Charity Navigator: Financial Measures and Beyond

Charity Navigator: Financial Measures and Beyond Presentation at InsideNGO: Finance Grants and Contracts Annual Meeting Ken Berger, President & CEO July 13, 2010

AGENDA
What limitations exist with the current rating system?
How should nonprofit impact be measured beyond simple metrics of financial ratios or program outputs?
What is in store with the next generation of charity effectiveness rating systems?
One smile and one fact

America's premier
independent charity
evaluator providing timely, relevant,
unbiased information on the fiscal health
of nonprofit organizations.
Largest evaluator of charities: 5,500+
#1 Web Site for Rating Charities – “Your Guide to Intelligent Giving”

The Data Proves Impact
92% say evaluations affected their decision to support individual charities
CN ratings influence billions in donations
The majority of CN users are: Older, Higher Income, More Educated, Online Investors

Mission
1.
To help private contributors make intelligent decisions when selecting a charity to support, by providing information on our evaluation of the performance of charities.

Mission (continued)
2.
To educate private contributors and policymakers by providing information regarding what is of critical importance when making a social investment in a nonprofit.

Mission (continued)
3.
To drive more funding to high performing nonprofits by highlighting them and providing them with objective information to leverage with their supporters and prospective social investors.

Our Old Rating System – One Dimensional

The Problem?

The Solution!: A 3-D View

QUALITIES OF A HIGH IMPACT ORGANIZATION Accountability & Transparency Financial Health
Positive, sustainable change
Independently evaluated
HIGHER RISK INVESTMENT LOWER RISK INVESTMENT

Introducing CN 2.0: A 3-D View Financial Health Accountability/Transparency Effectiveness/Results More Comprehensive Rating System

Accountability & Transparency Accountability & Transparency

Accountability & Transparency : IRS 990 Reporting Form Info.

Accountability & Transparency: Web Site Information

Accountability & Transparency: More on Web
Does the charity web site have readily accessible information about the following:
Its goals and objectives?
Its strategies for achieving them?
Its capacity for achieving them?
How it measures progress in achieving them?
What its measurements indicate about progress to date?

Effectiveness & Results: The Holy Grail Effectiveness & Results: The Holy Grail

Effectiveness & Results: Collaboration
Independent Sector/BBB – self report
GiveWell – deep data review
GreatNonprofits - everyone
Growth Philanthropy Network – “almosts”
Keystone Accountability - constituents
Philanthropedia – experts
New Philanthropy Capital – overall analysis

The Battle for the Soul of the Nonprofit Sector

More Information
Articles: in Philadelphia Journal of Social Innovation
“ The End of Charity” by David Hunter
“ The Battle for the Soul of the NP Sector” by Berger, Penna and Goldberg
Book : Billions of Drops in Millions of Buckets: Why Philanthropy Doesn’t Advance Social Progress by Steve Goldberg
Web Sites
www.alleffective .org
Google: Nonprofit Effectiveness, Independent Sector
Video : www.savingphilanthropy.org

Your Questions & Our Web Addresses Website- www.charitynavigator.org Blogs- www.kenscommentary.org blog.charitynavigator.org Twitter- kenscommentary

Charity Navigator: Financial Measures and Beyond

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Charity Navigator: Financial Measures and Beyond Presentation Transcript