Charity Navigator Methodology_ Demonstrating Impact to Build Trust.pdf

1. How to leverage trust
indicators to attract and retain
donors.
Demonstrating
Impact to Build
Trust

2. Michael Thatcher
Michael leads Charity Navigator in its efforts to make impactful
philanthropy easier for all by increasing the breadth and depth
of evaluation methodologies to facilitate rating coverage of
substantially larger numbers of charities and expand how the
information engages new and existing audiences.
● Former Microsoft CTO
● Co-founded a dance company
● Composer with a degree in music from Columbia
University
● Avid surfer and sailor
INTRODUCTIONS
Guiding mantra: Follow your heart - Use your head - Make a difference.

3. Jeremy Ladyga
Jeremy is a former CFRE, having raised nearly $25 Million for a
broad range of cultural and higher ed instructions. A proud
nonprofit tech geek at heart, Jeremy has dedicated the last
seven years consulting and advising nonprofits across a range
of fundraising, finance, and board management solutions to
help those doing good, do better.
● Musician with a degree in music from The Hartt School
● Brings 5 years' experience from Blackbaud to OnBoard
● Masters in Arts/Nonprofit Management from Carnegie
Mellon
● Most likely found either on a mountain or a golf course
INTRODUCTIONS

4. “Trust is like the air we breathe
– when it’s present, nobody
really notices; when it’s absent,
everybody notices.”
- Warren Buffett
The Role Trust Plays in My Life

5. Our mission: Make impactful giving easier for all
Helping people turn their values,
passions, and beliefs into meaningful
change and impact
● Providing the data, ratings, and advice that cut through the noise
● Supporting donors to make informed choices that turn intent into action
● Partnering with nonprofits to define strategic objectives that matter
Building a bridge of trust for all to cross
About Charity Navigator
OVERVIEW

6. Our mission: Make governance simple, effective, and secure
Helping nonprofits simplify governance
so they can focus on their mission and
accelerate their impact
● Making board meetings informed, seamless, and uncomplicated
● Transforming board collaboration and communication
● Innovating every day to empower modern boards
Helping today’s leaders create a better world
About OnBoard
OVERVIEW
Please note that this should not be considered as Charity Navigator’s endorsement of Onboard

7. Charity Navigator’s Tools and Resources
Ratings Curated Lists
Alerts
The Giving Basket API
Nonprofit Portal
OVERVIEW

8. Who Uses Charity Navigator?
OVERVIEW
Donors to ensure they are
giving to an effective,
impactful & trustworthy
organization
Foundations of all sizes use
as an initial due diligence
screen
Institutional DAFs
Use it when determining
recommendations for high
net worth philanthropists
Media
and the Press
Leverage data and content
for ongoing media stories
and when a crisis occurs
Nonprofit
Professionals
Corporations
Critical means to help guide
Corporate Social
Responsibility efforts
Individual Donors Foundations and
Grant Makers
Industry professionals use to
help guide career decisions

9. Trust and Giving Trends

10. Charitable organizations
are only seen as slightly
more trustworthy than
other organization types.
Source: Americans are generally positive about charitable giving and nonprofits but know little about philanthropy, have concerns about
transparency, study finds. April 6, 2023.
Trust in Organizations is Low

11. Individual Giving Has Been on a 20-Year Decline
Less than half of
U.S. households
make charitable
gifts - this is down
from 66% in the
year 2000.
In other words,
about 20 million
households
stopped giving.
Source: IU Lilly Family School of Family Philanthropy, The Giving Environment July 2021.
*Shows one data set from the study from the Philanthropy Panel Study (PPS).

12. The Number of Charitable Organizations is at an All-Time High
Nearly 1.5 million
charitable
organizations in the
US.
Source: IU Lilly Family School of Family Philanthropy, The Giving Environment July 2021.

13. Challenges
Less Trust
PROBLEM STATEMENT
Stand out from the crowd
when you demonstrate your
organization’s impact
Opportunities
for Nonprofits
Institutions continue to
see declining trust
worldwide
Individual donor
population continues to
shrink
More Nonprofits
As the safety nets of
society continue to be
stretched, more
nonprofits appear
Less Trust Fewer Donors
Collaborate and accomplish
more together

14. Demonstrating Impact
to Build Trust

15. Charity Navigator Ratings
RATINGS
Drawing from a knowledge base of research, analysis, and
constituent feedback, our team develops ratings that are both
analytical and responsive to the data needs of our site users.
Eligible charities receive a zero to four-star star rating — this is
determined by the weighted sum of the organization’s
individual beacon scores (0-100).

16. Providing guidance through beacons
RATINGS
Our Encompass Rating System provides a comprehensive analysis of charity performance across four key
domains, which we call "beacons."
All aspects of our rating system are designed to convey
TRUST & IMPACTFULNESS

17. Leadership &Adaptability:
Build Trust with Clarity of
Mission & Strategy
● Examine your reason for being.
● Ensure you have a concise mission and vision.
● Use your mission to inspire and rally the
internal team and guide its activities.
● Bring mission to life externally through
consistent verbiage, photography, and
videos.
● Show that you are executing the mission
effectively via a carefully formed strategy
Donors are more likely to support a charity
if they believe in its mission and values.
Data Source: charitynavigator.org/portal

18. Culture & Community: Be Equitable and Feedback-driven
● Collecting & utilizing feedback signals:
○ A commitment improve program
quality and outcomes
○ A willingness to be responsive to
their concerns and suggestions.
○ Addressing issues promptly and
transparently shows you are a
learning organization
● The adoption of Equity Practices has
been shown to:
○ improve organizational health and
staff well being
○ Quality of programming,
particularly in the human services
sector.
Data Source: Candid’s Profile Manager

19. Conveys:
● Financial health & sustainability
● Transparency
● Strong Governance Practices
Tells the donor:
“We have the practices in place to
ensure that we follow fiduciary and
governance best practices and that we
use donation dollars wisely.”
Accountability & Finance
Data Source: IRS Form 990

20. Impact & Results: Show Donors the Difference Their
Donations Make
● Measure outcomes & display
● Engage in program evaluation and seek
external validation
Provides donors insight into the difference
their contributions are making on the cause
they care about
It helps answers two questions:
1. Is this nonprofit achieving its mission?
2. Is this nonprofit achieving its mission in a
way that it is cost-effective?
Data Source: charitynavigator.org/portal

21. Understanding a Charity Rating: What does it mean?
Charities that earn more beacons
provide donors with a more
comprehensive overview of
organizational effectiveness.
We use a weighted average of beacon
scores to create the overall numeric
score.
Together, these four beacons tell a
story of trustworthiness, sustainability,
impact, mission-orientation, and
beneficiary focus.
VS

22. Case study
Direct Relief

23. Make Your Mission Palpable
Keeps mission
top-of-mind at all
times
Rarely sends
fundraising emails
Focuses on sharing
outputs and
outcomes
Case study: Direct Relief

24. Feature Outputs & Outcomes Frequently & Prominently
Timely
updates

25. Bring Impact to Life Through Storytelling
When people are choosing
what to watch, relating to
their passions is 1.6X more
important than whether
content has high
production quality.
Source: Think With Google, Quality is in the eye of the beholder: new research on what viewers love April 2019.

26. Prominently Feature Trust Indicators on Website
Source: “Do Donors Use Charity Watchdogs?” Grey Matter Research & Consulting, October 6, 2020
“36 million people – do use charity watchdogs when they
consider supporting an organization. And in fact, over 23
million donors always or usually use a charity watchdog to
check out organizations.”

27. Make the Donation Process a Great, Trustworthy Experience
Dropdown offers choice
Giving is good medicine. Everything Direct Relief does, every person whose
life is saved or improved, stems from an act of generosity that's purely
voluntary. You don't have to donate. That's why it's so extraordinary when
you do.
Thankful from the start
Trust Indicators clearly
presented

28. Steps Your Organization Can
Take Today to Bolster Trust

29. Transform the Nonprofit
Narrative
“Our generation does not want its epithet to
read, ‘We kept charity overhead low. We want it
to read that we changed the world.”
Dan Pallotta
Based on a survey among Charity
Navigator donors, 80% would rather
donate to a four-star charity with all
four beacons compared to one beacon,
likely because it conveys transparency,
impact, and trust.
ACTION ITEMS

30. Bolster Trust Today
ACTION ITEMS
1. Ensure mission and impact are front and
center in all communications.
○ Lead with outcomes instead of
overhead in your solicitations
2. Gather and implement feedback from
beneficiaries and supporters.
3. Earn and improve nonprofit ratings as
trust indicators.
○ Keep your information current with
all third-party intermediaries (IRS,
Charity Navigator, Candid, etc.)
4. Leverage trust indicators on your
homepage, online donation form, direct
mail, and more.
Update your organization’s Charity Navigator
rating and profile and download your badge
Visit charitynavigator.org/portal

31. The Charity Navigator
Masterclass
Presented by OnBoard x Charity Navigator
THANKYOU
Session 1: Accountability & Finance Beacon | Sept. 12 @ 2pm ET
Session 2: Culture & Community Beacon | Sept. 20 @ 2pm ET
Session 3: Leadership &Adaptability Beacon | Oct. 3 @ 2pm ET
Session 4: Impact & Results Beacon | Oct. 20 @ 2pm ET
Sign Up Now!
An exclusive four part series that explores how
and why Charity Navigator rates nonprofits,
covers each Charity Navigator Beacon in detail.
Session Details

32. Questions?

33. Stay Connected to
Charity Navigator
Update your organization’s rating and profile by
creating an account with our Nonprofit Portal.
Additional questions?
Send us a note at info@charitynavigator.org.
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twitter.com/CharityNav
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linkedin.com/company/charity-navigator/

34. Stay Connected to
OnBoard
Explore how board management software can
empower nonprofit boards to lead with ease,
equity, and purpose.
Additional questions?
Send us a note at more@onboardmeetings.com
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