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.

Return to Main Site   |   Find a Charity   |   Receive Email Updates   |   Support Charity Navigator

Wednesday, August 24, 2022

Accountability and Finance Metrics and the Rating Unification: What Nonprofits Need to Know

As we announced this summer, Charity Navigator will be unifying its two rating systems (CN 2.1, also known as the Star Rating System, and the Encompass Rating System) this fall. Rather than offering two distinct rating systems, one holistic system will account for all aspects of a nonprofit’s operations that fall within the four-beacon Encompass framework. All eligible nonprofits will receive a 0-4 Star rating based on the aggregation of their earned beacons, not just on the finance, accountability, and transparency metrics that underpinned our legacy system. 

Here is what is changing this year in the Finance & Accountability beacon:

  • As part of our goal to provide a more complete picture of nonprofit effectiveness, we’ll be changing the name of the beacon to Accountability & Finance this fall.
  • For the 9,000 charities that have been rated under our legacy system (CN 2.1), their current 0-100 Star scores will become Accountability & Finance beacon scores at launch. This score will be combined with other earned beacon scores to form an overall 0-4 star rating.
  • Beginning in mid-September, nonprofit organizations may submit their 990 information directly to Charity Navigator to ensure we have the most up-to-date and accurate information on a nonprofit’s financial status and accountability practices. 

Here is what is staying the same: 

Here is what is coming in 2023:

In 2023, we plan to refine our Accountability & Finance beacon to harmonize the metrics and scoring across all organizations. We aim to streamline metrics and focus on the key aspects underpinning financial health. We will continue to share further updates on these methodological changes over the next six to eight months. 

Written by Matthew Viola, Vice President, Program Analyst Operations at Charity Navigator.

No comments: