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.”

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