"Charity Watchdogs" are organizations that provide information and ratings on nonprofits for the public. These ratings allow donors to analyze and evaluate charities based on criteria such as efficiency, effectiveness, financial health, and program impact.
Each watchdog organization uses different algorithms and criteria to evaluate charities, so it is worth investigating how your organization stacks up on the various websites.
Below are five Charity Watchdog organizations that are worth your attention.
Charity Navigator’s mission is to make impactful giving easier for all by providing free access to data, tools, and resources to guide philanthropic decision-making. They have rated over 225,000 charities to date, and they develop their ratings by assessing overall health and impact of programs, financial stability and transparency, strategic leadership, and overall culture and community.
GuideStar is primarily an information source, providing a searchable database of nonprofit 990 forms and additional data on over 2 million nonprofit entities. It provides donors with a way to learn more about your organization and compare your financials with others. Nonprofits can also opt to provide additional information on their finances and impact to be awarded a "Seal of Transparency".
Learn more about GuideStar in our helpful related guide, which can be found here.
The Better Business Bureau’s Wise Giving Alliance provides accreditation for charities based on factors like governance, finances, results reporting, transparency and appeal accuracy. To become accredited, your organization must complete a detailed online questionnaire. Charities that meet the measures of success for all 20 of the BBB Charity Standards are then considered "accredited."
Charity Watch’s goal is to independently research and evaluate the efficiency, accountability, and governance of nonprofits and to educate the public on how to give wisely. They evaluate about 600 charities nationwide, with a focus on large nationwide organizations. In addition to an in-depth financial review, they look at Program % (how much of your expenses go directly to programs) and Cost to Raise $100. They consider a charity to be high efficiency if these are 75% or greater and $25 or less, respectively. To help the public assess charities, they issue letter grades from A to F based on these criteria.
Great Nonprofits provides a Top-Rated Badge to nonprofits that receive ten or more favorable reviews and stories from volunteers, clients, and/or donors, and that maintain a minimum rating of 3.5 according to their criteria. Those who receive the badge receive marketing materials to publicize the honor, can display the badge on their website, and are highlighted throughout the year by Great Nonprofits. The submitted reviews are also made available on other watchdog websites such as GuideStar and JustGive.
Conclusion
You may or may not agree with each watchdog’s various methods that they use to evaluate efficiency, effectiveness, and impact. However, it is clear that donors have come to rely on these sources to find charitable organizations that they can trust. That is why your organization needs to be aware of these ratings, and how your organization might be depicted based on each website's different measures.
If there are pieces missing that would increase your organization’s rating, do your best to meet those requirements and improve your positive ratings. It is also important that all of us within the nonprofit sector educate our communities about what these ratings mean, what they measure well, and where they fall short - so everyone feels more prepared and confident in their giving.