Charity Navigator is an American independent charity watchdog
organization that evaluates charitable organizations in the United
States. Its stated goal is "to advance a more efficient and responsive
philanthropic marketplace in which givers and the charities they
support work in tandem to overcome the nation’s and the world’s
most persistent challenges".
2 Evaluation method
5 See also
7 External links
Charity Navigator was launched in spring 2001 by John P. (Pat) Dugan,
a wealthy 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. Initially, Charity Navigator
provided financial ratings for 1,100 charities, and has data on 8,500
as of mid-2017.
The site also features opinion pieces (articles and two blog sites) by
Charity Navigator experts, donation tips, and top-10 and bottom-10
lists that rank efficient and inefficient organizations in a number of
Charity Navigator conducts a national study to
determine and analyze any statistical differences that exist in the
financial practices of charities in metropolitan markets across
The service is free, and the site is navigable by charity name,
location or type of activity.
Charity Navigator is a 501(c)(3)
organization that accepts no advertising or donations from the
organizations it evaluates.
In 2006 Time magazine named it in one of the 50 top websites of the
year. In 2011,
Kiplinger's Personal Finance
Kiplinger's Personal Finance selected Charity
Navigator as a Money Management Innovation for "helping millions of
people become philanthropists", putting it in the same category as
TurboTax and Mobile Banking Apps.
In a September 15, 2014
Chronicle of Philanthropy interview on the
Nicholas Kristof identified
Charity Navigator 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."
In a 2014 survey of attitudes toward charity evaluation seals shaping
donor decisions about a charity, Charity Navigator's was rated six of
seven on a list of those presented in the survey.
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.
Based on how the charity rates in each of the two areas, it is
assigned an overall rating, ranging from zero to four stars. To help
donors avoid becoming victims of mailing-list appeals, each assessment
of a charity's performance is accompanied by a review of its
commitment to keeping donors' personal information confidential.
This method was criticized in an article in the Stanford Social
Innovation Review for taking into account only a single year's IRS
Form 990. This can lead to significant fluctuation in the ranking
of a charity from year to year. Also, the focus on the IRS Form
990 has itself been criticized, as the accuracy and reliability of IRS
Form 990 data is questionable. Form 990 categorizes a charity's
expenditures into three broad categories that are open to accounting
manipulation. The nonprofit sector does not have the strict financial
regulation and transparency required from public corporations (under
the Securities Act of 1933, the Securities Exchange Act of 1934, and
the Sarbanes-Oxley Act, among others), creating limitations on how
accurately a charity's efficiency can be graded based on a tax return.
Particularly relevant to Charity Navigator's methodology is that 59%
of the 58,000 charities receiving public donations in 1999 failed to
report any fundraising expenditures, illustrating a potential problem
with relying on Form 990 figures alone when analyzing an
Charity Navigator never included charities that claim to have
no fundraising expenditures. Furthermore, it only 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), and argues these charities have
better expertise for reporting to the IRS, are under greater public
scrutiny and therefore their reporting tends to be more accurate.
As of December 2007,
Charity Navigator would recommend donors support
concerns that meet six criteria:
Able to communicate who they are and what they do
Defined short-term and long-term goals
Able to state the progress it has made (or is making) toward its goal
Programs make sense to the donor
Programs that the donor feels they can make a long-term commitment to
In December 2008, President and
CEO Ken Berger announced on his blog
that the organization intends to expand its rating system to include
measures of the outcomes of the work of charities it evaluates.
This was described in further detail in a podcast for The Chronicle of
Philanthropy in September 2009. The article explained that plans for a
revised rating system will also include measures of accountability
(including transparency, governance and management practices) as well
as outcomes (the results of the work of the charity).
In July 2010,
Charity Navigator announced its first major revamp.
This revamping begins what the organization states is the process to
move toward CN 3.0, which is a three-dimensional rating system that
will include what they consider the critical elements to consider in
making a wise charitable investment – (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.
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. Charity Navigator's website explains the new
methodology and its plans for the future.
In recent years,
Charity Navigator has become outspoken against what
it calls high
CEO compensation. At the same time, they note that
nonprofit CEOs should be paid what the market demands. They complete a
CEO compensation study each year. In the study, they have
consistently argued that a low six-figure salary for a
CEO of a
mid-to-large sized nonprofit is the norm and should be acceptable to
donors. They further argue that these are complex multimillion dollar
operations that require a high level of expertise. They are however,
outspoken against the phenomenon of million dollar plus compensation,
which they do not believe is justified for a tax-exempt public
On its 2014 Form 990,
Charity Navigator reported the salary of
Berger as $160,644.
Charity Navigator compiles lists of charities that contract
fundraising to corporate solicitors who retain more than 50% of the
charity's budget. The charities were "ranked by the percentage of
their total functional expenses spent on professional fundraising
fees." The worst was the Disabled Police and Sheriff's Foundation
which only kept 5.8% for its own programs and services. The rest of
the donations, which represented 90.5 percent of the total collected
went to the for-profit fundraisers. Both The Cancer Survivors' Fund,
and The Association for Firefighters & Paramedics saw over 80
percent of donations retained by the corporate fundraisers.
Helping Hand Charities
American Institute of Philanthropy
^ a b c d e f "Board and Staff". Charity Navigator.
Charity Navigator Mission". Charity Navigator. 2014. Retrieved 14
^ Gunther, Marc (5 April 2015). "Why
Charity Navigator needs an
upgrade". Nonprofit Chronicles. Retrieved 6 July 2015.
^ Overholt, Alison. Charitable Deductions:
Charity Navigator dares to
hold the nation's nonprofits accountable for their fund-raising,
^ Ann Carrns.
Charity Navigator Tweaks Its Rating System. New York
Times. 27 May 2016.
^ "50 Coolest Websites for 2006". TIME Magazine. No. August 2006.
^ "20 Financial Innovations You Can't Afford to Ignore". Kiplinger.
^ "Inspiring People to Make a Difference". The Chronicle of
^ Janna Finch. "Survey: Do Ratings From Watchdog Groups Impact Giving
^ a b c d Lowell, Trelstad and Meehan (Summer 2005). "The Ratings
Game: Evaluating the three groups that rate the charities". Stanford
Social Innovation Review.
^ "What Kind of Charities Do We Evaluate?". Charity Navigator.
Retrieved 15 September 2010.
^ "UI Press - Nonprofit Almanac 2008 - Summary". urban.org.
^ "6 Questions To Ask Charities Before Donating". Charity Navigator.
^ "A Measure of Outcome". Kenscommentary.org. December 8, 2008.
Retrieved 15 September 2010.
Podcast Interview". September 11, 2009. Retrieved 15
^ Ken Berger (July 1, 2010). "
Charity Navigator Expands Rating
Methodology". Charitiy Navigator. Retrieved 15 September 2010.
^ a b "Where We Are Headed (2013 and Beyond)". charitynavigator.org.
Retrieved 6 July 2015.
^ Berger, Ken (2011-09-20). "Ken's Commentary: CN 2.0: More Knowledge,
More Good". Kenscommentary.org. Retrieved 2012-01-05.
CEO Compensation Study". Charity Navigator. August 4, 2010.
Retrieved 13 September 2010.
^ "2014 Form 990" (PDF). Charity Navigator. November 30, 2014.
Retrieved 6 July 2014.
^ "10 Charities Overpaying their For-Profit Fundraisers". 2017.
Retrieved December 20, 2017.
Charity Navigator's official website
Organizational Profile – National Center for Charitable Statistics
Charity Navigator at Curlie (based on DMOZ)
President & CEO, Ken Berger's blog
Types of charitable
Charitable trust / Registered charity
Mutual-benefit nonprofit corporation
Public-benefit nonprofit corporation
Charity and religion
Giving What We Can
Charity / thrift / op shop
Earning to give
List of charitable foundations
Master of Nonprofit Organizations
Wall of Kindnes