Welcome to Charity Navigator's Blog!

The team from Charity Navigator, the nation's largest independent charity evaluator and leading donor advocate, shares their thoughts on emerging nonprofit-sector issues and offers tips to better inform your intelligent giving decisions.

Friday, February 27, 2009

The Obama Budget and Charitable Tax Deductions

President Obama's recently released 2010 budget has created some concern among the non-profit community. The budget scales back the tax deduction those earning more than $250,000 can take for their charitable giving from 33-35% to around 28% (See our Giving Calculator).

This could be unsettling news for charities who have already been hard hit due to the current economic conditions. Some believe that the drop in the tax deduction rate coupled with an increase in the top income tax bracket will ultimately lead to less charitable contributions. Others argue that the tax deduction is ultimately a small reason why many give to charity. And that even with the lowered tax deduction they will still give as they have in the past.

The data that we have seen over the years has shown a big spike in donations through our site during the last several days of the year, especially on December 31st which of course is the last day to make a qualified tax deductible charitable contribution (see our Tax Benefits of Giving article). This data indicates to us that the tax benefits really do motivate people to donate.

We would like to know your thoughts on how the change in tax benefits may lead to a change in your charitable contributions. Would the decrease in the tax benefits affect your giving?

Update: Small Charities Must File

A few months back we reported that the Pension Protection Act of 2006 set forth a new requirement that small charities must file a 990-N in order to maintain their tax-exempt status. According to the IRS, as many as half a million nonprofits have not filed. If these charities fail to remedy the situation, then they stand to lose their tax-exempt status in 2010.

Thursday, February 26, 2009

Twitter Users Raise Money for Charity: Water

In these tough economic times, charities have been forced to be creative in their fundraising strategies. Social networking sites such as Facebook, You Tube, and Twitter are often mentioned as effective strategies for broadening donor base and reaching new audiences. Recently, Charity: Water, a non-profit working to provide safe, accessible drinking water to developing countries used Twitter to raise more than a quarter of a million dollars for their cause. (Founded in 2006, Charity: Water has not been operating long enough to meet Charity Navigator’s criteria, so we cannot evaluate them at this time.)

Twestival was organized entirely by volunteers via Twitter. It brought Twitter users together in 175 cities around the world, giving them a chance to socialize off-line and in-person while also raising money for charity. So far the event has raised over $250,000 – still short of the ambitious $1 million goal, but with only 60% of participating cities having tallied their contributions, that figure is expected to rise.

Wednesday, February 25, 2009

Just In From Moscow

Check out this video of Charity Navigator's president & CEO, Ken Berger, talking about the importance of trust, accountability and transparency in the nonprofit sector at a conference in Moscow.

Tuesday, February 24, 2009

Help the Wildlife Affected by the Wildfires

The Australian wildfires took lives, damaged property and destroyed homes. The fires also took the lives of the wildlife that lives in the brush. Charities like the International Fund for Animal Welfare are working to help rescue and care for the animals that survived the fires.

Monday, February 23, 2009

Arts Charities Turn to Online Techniques

The Chronicle of Philanthropy recently reported that arts groups are focusing a larger portion of their resources on internet marketing. Many of the museums, symphonies and operas we evaluate are using online tools such as blogs, Facebook, and Twitter to spread the word about their organizations. Still other charities take this one step further, for example the Museum of Fine Arts, Boston, which offers online tours of parts of its collection. And the Brooklyn Museum has developed 1stfans, a socially networked museum membership designed to appeal to a less traditional membership audience. An even more unusual initiative is the Wikipedia Loves Art contest, a scavenger hunt and photography contest coordinated by the Brooklyn Museum.

In a time when traditional marketing activities are too expensive, and contributions are down significantly, we should applaud these charities for their innovation and use of available resources. Perhaps you’ll consider rewarding one of these organizations with a donation, or if you’re an arts lover, use our site to find another highly rated arts charity to support.

Friday, February 20, 2009

Donating Airline Tickets Is Not As Easy As You May Think

It seems like a win – win situation: You are unable to go on a previously scheduled trip, and have the airline tickets you purchased sitting in your desk drawer. What a perfect opportunity to donate those tickets to a charitable organization. However, airline regulations do not allow for the transfer of tickets; only airline miles can be donated to a charitable organization. Scott McCartney explains in this Wall Street Journal article why the restrictions are in place. Until there is some way in which the estimated $2 billion in nonrefundable tickets that expire on an annual basis can be put to some good use, we suggest instead donating the airline miles you acquired with the purchase of the tickets to a Make-A-Wish Foundation, or any highly rated organization that accepts them.

Thursday, February 19, 2009

A Donor's Wish List

We recently received the following email from a Charity Navigator user, which mirrors many of the comments posted on our site. We’re sharing it here, as per the donor’s request, that we remind charities to respectfully promote their good works to potential donors rather than harass them with endless and expensive mailings.
“I wish you would recommend to all charities that they should include two opt-outs on their donation requests.
1. Do Not Send Gifts - It infuriates me to get labels, T-shirts, and other offers if I send more than x amount. I give to several charities and it really makes me uncomfortable that they are wasting my money on sending me items that I do not want. So I should be able to check an opt-out box. Particularly obnoxious are the ones that send nickels, to put those together must be very expensive. I have even had ones with a dollar bill inside.
2. Do Not Send Multiple Appeals - I am inundated with charitable mailings. I probably get a minimum of ten a day. This is ridiculous and a real waste of money. Charities should send no more than three, and if there’s no response, then they should take you off the list. I have written to a couple of charities asking to be removed from their list, but they still mail.
I think there are many donors who do not want their money spent on useless gifts or incessant mailings from charities they do not respond to.”

Wednesday, February 18, 2009

What the Stimulus Plan Means for Nonprofits

As we've mentioned in previous blog posts, there has been some contention over which items would be included in an economic stimulus plan for nonprofits. The plan signed by President Obama includes:

  • $50 million for the creation of a program to help nonprofits provide aid to those severely affected by the economic crisis,
  • $50 million for the National Endowment for the Arts, to protect arts-related jobs in the nonprofit sector,
  • $200 million for AmeriCorps, for operating expenses and to pay education grants to members who have completed their terms of service,
  • $2 billion for the Neighborhood Stabilization Program to help nonprofits restore foreclosed properties,
  • $2 billion to support community health centers,
  • $120 million to encourage seniors to engage in community service,
  • $100 million for the Emergency Food and Shelter Program, and
  • $50 million for the YouthBuild Program to help nonprofits provide construction training to young people.
Nonprofit groups receiving grants under these provisions are expected to have clear goals and engage in outcome measurement.

Australian Wildfires

The wildfire disaster in Australia has taken the lives of about 200 people. The fires have destroyed more than 1,800 homes and scorched more than 1,500 square miles. The Associated Press reports that “the current death toll already makes the disaster one of the world's deadliest involving wildfires in modern times”.

Charities in Australia have raised more than $60 million dollars in donations but more help is needed. Lions Clubs International Foundation is one of the charities here in the US raising funds to help victims of the wildfires.

Electrolux Supports Ovarian Cancer Research with Digital Fundraiser

In a creative, interactive on-line campaign, appliance manufacturer Electrolux has teamed up with the Ovarian Cancer Research Fund to deliver electronic cupcakes for a good cause. Electrolux has committed $500,000 to the charity, and a new Facebook application is attracting individuals to join the donation process. Users can “bake” a cupcake – complete with cake flavor, frosting, and various topping choices - and send it to a recipient of their choice. Each cupcake sent will direct one dollar to the Ovarian Cancer Research Fund, up to $30,000. Cause marketing has been particularly successful with breast cancer charities. This latest effort is a creative way to involve the on-line community, gaining awareness for ovarian cancer as well as boosting brand image for Electrolux. You can send your own free cupcake here.

Tuesday, February 17, 2009

Update: Arts Funding Included In Stimulus Bill

We previously mentioned the controversy over the possible inclusion of $50 million in the stimulus bill for the National Endowment for the Arts. The version of the bill that passed on Friday did include the provision.

Sham Appeal

Brookfield, Conn. Police Chief, Dan Faustino, says his department is in no way connected with the Virginia based, 1-star charity, Law Enforcement Legal Defense Fund, that is soliciting local residents. The Chief calls the charity's appeal letter a 'sham.'

Ken's Commentary

Back in December 2008, I made it clear that Charity Navigator intends, over time, to report on charity's outcomes (see blog entry - A Measure of Outcome). As a first step down that road, we have been on a "listening tour" that includes researching existing tools that may help us in developing our system.

Visit Ken’s blog to read the rest of his most recent post, "A Scary Finding on Outcome Measurement."

View the Stories of Those Hurt By the Financial Meltdown

Consumer Reports has published video interviews with people who may lose their homes. If you are troubled by this issue, then visit our site for a list of highly-rated charities that, with your support, may be able to help those facing foreclosure.

Saturday, February 14, 2009

Friday, February 13, 2009

This Week's #1 FAQ

Our users must be gearing up to pay their taxes, because many have contacted us wanting to know how they can get a report on their giving history.

As you may know, we’ve partnered with Network for Good to provide the convenience of online giving enabling donors to research their charitable options and then make a gift on our site. But Charity Navigator does not have access to your Network for Good account. So if you gave in 2008 through our site, you’ll need to visit Network for Good and log in to your account to access your giving records.

If you are looking for information about the tax implications of giving, then visit our site here and here. You may also find it helpful to review the tips we published last year on this topic.

Wednesday, February 11, 2009

Non-Profit CEO Pay and Government Funding

President Obama has decided to set restrictions on compensation for the top executives at certain for-profit institutions who receive financial assistance from the government. The cap has been set at $500,000. With this new policy, we decided to take a look at CEO compensation for non-profits that accept government funding.

Compensation for the CEOs of non-profits has always been a topic of controversy. Some believe compensation must be competitive with the for-profit sector to retain talent; while others believe that extremely high salaries are downright offensive.

Of the charities on our site, there are 93 charities that accept government funding and also pay their CEO $500,000 or more. These organizations include: Boys & Girls Clubs of America, American Red Cross (recipient of a $100 million government bailout), Easter Seals, March of Dimes, and the American Cancer Society. Of these 93 charities, 33 accept more than $100 million in government funding and pay their CEO $500,000 or more. These organizations include: Stanford University, Harvard University, The New York Public Library, Dana-Farber Cancer Institute and Massachusetts Institute of Technology.

Tuesday, February 10, 2009

Foundation Center Report Sees Growth for Charities Focusing on Animals and the Environment

Foundation funding for charities focused on the environment and animal welfare saw double digit growth in 2007 according to a comprehensive report released by our partner, the Foundation Center. This is great news for a relatively small sector of non-profits: environment and animal charities received only 7% of all foundation support in 2007.

Overall giving in 2007 across ten major fields saw a 13% increase over 2006, but the environment and animal sector saw 28% growth, more than double the overall growth rate. As we’ve noted before, the arts charities are experiencing harder times then other non-profit organizations, and the report confirmed our observation. Foundation funding for these organizations fell 1.5% in 2007. Other highlights from the report can be found here, and you can learn about Charity Navigator’s collaboration with the Foundation Center here.

Monday, February 9, 2009

Ken's Commentary

Charities have gotten a bad reputation thanks to the scandals at some of the larger charitable institutions. So what qualities of a charity can inspire your trust?

Visit Ken’s blog to read the rest of his most recent post, "When Can Donors Trust a Charity?"

Highs and Lows of Higher Education

In a previous blog we discussed the increasing size of college endowments and the increasing cost of education for students. In a recent evaluation of endowments for the past year, the value of university endowments has fallen about 23% on average. It is the largest drop in the value of endowments since the mid 70’s. In fact, with the economic crisis it should come as no surprise that endowments too have felt the impact.

Senate Finance Committee chairman Chuck Grassley, R-Iowa has once again commented on the issue stating that colleges should not use the volatility of the current economic climate to raise tuition or decrease financial aid.

Unfortunately, students are already feeling the impacts of the economic downturn. In a recent article in The New York Times a study revealed that students are spending more on college education but the schools are spending less on their students. Administration costs have increased and tuition have increased but the schools are cutting their budgets for instruction. The study was conducted by Delta Project Reports a nonprofit organization that is working to increase college affordability.

With high costs of education and both universities and students trying to find money to make ends meet, it will be interesting to see the complete effects of the current economic crisis.

Friday, February 6, 2009

Debate Over Arts Funding In Stimulus Bill

The American Recovery & Reinvestment Act of 2009 (AKA Stimulus Bill), includes $50 million in spending for the National Endowment for the Arts. As the Boston Globe details, there is much controversy surrounding this provision.

The naysayers say:

"We have real people out of work right now and putting $50 million in the NEA and pretending that's going to save jobs as opposed to putting $50 million in a road project is disingenuous," - Representative Jack Kingston from Georgia

The advocates say:

"Hell, they've got to eat just like other people." - Roosevelt aide Harry Hopkins said when he was asked why President Franklin D. Roosevelt supported the hiring artists as part of the New Deal

"As far as I've heard, nothing has changed about the dietary needs of artists." - Dana Gioia, past NEA chairman

Whichever side of the fence you land on, it is hard to deny that the situation right now, as in previous recessions, is pretty bleak for cultural charities. It seems like everyday another museum or cultural institution announces layoffs or programmatic cuts. In fact, I just got done discussing Pennsylvania Governor Ed Rendell’s proposed cuts in state funding for cultural groups with a reporter from the Pittsburgh Post-Gazette. I told the reporter how hard it can be for elected officials to make a strong case for supporting the arts when so many of their constituents facing financial troubles of their own.

If you care about the arts, then consider showing your support by patronizing your local cultural institution this weekend. Alternatively, you may want to take up Americans for the Artscall to action or make a donation to a cultural charity.

You made a pledge, but can no longer afford to pay it . . . now what?

While the scenario described above may want you to run and hide, or not answer the phone when the charitable organization in question calls, this is not the best course of action, either for you or the charity. While it may be embarrassing to have to come clean and explain your financial situation, you are not alone. Instead of thinking of you negatively, the charity will be very grateful to know what they can expect from you, and will be willing to negotiate alternative ways to fulfill your pledge. Shelly Banjo, of the Wall Street Journal, wrote a great article in that newspaper regarding this situation. In it, she gives some ways of dealing with the situation that will not only allow the charity to plan for the future, but at the same time, shows the organization that you are still committed to the mission. Because of dealing with this situation head on, you will be viewed with respect; reputation and ethics in tact.
Banjo suggests donors work with the charity to see if the pledge can be earmarked for more pressing issues, or if payments can be rescheduled. Alternatively, maybe a bequest or charitable gift annuity are options that can be beneficial to both you and the charity. If you are truly strapped, and are in no way able to contribute financially to the organization, offer to help the charity by volunteering.
As always, if you are considering supporting a charitable organization, now, even more than ever, it is important for your dollars to stretch as far as possible. One way of making sure that happens, is by starting your research on Charity Navigator’s website.

Thursday, February 5, 2009

Hobbs Foundation and Charity Navigator Partner to Bring More Unbiased Data to Donors

Several years back, while considering charities for grants, the Hobbs Foundation, known for its support of charities that benefit children in need within the state of Florida, wanted access to the type of objective, financial evaluations provided by Charity Navigator. Despite the fact that Charity Navigator rates thousands of the most prominent charities in the United States, we did not, however, evaluate the financial health of many charities that were the focus of foundation’s philanthropic activities. The Hobbs Foundation therefore decided to provide funding to support Charity Navigator’s evaluation of several Tampa children’s homes.

Realizing that the evaluations had the potential to assist additional grantmakers and donors, the Foundation decided to also fund evaluations for the better-known children’s charities in the south. This month, thanks to ongoing support from the Hobbs Foundation, we’ve published 20 new ratings. In all, since our partnership began in 2004, the Hobbs Foundation has funded the analysis of nearly 100 charities. We greatly appreciate Hobbs Foundation’s commitment to responsible and informed philanthropy and thank them for their continued support of our work to guide intelligent giving.

If you are interested in partnering with us to provide additional charity evaluations for your community or for a specific charitable cause, we hope you will not hesitate to contact us.

Wednesday, February 4, 2009

Independent Research Confirms Charity Navigator Ratings Influence Donor Behavior

Today’s Wisconsin Capital Times has an article about the Madison Children’s Museum. Reporter Pat Schneider takes a close at the charity’s 1-star rating and how it may impact the organization’s ability to raise enough funds to complete its expansion plans. While the charity dismisses the possibility that its donors will be influenced by its low rating, Schneider cites new research by University of Wisconsin-Milwaukee assistant professor Daniel Neely that shows changes in a charity’s Charity Navigator rating correlate to a change in contributions. More specifically, “…an examination of the 990 forms and Charity Navigator ratings of 405 charities for three-year periods between 2002 and 2006 found a "very robust" association between a change in rating and donor behavior the following year. Thirty-one percent of organizations had no change in rating. For those that had a one-star change in rating, they experienced an average of a 39 percent change in donations correlated either up or down.”

The Firefighters Are Still Calling

As we have mentioned before, when charities call, you are better of putting the phone down, and, if you believe in the mission of the organization, donate directly to them. There is even more concern when fire service organizations call. As we have seen in previous blog entries, firefighter charities are notorious for using professional fundraising companies to solicit funds on their behalf, with usually a very large percentage of donations going to the professional fundraiser instead of the charity itself. A newspaper article in today’s Hartford Courant explains that this is happening to yet another 0 star charity. The Association for Firefighters and Paramedics is under investigation by Attorney General Richard Blumenthal for suspect fundraising tactics. The AG’s office is unsure whether the organization is even aware that calls are being made in Connecticut. For donors having encounters with professional fundraisers, please hang up, and if you are so inclined, use our tips to ensure the organization of your choice receives all your money, without a percentage being directed elsewhere.

Find Us On Facebook and Twitter

Join Charity Navigator on Facebook and follow our CEO’s daily musings on Twitter under the name kenscommentary.

Tuesday, February 3, 2009

A Simple Decent Place to Lay Their Heads: Millard Fuller, 1935-2009

Millard Fuller, who co-founded Habitat for Humanity International along with his wife Linda in 1976 and later the Fuller Center for Housing in 2005, passed away early Tuesday morning. He was 74. Mr. Fuller dedicated his life to providing simple, decent homes for over 300,000 families in exchange for sweat equity and interest free mortgage payments. Fuller's life's work was founded on his belief that, "everyone who gets sleepy at night should have a simple decent place to lay their heads, on terms they can afford to pay." If you would like to honor the life of Millard Fuller through a contribution to Habitat for Humanity, you can review a list of highly-rated affiliates here.

Mega Donors' Charity Picks

Last week, the Chronicle of Philanthropy released a report on the top 50 donors of 2008. Together, these donors pledge or gave $15.5 billion, which is more than twice what the most generous donors gave in 2007.

Although many of these donors gave substantial gifts to their own foundations, below is a sampling of gifts made to charities rated by Charity Navigator:

Monday, February 2, 2009

Ken's Commentary

This past week I was asked to speak before a group of charity leaders on what they should be doing to weather the tough economic times. My advice was clustered into two categories - margin and...

Visit Ken’s blog to read the rest of his most recent post, "Advice to Charities in Hard Times."

February Update

Yesterday, while most Americans were entertained by Super Bowl XLIII (or the commercials aired during it), we were busy updating the information on our website. We published 471 updated ratings, 22 new charity evaluations, and more new top 10 lists.

Of the 22 new charity ratings, 20 were made possible through ongoing support from the Hobbs Foundation.

Sunday, February 1, 2009

PETA Super Bowl Commercial

A PETA (People for the Ethical Treatment of Animals) ad submitted to NBC for airing during the Super Bowl was rejected due to its racy nature. Whether PETA ever really thought the ad would be aired or not, they have definitely brought attention to their organization and their promotion of vegetarianism. So whether you plan to eat hot wings or veggies while you watch the Super Bowl, we want to know what you think about this story.