Charity Navigator

History

Charity Navigator was launched in the spring of 2001 by John P. (Pat) Dugan, a pharmaceutical executive and philanthropist. The group's mission was to help "donors make informed giving decisions and enabling well-run charities to demonstrate their commitment to proper stewardship" of donor dollars.

Over the years, the group grew from 1,100 to over 230,000 charities.

In 2011, Kiplinger's Personal Finance selected Charity Navigator as a Money Management Innovation for "helping millions of people become philanthropists", and it was on Time magazine's top 50 websites of 2006 list.{{cite magazine |title=50 Coolest Websites

In a 2014 Chronicle of Philanthropy interview on the nonprofit sector, journalist Nicholas Kristof identified it with a trend he deplored: "There is too much emphasis on inputs and not enough on impact", Kristof said. "This has been worsened by an effort to create more accountability through sites like Charity Navigator. There is so much emphasis now on expense ratios that there is an underinvestment in administration and efficiency."{{cite web

A 2014 survey of attitudes toward charity evaluation indicated positive results for Charity Navigator in six of seven categories.{{cite web |url-status=dead |archive-url=https://web.archive.org/web/20170424142656/http://able-altruist.softwareadvice.com/survey-do-watchdog-ratings-impact-giving-0714/ |archive-date= Apr 24, 2017

Charity Navigator developed and added the Giving Basket to their website in 2015, making it easier for donors to give a one-time or monthly donation up to $100,000.

In October 2020, Charity Navigator acquired impact-based charity evaluator ImpactMatters.

In 2021, the Giving Basket was powered by Give Lively, which does not charge a fee for the transfer of funds to organizations.

In August 2023, Charity Navigator acquired Causeway, a philanthropy technology startup.

Evaluation method

Using publicly available tax returns (IRS Form 990) filed with the Internal Revenue Service and information posted by charities on their web sites, the Charity Navigator rating system bases its evaluations in two broad areas—financial health and accountability/transparency.{{cite news

Limitations of initial methodology

In the early years, the group's methodology was the subject of some criticism for its approach at the time. This method was criticized in a 2005 article in the Stanford Social Innovation Review for (at the time) taking into account only a single year's IRS Form 990.{{cite web

Charity Navigator rates the 6% of charity organizations in the United States that have over $1 million in annual revenue (these 6% get 94% of the revenues that come into the nonprofit sector each year).

Revisions

In December 2008, President and CEO Ken Berger announced on his blog that the organization intended to expand its rating system to include measures of the outcomes of the work of charities it evaluated.{{cite web |access-date=15 September 2010 |archive-url=https://web.archive.org/web/20110725222316/http://www.kenscommentary.org/2008/12/measure-of-outcome.html |archive-date=25 July 2011 |url-status=dead |access-date=15 September 2010 |archive-url=https://web.archive.org/web/20100718154348/http://www.kenscommentary.org/2009/09/kens-podcast-interview.html |archive-date=18 July 2010 |url-status=dead

In July 2010, Charity Navigator announced its first major revamp.{{cite web |access-date=15 September 2010 |archive-url=https://web.archive.org/web/20100819075746/http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=1107 |archive-date=19 August 2010 |url-status=dead

1. financial health (Charity Navigator evaluated this from its inception),
2. accountability and transparency (begun in July 2010) and
3. results reporting (slated to begin rating this dimension in July 2012).

After collecting data for more than a year, in September 2011 Charity Navigator launched CN 2.0, which is a two-dimensional rating system that rates a charity's: (1) financial health, and (2) accountability and transparency.

Expansions

In January 2013, Charity Navigator announced another expansion to its rating methodology, "Results Reporting: The Third Dimension of Intelligent Giving". Because mission-related results are the very reason that charities exist, Charity Navigator developed this new rating dimension to specifically examine how well charities report on their results. The new rankings now include "various criteria, including ... privacy policies".{{cite web |website=The New York Times

In July 2020, Charity Navigator announced an additional nonprofit rating system, Encompass. The new Encompass Rating System analyzes nonprofit performance based on four key indicators:

1. Finance & Accountability
2. Impact & Results
3. Leadership & Adaptability
4. Culture & Community

This alternative methodology allows the organization to increase the total number of rated nonprofits from 9,000 to 160,000 at launch. The rating system launched with the first key indicator, Finance & Accountability, with a plan to release additional indicators over the next 18–24 months.

Since then, Chartity Navigator has continued to expand its methodology to include additional impact ratings, and assessments on Equity policies and practices, feedback and measurement best practices. As of June 2024, there are over 230,000 rated organizations and over 3000 organizations rated on Impact & Measurement.

Improvements in response; reception

Some charities, in response, began to supply more information. The New York Times reported in 2010 that one non-profit began "reporting on its finances using the same format as the 10-K."

In response to an op-ed authored by Charity Navigator's CEO entitled "The Elitist Philanthropy of so-called Effective Altruism",{{cite news |date=November 25, 2013

References

References

1. "Board and Staff". Charity Navigator.
2. "Board of Directors : Charity Navigator".
3. "Charity Navigator".
4. (2023-09-25). "Charity Navigator Announces Methodology Update".
5. Piper, Kelsey. (October 16, 2020). "Which charities do the most good? Charity Navigator joins the effort to answer this crucial question.".
6. (February 16, 2021). "COVID relief drives record giving at Community Foundation; grants topped $87.5M in 2020".
7. "Charity Navigator: About Us".
8. (2020-02-06). "Save the Children Earns a 4-Star Rating from Charity Navigator".
9. Mayo, Jennifer. (2025). "Navigating the Notches: Charity Responses to Ratings". Journal of Political Economy Microeconomics.
10. Schmid, Moritz. "Opening the Black Box of Nonprofit Reputation and Volunteer Attraction With Supervised Machine Learning". Nonprofit Management and Leadership.
11. Stephanie Strom. (November 26, 2010). "To Help Donors Choose, Web Site Alters How It Sizes Up Charities". [[The New York Times]].
12. Marc Gunther. (April 5, 2015). "Why Charity Navigator needs an upgrade". Nonprofit Chronicles.
13. Overholt, Alison. (August 2003). "Charitable Deductions: Charity Navigator dares to hold the nation's nonprofits accountable for their fund-raising".
14. Benz, Christine (17 November 2021). [https://www.morningstar.com/articles/1040717/which-charities-deserve-your-dollars "Which Charities Deserve Your Dollars"]. ''Morningstar''.
15. (June 2011). "20 Financial Innovations You Can't Afford to Ignore". Kiplinger.
16. Cole, Amanda L.. (2023-08-23). "Charity Navigator Acquires Causeway".
17. (2020-10-14). "ImpactMatters has been acquired by Charity Navigator.".
18. Waasdorp, Erica. (2023-03-22). "Charity Navigator’s Kevin Scally Talks Recurring Giving Stats and Trends".
19. "Causeway".
20. "Charity Navigator Acquires Causeway, Revolutionizing Giving through Customizable Donor Portfolios".
21. "Ratings | Charity Navigator".
22. "UI Press - Nonprofit Almanac 2008 - Summary". urban.org.
23. "Where We Are Headed (2013 and Beyond)". charitynavigator.org.
24. Berger, Ken. (2011-09-20). "Ken's Commentary: CN 2.0: More Knowledge, More Good". Kenscommentary.org.
25. "Charity Navigator Initiates New Era in Charitable Giving with Launch of Encompass Rating System".
26. "Charity Watchdog Launches New Rating System". The NonProfit Times.
27. Toussaint, Kristin. (2020-07-29). "Charity Navigator is launching a new rating system to help better evaluate nonprofits".
28. William MacAskill. (December 3, 2013). "What Charity Navigator Gets Wrong About Effective Altruism (SSIR)".