Monday, April 13, 2009

Charity Navigator's 7 Year Anniversary - Looking Inward

As noted last week, on the anniversary of the launching of our web site (April 15, 2002) it has been a tradition for us to either reflect back on the past year or forward on the year(s) to come. This year, we do both. Last week we reflected outward on the charitable sector as a whole, this week we reflect inward to Charity Navigator itself.

Last year, we did not write an anniversary article because Charity Navigator was looking for a new President & CEO. So I will take a two year look back. Perhaps the most significant event occurred in November of 2007 when Charity Navigator, a private foundation at the time, filed with the IRS to become a public charity. As a result, we are now in what is called the five year advance ruling period and hope to be permanently approved by the IRS in November of 2012. One of the key changes this entails is that, whereas in the past we relied almost entirely on funding from our founders – the Dugan family – we now intend to rely upon a much more diverse array of funders. Consequently, last November/December, for the first time we reconnected on a large scale with donors and asked all who had been so generous with unsolicited gifts in the past to consider giving again. The response was tremendous! We were greatly heartened and encouraged by the enormous increase in donors to Charity Navigator as a result of the mailing. We will still need more to join us but the message is clear – many of our users understand the cost of objectively analyzing data on over 5,000 charities a year and our critical importance in helping them to make wise giving decisions.

You may have also noticed that for the first time, we are accepting paid advertising on our web pages. These ads are increasingly catered to our users’ interests. Since we are unique among our peers, in that our services are completely free to both donors and charities that use our seal, we hope that strategies like this will help us to continue to operate at no cost to our users. In addition, we will be asking foundations and corporations to play a much bigger role in supporting us. Of course your voluntary individual donations will remain critically important too![1] In spite of the anticipated decline in funding of charities during these challenging economic times, we believe that donations to Charity Navigator will increase because of our vital role in assuring that every penny you donate to charities counts. In fact, we think we are needed now more than ever! We also encourage you to give us your suggestions for ways to raise the funds we will need to do even more to accomplish our mission to help donors make wise giving decisions.

Our transformation into a public charity also means that we intend to “walk the walk” and not just “talk the talk” about what it means to be a four star charity. We are in the process of implementing a wide variety of good practices here at Charity Navigator, that we believe all charities should follow. We are also seeking to transform our evaluation system of charities to include two additional dimensions (beyond financial health) – accountability (including transparency)[2] and outcomes.[3] You will continue to hear about these components of making wise giving decisions in the months ahead.

In conclusion, Charity Navigator arrives at its 7th anniversary with great optimism about the future. In spite of all of the bleak predictions in our top ten list[4], the heart of the charitable sector remains strong. The American people give more than twice as much to charity each year as people in any other country in the world. We also break the record for the percentage engaged in volunteerism with over 61 million of us pitching in. Based on all of this time and treasure that is poured out of the hearts of so many, we know we will weather the storm together and continue to do great things. We look forward to staying in touch as we go down the road.

[1] Click here to learn more about donating to us.
[2] We intend to add information on accountability and transparency issues by the end of the year. I have also written on this topic here – A Tale of Two Nonprofits and Moscow Conference: How Does a Nonprofit Become Trusted?
Two blog entries on the topic of outcomes so far – A Measure of Outcome and A Scary Finding on Outcome Measurement.
Predictions for the Year(s) to Come


Frank Pepper said...

why is it necessary for u to go to the IRS when even a church does not have to. U can tax any donation from ur taxs with out being a 501c3.

Ken Berger said...


I am not sure I understand your question but I will try. We go to the the IRS to get the informational report (called the 990) of the charities we evaluate because that is the data we use to make our assessment.

Churches do not file an informational report, so we do not evaluate them. However, our colleagues at Ministry Watch try to get information directly from some churches.

Btw, it has been our experience when we try to get information directly from charities, that the majority are unresponsive. That's why we get it from the IRS.