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.

Monday, October 31, 2016

Metric Mondays #6: Audited Financial Statements

Welcome back! Last Metric Monday, we discussed Loans to or From Related Parties. This week, we will be diving into one of our Accountability and Transparency metrics: Audited financials prepared by an independent accountant with an audit oversight committee.

This particular metric is derived from an organization's most recent Form 990. Specifically, Part XII, page 12, line 2b. Audited financial statements offer important information about the financial accountability of an organization. They are usually prepared by an independent accountant with oversight from an audit committee. This process helps bridge the gap between the management of the organization and the independent accountant, who is simply reviewing the finances and then issuing an opinion based off its findings.

We believe that this metric is a critical piece of transparency for a donor to see. In short, it will show a potential donor that this organization is having its finances reviewed with an unbiased opinion about the charity's current and future standing. Failure to comply with this metric will result in a 15 point deduction on the Accountability and Transparency scoring. Very rarely, when an organization loses credit for this metric, they explain it is a mistake on their 990 and in return, they have their audit posted on their website. The charity will receive partial credit during this scenario.  

To learn more about our Accountability & Transparency metrics, check out our Accountability & Transparency Methodology.

Friday, October 28, 2016

Treats & Charities

The end of October is often looked at as the best time of the year for many children, as it allows them a day to showcase their creativity, imaginative costumes, and most of all, their love for candy. October 31st, also known as Halloween, is a day where people of all ages can literally be whoever they want to be, even if it only lasts for 24 hours. The Halloween spirit is reflective even for those who do not decide to engage in the costumes and decorations. Countless families spend this time of year giving away candies and treats to the plethora of trick or treaters that ring their doorbells every year.

The generosity of Halloween spans much farther than just giving away candy to children for having expressive costumes, however. Many charities use this holiday to focus their efforts on methods of giving, via progressive programs and campaigns. For example, theTrick-or-Treat for UNICEF program has been an active part of our communities for 66 years, with the mission of assisting kids who need more than just candy. Every year since 1950, children who decide to participate have gone door to door with a collection box, yelling out  “Trick-or-Treat for UNICEF”, and have subsequently raised over $175 million for the U.S Fund for UNICEF since the program’s inception.  

Other charities such as Operation Gratitude have partnered with various organizations in support and execution of their annual candy donation drive, Operation Troop Treats. The candy drive functions by collecting leftover candy donations and sending them via care packages, to servicemen and women overseas.

Another charity that's increasingly affiliated with Halloween is the Food Allergy Research & Education and their Teal Pumpkin Project. The project helps raising awareness of food allergies and promotes inclusion of all trick-or-treaters.

The aforementioned are only a few of the many charities that spend their Halloweens formulating new ideas, programs, and campaigns designed to help those in need. If you are interested in supporting charities that have notable Halloween programs, please visit the following charity profiles. Last but not least, do not forget to evaluate these charities’ financial health and accountability and transparency, so that you can make the best of your donations!

Monday, October 24, 2016

United Nations Day

Since 1948, every October 24th has annually been recognized as United Nations Day, which celebrates the efforts and achievements of the UN. The date is significant because of the UN’s entry into force within the UN Charter, in 1945. The United Nations is an international organization that currently consists of 193 member states, guided by the principles listed in their UN Charter. This UN Charter formally outlines the organization’s purpose, much of which gives them the power to take initiative on causes that challenge the well being of humanity. These calls to action are often in response to issues such as: sustainable development, peace and security, climate change, terrorism, human rights, governance, food production, and more.

All member states work together to recognize the importance that charity plays within our current and future society. The United Nations’ Secretary-General Ban Ki-moon is quoted as saying the following:

"Charity is one of the best investments we can make in our common future.  On this day of International Charity, I call on people everywhere to be part of our 15-year partnership for humanity, and to help make the Sustainable Development Goals a reality for all".

Of course today is not ‘International Day of Charity’, as that comes every year on September 5th. However, it does show the United Nations commitment to highlighting the overall importance of charity for those underprivileged, in poverty, suffering from natural disasters, and the infinite number of hardships faced around our world.

Please keep in mind, that before you make a decision to donate to any specific charities, that you analyze them on a number of levels. First, you should visit their charity profile, where you can examine the charity’s financial health and their accountability and transparency. If you are interested in assisting with programs directly benefiting or related to the UN, we suggest that you check out the United Nations Foundation, a 4-star charity designed to help solve global issues.

Wednesday, October 19, 2016

National Bullying Prevention Awareness Month

Every October, schools, organizations, celebrities, and people from all walks of life come together to observe it as National Bullying Prevention Awareness Month. National Bullying Prevention Month is a nationwide campaign founded in 2006 by PACER's National Bullying Prevention Center. The goal of this campaign is to unite and encourage communities to work together to stop bullying and cyber-bullying by increasing awareness of the prevalence and impact of bullying on all children of all ages.

Here are some general statistics about bullying:

  • One out of every four students report being bullied throughout the school year
  • 64 percent of children who were bullied did not report it
  • School-based bullying prevention programs decrease bullying by 25%
  • 19.6% of high school students in the US report being bullied at school in the past year & 14.8% reported being bullied online.

These alarming statistics highlight the national call to action that is necessary to help end bullying across the world. PACER’s National Bullying Prevention Center has also created initiatives to help prevent and raise awareness for bullying, such as Unity Day on October 16th. On this day, they encourage those who care about safe and supportive schools and communities to wear orange. If you would like to learn more about possible ways that you, your school, or your community can get involved in the national prevention of bullying, then please visit PACER, Stop Bullying, or Stomp Out Bullying for more details. You may also want to consider a donation to other charities, such as The Trevor Project, GLSEN and The Jed Foundation which also deal with the problem of bullying.

Monday, October 17, 2016

Domestic Violence Awareness Month

October has been declared Domestic Violence Awareness Month by the National Network to End Domestic Violence. Domestic violence is defined as the willful intimidation, physical assault, battery, sexual assault, and/or other abusive behavior as part of a systematic pattern of power and control perpetrated by one intimate partner against another. Regardless of economic or community status, religious beliefs, sexual orientation, gender, or any other method of classification, domestic violence is an epidemic that affects people all over the world. The emotional and physical trauma associated with domestic violence is powerful enough to scar a person, and a family for the duration of a lifetime.

Domestic abuse can rear its ugly head in a number of ways, and contrary to popular belief, it is not confined to just physically abusive behavior. Some of the abusive tendencies that have the potential to lead to domestic violence include:

  • Putting down your partner via methods of embarrassment, inferiority, etc.
  • Creating a controlling environment within the household
  • Being overly possessive of the victim’s dressing habits, spending habits, eating habits, etc.

It is important to understand the impact that domestic violence has on everyone involved in the situation. Below, are some astonishing statistics about domestic violence:
  • 1 in 3 women, and 1 in 4 men, have been victims of some sort of physical violence by an intimate partner within their lifetime.
  • On average, over 10 million men and women per year in the United States, are physically abused by an intimate partner.
  • On average, over 20,000 phone calls are placed to domestic violence hotlines nationwide.

The above statistics shed light on what is a worldwide epidemic that affects so many of our friends, families, colleagues, and strangers. It is time to Take A Stand against the injustice, mistreatment, and pain associated with this awful epidemic of domestic violence. If you are in danger and would like to get help, please do not hesitate to call 911. Also, for anonymous and confidential help 24/7, call The National Domestic Violence Hotline at 1.800.799.SAFE (7233) 1.800.787.3224 (TTY).

If you would like to donate to a charity that benefits the cause of preventing and raising awareness for domestic violence, please visit the profiles of the 3 and 4 star rated charities in which we have put together below, or use our advanced search to look for a similar charity in your area. Be sure to review the charity’s financial ratings, accountability, and transparency, then if you choose, easily donate to the causes you care about, through our Giving Basket.

Metric Mondays #5: Loans to or from Related Parities

Last Metric Monday, we explored Administrative Expense Percentage. This time around, we’ll be zeroing in on our Loans to or From Related Parties metric.

For starters, making loans to related parties, like staff and board members, is not an industry norm. When a charity gives a loan to a related party, it is taking away funds from mission related expenses for an indefinite period of time. Moreover, giving loans to related parties can lead to real and perceived conflict of interest problems. Say a board member receives a $100,000 loan from the charity whose board they sit on. A month later, this same board member votes in favor of cutting program expense by 50%. Shrinking program size can be a healthy, strategic decision that inevitably benefits the charity, but can we be sure that this board member is thinking in the charity’s best interest versus their own?

The IRS is so concerned with this practice that it requires charities to report on their Forms 990 any loans they’ve given to or received from related parties (current and former officers, directors, trustees, key employees, and other "disqualified persons”), to detail how much the loans were for, and how much is currently owed on the loan.  Influenced by the IRS and sector standards, some state laws go so far as to prohibit loans to board members and officers. And while it's perfectly legal for employees and trustees to make loans to charities, this practice can result in conflict of interest problems for the charity, as there’s potential for a board member who loaned money to a charity to have greater influence on board happenings.

On top of all this, making or receiving loans suggests that the organization isn’t financially secure. If they were, they likely wouldn’t need to borrow money in the first place. To learn more about our Accountability & Transparency metrics, check out our Methodology.

Thursday, October 13, 2016

2016 Charity CEO Compensation Study

Charity Navigator’s 2016 Charity CEO Compensation Study is designed to serve as a tool for board members seeking benchmarking data and for donors who want to gain a better understanding of nonprofit compensation practices. The guide will help answer questions such as:
  • Among the charities rated by Charity Navigator, just how much does the typical CEO earn?
  • What was the average pay increase among those CEOs?
  • Does CEO pay vary by location, mission and budget? 

Wednesday, October 12, 2016

Breast Cancer Awareness Month & Informed Giving

With so many products emblazoned with pink ribbons, you probably already know that October is Breast Cancer Awareness month. What you may not know is that there are thousands of breast cancer charities vying for your attention and donations. Here are some resources to help you navigate the plethora of opportunities to support this cause: 

Friday, October 7, 2016

More than $7 Million Donated!

Join the nearly 15,500 donors who rely on the security of our Giving Basket to support the charities that they love. 

Say No To Solicitors

Here at Charity Navigator, we understand the importance of choosing to donate your hard earned dollars to causes in which you are passionate about. In 2015, charitable giving totaled approximately $373 billion, two thirds of which was accredited to individual giving. However, with each of the past six years reflecting increases in total charitable giving, this unfortunately presents more opportunity for scammers to attempt to solicit funds from donors.

Often times, scammers are looking to steal not just your money, but credit card, and personal information. We have outlined a number of ways to protect yourself from online scams, but those are only some of the ways to shield your valuable donations from unwarranted solicitations. We also heavily recommend that donors refrain from giving in person, or over the phone.

Just recently in Oklahoma City, a local animal rescue organization has warned residents about potentially bogus group soliciting door-to-door. Also, beware of phone calls from anyone claiming to represent “organizations” raising funds for various causes. These solicitors may request that you donate to them, telling you that they will benefit a local organization. We recommend that you do not entertain these phone calls, and that you go about your due diligence before donating to anyone.

Protecting yourself from scams and solicitors, whether it be online, via telephone, by mail, or in person, requires a great deal of knowledge, caution, and awareness. It is imperative that you spend your time researching any organization in which you plan to donate. Making certain that any charity receiving your donations is credible from an organizational, and financial standpoint, will assist you in delegating your funds to the best of your interest.

Thursday, October 6, 2016

Hurricane Matthew: Find Out How You Can Help

"According to the United Nations, the disaster has affected 350,000 Haitians and left the country facing its worst humanitarian crisis since the devastating earthquake six years ago." ~CNN

Tuesday, October 4, 2016

Tuesday's Giving Tip: Cause Related Marketing

With October being National Breast Cancer Awareness Month, the motivation for companies to jump aboard various “pink” campaigns designed to benefit breast cancer, are higher than ever. You should know, however, that these campaigns last for much longer than just the month of October. Many companies have made it a point to affiliate themselves with charities for cause related marketing efforts. Some embark on this mission in hopes that it could provide increase in sales revenue through consumer purchasing of products and services claiming to benefit charity. In addition to this, companies have increased their corporate citizenship through marketing products with social and environmental benefits, understanding that it assists brand image and perception, which subsequently, increases a company’s potential profitability.

So with the increase in company-charity partnerships, how do you know if their cause related marketing is worth your hard earned dollar? You can begin by asking yourself these questions:

  • Is the relationship between the charity and the for-profit, authentic?

  • Is the packaging clear and transparent?

  • Is this product/service something that you really need?

  • How does the product/service stack up to competitors’ offerings?

  • Is the charity affiliated with the product high-performing and one that matches your philanthropic goals?

You can find more information on this topic via Charity Navigator’s site, the charity’s personal site, or through direct contact with the charity. It is important to remember that this method of philanthropy shouldn’t  be a substitute for donating to a creditable, purpose driven charity. As important as cause related marketing efforts are for all sides involved, the important thing is to remember that all efforts are made with the bigger picture of helping those in need.

Monday, October 3, 2016

Our New Mobile Friendly Site and Improved Search

At Charity Navigator, we work hard so that donors don’t have to. That is to say, we want to make it easier for donors to quickly find charities that they can trust and support. And that’s why we’ve just made improvements to our site’s search functionality and launched a new, mobile friendly site.

Metric Mondays #4: Administrative Expense Percentage

Last week, we focused on posting financial documents online. Today’s Metric Monday will address Administrative Expense Percentage. 

Administrative (or simply “Admin”) Expense Percentage looks at the amount of money spent on management and general expenses reported on an organization’s Form 990 in relation to its total expenses. Any cost that is not allocated to actual program work or to fundraising activities is allocated here. It is important to note that this total does not consist of ALL employee salaries, as a significant portion of a staff member’s salary may be allocated to program, if the employee’s work is mission-related. For example, an administrative assistant’s salary at an animal shelter may be an admin cost, while the salary of a veterinarian at the same shelter may largely be allocated as program.

When looking at admin expense percentage, we check to make sure an organization’s admin allocation is in line with other organizations performing similar types of work. For most organizations, anything less than 15% spent on admin is considered excellent and is worth full credit for this metric. By keeping admin expenses in check, the organization demonstrates that it efficiently converts donor dollars into mission.

To learn more about admin expense percentage, please see our methodology.

Saturday, October 1, 2016

Breast Cancer Awareness Month

Every October, the narrative of the month centers around increasing awareness for the turbulent disease that we know as breast cancer. Literally, thousands of breast cancer charities spend the month educating people and inspiring hope within the millions of women worldwide who suffer from the disease on a daily basis. Various organizations and companies show their support, provide assistance, and raise awareness for the disease during the month of October.

With all the initiatives, programs, and funds raised in support of Breast Cancer Awareness Month, it should be understood that the fight against Breast Cancer is not delegated to strictly one month. Year round,charities raise funds for the prevention, treatment, and cure of the all-too-often fatal disease. In fact, these charities raise  around $6 billion annually for for breast cancer awareness and research.

Here at Charity Navigator, our interest is solely in guiding intelligent giving for the causes in which we all deeply care for. Of the funds donated to breast cancer awareness, it is vital that you understand who is receiving your trust, time, and service. If you are interested in donating to charities pursuing the mission of curing and preventing breast cancer, please be sure to visit our Hot Topic. Here we go into detail about the charities who efficiently use donations to support the treatment and prevention of breast cancer, but also those who do not. From there, you can click on a charity’s profile link, evaluate their financials, accountability and transparency, then easily choose to donate to them via our Giving Basket.