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Tuesday, March 29, 2022

DEI in the Community & Culture Beacon: Donor Perspectives

For almost twenty years, Charity Navigator has provided donors with ratings to guide their giving toward the most effective and impactful nonprofits. With the launch of the Encompass Rating System, our ratings have become deeper with more areas of performance explored. Earlier this month, we began scoring nonprofits on their diversity, equity, and inclusion (DEI) practices

How did we get here? To understand how these beacons guide donor and nonprofit behavior, we surveyed relevant stakeholders. The results of the initial surveys have shaped the starting point for the Encompass Rating System and provide a valuable baseline for donor and nonprofit perspectives. What does that mean for the Community & Culture beacon? 

In January 2022, a survey of 1,311 donors and 243 nonprofit representatives was conducted to investigate perspectives on DEI. The following are the key takeaways from the survey that will be used to inform the continued evolution of the Culture & Community beacon.

DEI is internal and external
Donors placed similar importance on “Creating a culture of inclusion and belonging for diverse staff at a charity” and “Helping a nonprofit achieve its mission.”



Actions speak louder than words
While literature suggests that shifting mindsets and values is the key first step toward DEI, donors and nonprofits agree that equitable practices and organizational culture are the two most important factors when considering the role that DEI plays in organizations, and shared language and analysis are the least important. Nonprofits will have to walk the walk to impress interested stakeholders. 




Our planned next steps: After a one-year runway, in March 2023, we will evaluate DEI practices and create a methodology that will enable us to assess the effectiveness of practices.

DEI education is needed
Based on our survey data, 78% of nonprofit representatives agree that it is “important” to “very important” to have effective DEI practices to enable a charity to achieve its mission, but only 62% of donors hold the same belief. 



Additionally, about 18% of donors are “not sure” why a nonprofit would take steps to be more diverse, equitable, and inclusive, and a small number of participants (less than 5% of donors surveyed) indicated resistance to incorporating DEI into nonprofits at all. 

Our planned next steps: This gap between the opinions of donors and nonprofits presents a clear need for DEI education for donors, who aren’t yet aligned with the sector in this area. Over the next year, we will highlight nonprofits with strong DEI practices to help donors understand why DEI is essential and how it helps nonprofits improve their ability to deliver on their mission. This education will take the form of informational webinars and written materials. 

We also understand that not everyone will recognize the importance of our DEI assessment. Our goal is to provide a vast array of information and resources to help donors find and support organizations that align with their passions and values.

Keep the mission in mind
The mission of an organization was identified by almost 29% of donors as the factor most likely to prevent a charity from successfully adopting DEI practices. In contrast to donors, 32% of nonprofit representatives believe implementing DEI practices helps a nonprofit achieve its mission. 

Our planned next steps: This may suggest an opportunity to adapt ratings to account for the mission of an organization and to share stories of nonprofits with equity-focused missions or nonprofits that have adapted DEI best practices. Further inquiry will be conducted. 

As we iterate upon our DEI ratings, we will continue to seek feedback and make optimizations to how we present donors with ratings and information to balance simplicity and detail that best suits donors’ needs. We also plan to expand search functionality to permit users to easily discover, research, and support nonprofits dedicated to underserved communities. 

Surveys are one key tool that Charity Navigator will continue to deploy as the Encompass Rating System evolves in order to gauge impact and guide future iterations. Join our mailing list to receive future surveys and help shape the future of the Encompass Rating System.


About the authors: Bilal Taylor is the VP of Community and Culture at Charity Navigator. Julia Bieniek is the Ratings Program Manager at Charity Navigator.

Please read the full blog series herehere, and here.

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