Right on the Money: Show Donors Your Impact
Charity Navigator, the nation’s largest rater of nonprofit organizations, has long rated charities based on their financial health, accountability and transparency. Soon, an organization’s score will also include the impact its work has had on its overall mission.
The change is meant to benefit people who make donations to charities, says Sandra Miniutti, vice president of marketing and chief financial officer of Charity Navigator.
“All donors want to know the impact of their contribution,” Miniutti says. “This will help them understand what the charity actually spends its money on.”
Transparency for All
While Charity Navigator only rates charities with budgets of $1 million or more, all groups seeking donations from the public should consider making this level of transparency a key part of operations.
- Alignment of mission, solicitation and resources: Whether the charity’s funding solicitation materials are in line with how it allocates its resources.
- Published evaluation reports: Whether the charity is publishing regular evaluation reports that explain the results of a majority of their programs.
- Use of feedback from the people it serves: How well a charity collects and publishes feedback from its clients and others who benefit from its services.
The results won’t be included in scores until 2016, but there’s nothing to stop groups from making sure this information is visible on their websites sooner.
Sara Brown, CEO of The National Campaign to End Teen Pregnancy, recognizes that the idea of evaluating impact isn’t a new one.
“It’s good to challenge people to think about these questions,” Brown said. “It’s not demanding a clean number, but I think everyone’s saying, you have to think about this. You have to come up with something. It doesn’t have to be perfect.”
“Whether it’s for your board or your donors, whatever the case, you should collect and share information on your impact,” she said. “There’s going to be a growing demand for this type of data.”
Most charities aren’t measuring and reporting their impact publicly, but by instituting this new measure, Miniutti says the hope is that they’ll start to. Over the next few years, Charity Navigator staff will contact charities and allow them to send in information for consideration.
“But in the future, we want to see it on their website,” Miniutti said.
Specifics about how this measurement will impact a group’s overall score are still being decided. There may be different benchmarks for charities of different sizes or different types, Miniutti says. For example, a shelter directly providing a service may be scored differently than an arts organization.