fundraising and, in some cases, directly support programs and services. As a result, only a portion of the CEO’s salary is categorized as an administrative expense, which can make total administrative expenses appear lower than the CEO’s total salary.