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.

Wednesday, September 25, 2013

10 Things You Probably Don't Know About Our Data 

With nearly 7,000 charity ratings on our site, there is a ton of data and analysis available to donors! Here are ten of the stand out stats that you may not have known:
  1. With 13 4-star ratings, The Children's Aid Society has the most consecutive 4-star ratings.
  2. The charities we rate received more than $108 billion in donations in their most recent fiscal year.
  3. The charities we rate spend on average 80% of their budgets on their programs and services . Only 4% of these charities spend less than 60% on their programs.
  4. The highest compensation received by a CEO of these charities was $3.9 million; however, the median CEO compensation was a much lower figure of $125,000.
  5. We have issued more than 100 Donor Advisories
  6. More than half of the charities we rate have accumulated at least a year's worth of working capital (rainy day funds). Only 5% of the charities have less than 1 month's worth of working capital.
  7. Currently, 28% of the charities we rate have a 4-star rating and 1% have a 0-star rating.
  8. 37% of the charities we rate don't have  a donor privacy policy which means they are likely to sell, trade or share their donors' contact information.
  9. Although we only rate charities that have 501 (c ) (3) public charity status and are thus based in the U.S., for more than 1,000 of them, the scope of their work is international.
  10. The most frequent question we're asked is: "When are you going to rate charity XYZ?"

Tuesday, September 24, 2013

CEO Pay is Excessive at New Charity

When our President & CEO was told that a newly formed charity, Taylor's Gift, took in $163,000 in 2011 and paid its CEO $100,000, he said "Good heavens, more than half the money is going to just one salary? It's a very worrisome sign, indeed." Watch the video below for more on this story by WFAA.


Saturday, September 21, 2013

CN Rating System Helps in Risk Management

In materials provided to the AICPA Not-for-Profit Industry Conference, Melanie Lockwood Herman, executive director of the Nonprofit Risk Management Center, presented a list of the Top 10 Risks Facing Nonprofits. Those risks are:

  • Uncertainty regarding financial sustainability. The less cash on hand, the greater the danger when revenue is late or unreliable;
  • Ineffective fiscal and risk oversight;
  • Incomplete appreciation of fraud risk. There are three general kinds: against the nonprofit, by the nonprofit and through the nonprofit;
  • Allowing a leader/staff member/volunteer to be “above suspicion.” A casual glance through the news should be enough to put this one to rest;
  • Lack of succession planning. On average, boards spend two hours a year on CEO succession planning;
  • Ineffective departure planning and execution. Nothing lasts forever;
  • Na├»ve crisis planning. People don’t get to choose the source or cause of their next crisis;
  • Dissatisfied donors (poorly understood/managed donor relationships);
  • Unmanaged conflict on the board; and,
  • Lack of practical (well-understood) governance practices. This can cover every conceivable item, from conflict of interest through gift acceptance, and anything in between.

  • The majority of these risks can be curtailed by simply following the practices and standards set by Charity Navigator. Read more about how we rate charities here.

    Thursday, September 19, 2013

    When A Charity Calls Thursday Tip: Get it in Writing

    Get It In Writing

    Ask the person calling to send you a copy of the charity's annual report or a brochure describing its mission and accomplishments. Effective and efficient charities are proud of their accomplishments and are able to provide written materials describing their mission, program accomplishments, and financial information.

    Here is Charity Navigator's fiscal year ending 2012 annual report: http://www.charitynavigator.org/__asset__/_etc_/2012_CN_Annual_Report.pdf

    Friday, September 13, 2013

    Good News: Majority of Kids Give Time & Money to Charity

    A new survey by the United Nations Foundation and the Women’s Philanthropy
    Institute at Indiana University Lilly Family School of Philanthropy takes a closer look at charitable giving by youth.The survey followed the same group of 903 of 8 - 19 olds between 2002-2003 and again in 2007-2008 to investigate how they give to charity and ways in which parents teach children about giving. The report also examines whether differences exist by sex, age, income, and race. 

    Key findings from the report include:
    • About 90% of kids ages 8 to 19 give to charity. We know this to be true at Charity Navigator since we have kids supporting us!
    • Both girls and boys are equally likely to give money to charity.
    • Girls are somewhat more likely than boys to volunteer.
    • Talking to children about charity has a greater impact on their giving than role modeling alone.
    • Talking to children about charity is equally effective regardless of a parent’s income level or a child’s gender, race and age.

    Thursday, September 12, 2013

    When A Charity Calls Thursday Tip: Ask Where Your Donation Goes

    Ask Where Your Donation Goes

    Professional, for-profit telemarketers typically negotiate their fees ahead of time and know exactly how much of every dollar raised goes to the charity and how much stays with the telemarketer. As various state charity regulator reports confirm, companies often keep a significant of portion of each dollar raised (read our summary of those reports). Sadly, in some cases no money is returned to the charity. So, be sure to ask the person on the other end of the line to tell you how much of your donation will actually end up with the charity. By law, they must tell you.

    Friday, September 6, 2013