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Tuesday, May 24, 2022

Our Journey Toward a Single, Unified Rating System


Over the past five years, the use of Charity Navigator has increased by more than 50%. More than 11 million donors use our tools and resources to guide their giving annually, and our ratings are at the center of it all, making them the premier trust indicator of the nonprofit sector.

For several years, the team at Charity Navigator has wanted to increase the depth and breadth of our ratings. Thousands of nonprofits didn't meet our Star Rating System's criteria, so they were left unrated. Additionally, as a nonprofit ourselves, we knew that there was much more to being a "good charity" than healthy finances and good governance practices. We wanted to incorporate other important metrics into our ratings but, at the same time, didn't want to be disruptive to the nonprofits we had been rating for many years. So, in early 2020, we announced our plans to develop a new rating system that would live alongside our long relied upon Star Rating System.

We worked diligently to develop new criteria and methodology, and, in July 2020, we launched the Encompass Rating System with 150,000 nonprofits receiving their first-ever Charity Navigator ratings. Since launch, we have rolled out all four assessment domains, referred to as beacons. The beacons (Impact & Results, Finance & Accountability, Culture & Community, and Leadership & Adaptability) provide donors with insight into different aspects of a nonprofit’s ability to achieve impact. Star-rated nonprofits could earn beacons; however, beacons did not affect overall Star ratings as they did with Encompass ratings.

We are now announcing the next phase of our journey to aid donors seeking to ensure that their philanthropic giving is as intelligent and impactful as possible. In the fall of 2022, we will be merging our Star Rating System into our Encompass Rating System

This merger will result in a single, easy-to-understand rating system with a shared methodology that leverages the strengths of the Star and Encompass Rating Systems for all organizations. This will make it easier for donors to find, compare, and support nonprofits. It will also make it easier for nonprofits to engage with the rating process, communicate their ratings to stakeholders, and benchmark against other organizations. 

If you love the simplicity of the Star Rating System and the metrics included, you’ll be excited to know that all organizations will receive 0-4 star ratings. Additionally, many of the same Finance and Accountability & Transparency metrics will still be included in the Finance & Accountability beacon. Simply put, all 200,000 organizations we rate, including the 9,000 currently Star-rated nonprofits, will receive ratings based on the beacon scores they earn. As is now the case with Encompass ratings, Impact & Results, Culture & Community, and Leadership & Adaptability beacons are not yet mandatory. However, earning beacons can bolster organizations’ overall ratings in the unified system, and beacons can increase organizations’ visibility on our platform.   

We highly value and are committed to being fully transparent throughout this process. As we begin the transition to just one rating system, Encompass, we will be releasing more details, including an explanation of the methodology and a timeline for launching. In advance of the new, unified ratings going live, nonprofits will be provided with a preview period where they can review their metrics and provide additional data to earn more beacons as needed.

Our journey is far from over. More work is needed to evolve our Encompass Rating System, and we intend to continue refining and improving our ratings in 2023 and beyond. Our goal is to provide donors with the most robust and easy-to-use nonprofit rating system that will help them give confidently to the organizations that align with their passions and values. Additionally, we strive to provide nonprofits with opportunities to tell their stories and demonstrate impact with as little burden as possible during the rating process. Stay tuned for more blog posts, webinars, and other detailed communications. 


Written by Laura Andes, Chief Programs Officer at Charity Navigator.

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