Charity? December 12, 2017 Youre scoping out prospective donors - - PowerPoint PPT Presentation

How are Charity Ratings Organizations Evaluating Your Charity?

December 12, 2017

You’re scoping out prospective donors – while they do their homework on you

• Who could best use my money?
• How would they use it?
• What kind of impact?
• Where do I get the information to make an

informed decision?

Getting questions answered:

• Independent evaluators:

Resources – beyond personal relationships:

• https://www.charitynavigator.org/
• 501c3
• Founded 2001 by Pat and Marion Dugan
• Born out of the horrors of Hale House
• Substituting the emotion with unbiased

financial data

• “Finding a charity you can trust”
• 10+ million visitors per year

Charity Navigator: “Intelligent Giving”

• 4-star rating system based on formulas
• Two major areas:
• Financial Health
• Accountability & Transparency
• 9,000+ charities rated though provide unrated

charities with info pages

• Info free to public

What they do:

• Those required to file 990’s (but not 990-PF’s)
• > $100 million in revenue in most recent year

w/$500+k coming from private donors

• Provided at least 7 years of Forms 990’s to CN
• US-based charities registered with IRS, though

scope of work can be international

• Orgs who actively solicit donations
• Type of charity not a consideration

Who they evaluate:

• Use your 990 filings (no family foundations) to

see where/how $ spent:

• dedicated to programs
• managing/administering operations
• raising funds
• Focus on how much of $1 donated spent on

mission

Financial Health

• Added in 2011 - using your 990 filings plus

your website to look at:

• Governance practices
• Independent audits and reports
• Leadership salaries – and reasoning behind it
• Board members, meeting minutes and related

activities

• Is there a donor privacy policy on your site
• And more . . .

Accountability & Transparency

• Searchable list of charities (both rated and

non-rated) by name or other features

• Breakdown on categories and the sub-areas –

showing what was included and not

• Specific scores and financial reports
• History of ratings/scores with

acknowledgement of changes in evaluation process

How help donors:

• Different lists – “Top Ten Lists” including one
• f those with Perfect Scores
• Advisories – the lists you don’t want to be on

based on ethical or legal objective data

• Low Concern
• Moderate Concern
• High Concern
• Let’s look at live site

How help donors:

• If an unrated organization – nothing directly.

All info comes from IRS. Submit changes to 990’s to IRS.

• If a rated organization – financial info comes

from IRS, so amended 990 will be

• incorporated. Other info updates (changes in

leadership; mission statements; etc.) through a login on site – will be evaluated by reviewer.

What can you do

• Be ready – started collecting data on results or

“impact” and sometime in near future will begin to incorporate into ratings.

What can you do

• https://www.charitywatch.org/
• 501c3
• Founded 25 years ago as American Institute of

Philanthropy (AIP)

• Getting beyond the self-reported data
• Adjust numbers based on research

CharityWatch: “You give wisely”

• More than tax filings – includes audit financial

statements and annual reports

• According to CharityWatch, ratings are most

stringent in the sector – though fair.

• Approx. 624 orgs reviewed – including social

welfare groups (not eligible to receive tax- deductible donations (ACLU, Sierra Club, etc.)

• Grade free to public

What they do:

• Those required to file 990’s (but not 990-PF’s)
• > $1 million or more of public support each

year

• Are of interest to donors nationally
• Been in existence 3+ years
• Those of interest to their “members” –

supporters

Who they evaluate:

• Getting beyond basic numbers to see what

holes and/or what is not being represented

• Directly quiz the nonprofit, when needed
• Focus on how much of $1 donated is really

spent on mission

Investigators

• Searchable list of charities (both rated and

non-rated)

• A to F grade plus some aggregated/select

financials available to public; specifics to members – those who pay an annual fee/donation to help support the research

How help donors:

• A few lists – “Top-Rated Charities” – less than

25 cents to raise a dollar – B+ or better grade

• Top Compensation – for charities whose

leaders receive high compensation (a blend of compensation, contribution to benefit plans and expense accounts/allowances)

• High Assets – those holding more than 3 years
• f operating costs – members only
• Let’s look at live site

How help donors:

• Not much - beyond what you would do

anyway – provide best information possible and if contacted, provide requested info.

What can you do

• http://www.guidestar.org/
• 501c3
• Neutral – no ratings
• Highly respected resource
• All about transparency
• Wants to include all 501c3 organizations –

1.8+ million organizations listed

GuideStar: “Powering Philanthropy”

• Multi-prong approach – reported data via IRS;

financial audits; donor info (some via GreatNonprofits) and self-reported information from nonprofit

• “The search engine for nonprofit information”
• Supports others - including funders and

businesses collecting donations for nonprofits

• like AmazonSmile
• Verifies and informs

What they do:

• 1.8 million IRS-recognized tax exempt
• rganizations
• Faith-based nonprofits who aren’t required to

register with IRS

Who they evaluate collect info about:

• Financial – both reported (filings) and audited
• Details and insights not part of other profiles,

including reviews from donors and volunteers

• f nonprofit (typically from GreatNonprofits)

Wants comprehensive view:

• Searchable list of charities by name or other

features

• Additional layers of detail and analytics

available to members (foundations, typically)

How helps donors, funders – and others:

• Data (both free level and more detailed

paid) available via API for automating information to be used in other ways – like providing crowdwise with the list of 501c3s and their addresses for crowdfunders.

• Let’s look at live site

How helps donors, funders – and others:

• Complete your online profile – not everyone

has (less than 150k at this point)

• Invite those who love you to give their

feedback at GreatNonprofits (a sister

• rganization of GuideStar) – used as “color

commentary” on GuideStar profiles

What can you do

• http://www.greatnonprofits.org/
• 501c3
• Newest, most different – this is all about the

people who are engaged with your

• rganization – donors, constituents,

participants, volunteers, community members

• Sister organization to GuideStar – Zagat’s for

nonprofits

GreatNonprofits: “Community-Sourced Stories”

• Provide central hub for collecting stories

about your work – and ratings

• Post the specific stories/ratings for others to

see specific details

• “Gamification” of nonprofit rankings –

badges/awards for reaching certain milestones (# or level of ratings) and opportunities to be featured – can be shared on your site & social media

What they do:

• Any nonprofit – whether you’ve chosen to

complete or “claim” your nonprofit or not

Who info about:

• Searchable list of charities by mission area or
• ther features
• Helps them better understand why others

respect / donate to / volunteer with you

• Human impact from your work – and how that

is valued from the mouths of your clients and constituents

• Let’s look at live site

How help donors:

• Claim your profile!
• Invite your inner circle to nominate and/or

provide input

• Share your participation via your site (“how to

support”)

What can you do

• If at all possible, provide more complete

information

• Invite others to weigh in
• Plan for future – identify how to measure/

manage – and start collecting and sharing results and/or impact data

So make sure you do these things…

Q&A

Also, feel free to reach out to us anytime!

Kevin LaManna: kevin@mondaylovesyou.com or 312- 971-3111 Cassie Dennis: cassie@mondaylovesyou.com or 312- 973-1112