Tag Archives: Charity Navigator

Navigating the Evaluators

I recently gave a keynote address for a conference of nonprofit leaders in Oregon. At one point, I asked people to raise their hands if they thought that the evaluation methodology of Charity Navigator, the country’s most popular nonprofit rating system, had validity. Nobody moved a muscle.

Then I asked: “So for those of you whose organization has received a top 4-star rating from Charity Navigator, raise your hand if you placed that rating on the home page of your website.” Dozens of hands reluctantly rose, accompanied by embarrassed laughter.

That moment crystalized both the charitable sector’s lack of respect for nonprofit evaluators, and its recognition of the evaluators’ influence. Continue reading

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Counting Mosquito Nets

If you think it’s simple to measure a nonprofit’s effectiveness, think again.

I’ve written before about the failings of Charity Navigator and other rating systems, which resort to vastly oversimplified measurements to evaluate charities – often in misleading or even detrimental ways. But can’t some truly in-depth analyses work better? Sure, but even the most concerted and thoughtful efforts to evaluate nonprofits are riddled with ambiguity and challenges. Continue reading

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Missing the Obvious in Nonprofit Ratings

[Note: This post is simultaneously being published as an opinion piece in the October 6, 2013 edition of the Chronicle of Philanthropy.]

Americans love ratings and rankings. We like to think that all large, complicated questions can be answered by simple numbers.

That’s given rise to the notion that nonprofits can be fairly and simply rated. And it’s not surprising that, once you scratch the surface, nonprofit rating systems prove to be nonsensical and even harmful. Continue reading

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Getting Something for Nothing

Sometimes relatively insignificant measures can assume an absurdly disproportionate importance.

For decades U.S. News and World Reports has been ranking the country’s top universities and colleges. These rankings have taken on great importance to college administrators, who routinely crow about moving up in the lists and who stay awake at night worrying about dropping down a notch or two. One of the qualities the magazine measures in compiling these lists is “selectivity” – that is, how hard it is for high school seniors to get admitted. The more selective the college, the better. And one of the dominant methods by which U.S. News and World Reports calculates selectivity is tracking the percentage of total applicants who are admitted.

Consequently, one of the easiest ways for schools to move up in the rankings is to do whatever they can to attract more applicants. Having more applicants lowers the percentage of acceptances and makes the school appear to be more selective, which in turn attracts a greater number of (status-seeking) applicants the next year, which reduces the percentage of those accepted once again, all of which which raises the institution yet higher in the rankings. So a single, easily manipulated measure affects an important (if deeply flawed) ranking system, which then feeds back to influence that measure and the ranking system still further.

Manipulation of these rankings came to mind when a report recently hit the internet about how a remarkably high percentage of nonprofits, including those raising lots and lots of money, report spending nothing – zero! – on fundraising expenses on their IRS 990 tax forms. Continue reading

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