As a recent article points out, the IRS (the agency charged with nonprofit oversight at the federal level) falls way short on charitable oversight due to limited resources. Although the sector continues to grow (filings of Form 990s grew 5% from 2011 to 2013), the rate of audits dropped to 0.71% of charities in 2013 (down from 0.81% in 2011).
What does this mean for donors? It tells us that just because a group is a bona fide nonprofit doesn't mean you can assume it is effective, ethical or efficient. Donors MUST do their homework and vet charities before giving. Charity Navigator's easy to understand 4-star charity ratings are designed to help donors make informed choices about the charities they support. Our goal is to enable donors to quickly do their due diligence so that they have the peace of mind of knowing their hard-earned money is helping great charities carry out their worthy missions.