Crowdsourcing, Transparency and Results Based Charity Ratings

Crowdsourcing, Transparency and Results Based Charity Ratings – The Next Generation of Nonprofit Evaluation Presented by Ken Berger, President & CEO NextGen:Charity New York, NY November 19, 2010 *Prototype for purpose of illustration only and in no way represents the final product.

Your Guide to Intelligent Giving Where the Heart Meets the Mind

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
Estimated 3 million distinct visitors per year
92% say evaluations affected their decision to support individual public charities
CN ratings influence decisions on billions in donations annually

(The Nonprofit Marketplace Hewlett Foundation, 2008) *Includes Charity Navigator- evaluates nonprofits and provides meaningful information. ** Includes individuals, foundations, corporations and government funders.

The Explosive Growth of Nonprofits in the US

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 Financial Health Accountability/Transparency Results More Comprehensive Rating System

THE EVOLUTION OF CHARITY NAVIGATOR
2001 – FORMED WITH A MISSION TO BE A DONOR’S GUIDE TO INTELLIGENT GIVING.
2002 – 2007 - USED IRS DATA (990’S) BECAUSE MANY NONPROFITS DIDN’T LIKE US! IT WAS THE ONLY DATA AVAILABLE FOR META ANALYSIS.
2008 - ANNOUNCED PLANS TO REVAMP RATING SYSTEM TO MOVE TO 3-DIMENSIONAL
2009 - FORMED ADVISORY PANEL
2010 - RECEIVED HEWLETT GRANT TO
LAUNCH VOLUNTEER STUDENT RATING PILOT
PROJECT TO SCALE UP & FIDELITY CGF TRUSTEE’S PHILANTHROPY FUND FOR STRATEGIC PLANNING .

100% Financial 33.3% Account- Ability/ Trans- parency + 66.6% Financial 50% Results + 17% Accountability/ Transparency + 33% Financial

SCALING UP: 6 Steps to a 3-Dimensional Rating System July 2010 Accountability & Transparency Methodology Launched (achieved) Fall/Winter 2010 Financial Metrics Revised (in process) July 2011 Methodology to Measure Results Launched (provided adequate funding is secured to scale up) Accountability & Transparency Now Part of Star Rating (in process) July 2012 Results Dimension Now Part of Star Rating (assuming data has now been collected for all charities in CN’s database) July 2013 Incorporation of reviews/data into Results Dimension (e.g. beneficiary satisfaction, volunteer reviews, expert reviews and independent impact evaluations.) 1 2 3 4 5 6

Working Capital
Current Ratio
SUSTAINABILITY (23) < 8 < 9 < 13 High Risk 0 Stars 8 – 11 9 – 10 13 – 17 Significant Risk 12 – 25 11 – 12 18 – 21 Intermediate Risk 26 – 37 13 – 14 22 – 26 Moderate Risk 38 – 50 15 – 17 27 – 33 Low Risk Keystone/NPC 7 Questions & 3 rd Party Reviews Web Site & 990s Overhead (3 yr. moving average) EFFICIENCY (10) RESULTS (50 Points) ACCOUNTABILITY/ TRANSPARENCY (17 Points) FINANCIAL (33 Points)

RESULTS 0 – 4 STARS 50 Points Max DCCK: 41 out of 50 ACCOUNTABILITY/ TRANSPARENCY 0 – 4 STARS 17 Points Max DCCK : 14 out of 17 FINANCIAL 0 – 4 STARS 33 Points Max DCCK: 27 out of 33 0VERALL SCORE: 0 – 4 STARS; 100 POINTS; RISK LEVEL DCCK SCORECARD: 82/100 POINTS Low Risk

TRANSPARENCY & ACCOUNTABILITY

RESULTS 7 Questions* - 50 Points Total Maximum *For this prototype, we are using 7 questions devised by Keystone Accountability and New Philanthropy Capital. 3 3. Does the charity report its activities (what it does)? 3 3. Does the charity report its outputs (short term results)? 3 2. How does the charity demonstrate the demand for its services? 5 1. What is the charity’s commitment to reporting results? Max Points QUESTION

RESULTS 7 Questions - 50 Points Total Maximum *Prototype for purpose of illustration only and in no way represents the final product. 12 7. Does the charity adjust and improve in light of its results? 14 6. What is the quality of evidence for reported results? 10 5. Does the charity report its outcomes (defined as the identifiable differences that it makes through its work)? Max Points QUESTION

Sample Agency Dashboard

EFFECTIVENESS/RESULTS 3 rd Party Evaluations/Reviews Weighted score based on quality and rigor of data:
Volunteer Reviews
Primary Constituents Feedback
Independent Expert Reviews
Independent In-depth Research and Analysis

Charity Navigator Soon to Launch Collaboration with GreatNonprofits
Charity Navigator users will now be able to write and read reviews by Donors, Clients Served, Volunteers, Former Staff, Board Members, General Public

Donors Can Expand for More Details GNP REVIEWS TO REPLACE COMMENTS TAB

NO GOOD DEED GOES UNPUNISHED

The Battle for the Soul of the Nonprofit Sector

OUR BEST HOPE
Educated and Engaged Stakeholders are our Best Hope!

More Information
Article: “The Battle for the Soul of the Nonprofit Sector” Berger, Penna and Goldberg, Philadelphia Social Innovation Journal of
Books:
Billions of Drops in Millions of Buckets by Steve Goldberg
2. Money Well Spent by Paul Brest, et. al
3. The Nonprofit Outcome Toolbox by Dr. Robert Penna (March 2011)
Web Sites
www.alleffective .org
www.keystoneaccountability.org
www.WhatWorks.org
Video : www.savingphilanthropy.org

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

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Crowdsourcing, Transparency and Results Based Charity Ratings

by CharityNav on Feb 18, 2011

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