A Need for More (and Better) Data to Guide Giving
April 13, 2020 | Perspectives | 100&Change

Kevin Scally, Chief Relationship Officer at Charity Navigator, explores the current landscape of nonprofit evaluations and provides insight into new data that can help shape public opinion on what makes for an effective organization.


 

When you work for a nonprofit, one of the first questions you get asked by family members and strangers alike is, “How can I know that my donation is being used efficiently and effectively?

Good answers to this question are sometimes hard to source and deliver in an eloquent response. At Charity Navigator, we have spent almost two decades providing unbiased evaluations of nonprofits based on financial health, accountability, and transparency. The primary source of this data has been the IRS Form 990. While this is important information to giving, there can and should be more that helps determine whether an organization will use the donation effectively.

"We have started adopting a nibble, bite, meal mentality, where donors looking for a basic trust indicator would have multiple points of entry, depending on their appetite."

We would love to think that philanthropists of all sizes want to spend the time and energy diving into the finances, governance practices, and performance data of each nonprofit they support; however, the majority of the 10 million visits to our site annually end with a quick glance at a star rating. With this in mind, we have started adopting a nibble, bite, meal mentality, where donors looking for a basic trust indicator would have multiple points of entry, depending on their appetite. But to make that nibble as comprehensive as possible, there needs to be more and better data available at scale.

100&Change offers a comprehensive evaluation, where each submission goes through multiple levels of review, including an evaluation by an external panel of judges referred to as the Wise Head Panel, and a technical review by specialists whose expertise was matched to the project. One of the members of the Wise Head Panel was Charity Navigator’s President and CEO Michael Thatcher.

It was refreshing to see the qualitative and quantitative data, digital storytelling, and passion that went into each of the Top 100 submissions, which are featured on the Bold Solutions Network. While the finalists are still being decided, donors and grantors are provided with a list of organizations with truly innovative approaches to the world’s most critical social problems. When reviewing the list, I was delighted to discover that 21 are highly-rated nonprofits on Charity Navigator. To help raise awareness and funds for these organizations, we published a 100&Change Hot Topic on Charity Navigator that encourages visitors to view the video submissions and support each nonprofit through our Giving Basket.

What can we learn from 100&Change and the competition updates along the way? The driving factor behind the collection and sharing of information in the 100&Change competition is a $100 million grant. While it is impossible to evaluate proposals and organizations to the same degree at scale, there should be a solution where similar indicators inform giving that comes in the form of $50 donations via direct mail solicitations and $5,000 grants from family foundations. 

Charity Navigator has started traveling down a path that will provide a much more comprehensive view of each nonprofit we rate. We recently surveyed 725 visitors to our site who shared input on the elements of nonprofits that influence their giving.

Accessible data for graphs below ›

 

HowImportantIsANonprofit'sPerformanceDataThatShowsTheImpactOfYourDonationWhenDecidingToSupportTheOrganization?

 

HowimportantIsANonprofit'sReputationWhenDecidingToSupportTheOrganization?

 

HowImportantIsANonprofit'sFinancialStabilityWhenDecidingToSupportAnOrganization

 

HowImportantIsANonprofit'sInternalPoliciesRegardingDiversity,Equity,InclusionWhenDecidingToSupportTheOrganization?

 

While the above is only directional, it does provide a strong signal that donors value aspects of nonprofits above and beyond financial health, accountability, and transparency. There are many sources for the data described with these questions, but there is a need to collect, analyze, and surface it in a meaningful way—that is exactly what we intend to do. And Charity Navigator’s involvement in both evaluating and showcasing 100&Change proposals came at the perfect time, as we explore ways to provide a more comprehensive look at nonprofit effectiveness in our ratings.

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