July 12, 2024
As a charitable organization, navigating your online presence is key to maintaining a strong public image and fostering trust with donors. One crucial aspect of your online presence is understanding and managing your organization’s charity rating. These ratings are prepared by charity “watchdogs” that evaluate nonprofits based on various criteria and make their findings publicly available. Here’s a primer on some of the major players:
1. Candid’s GuideStar
- Provides a Transparency Seal based on the level of information shared
- This is not a rating, however, it is a key data source for potential donors and other charity rating sites
- Nonprofits control their GuideStar profile and can earn seals from Bronze to Platinum
2. Better Business Bureau (BBB) Wise Giving Alliance
- Evaluates charities against 20 accountability standards
- Primarily rates national publicly soliciting charities
- Focuses on governance, fundraising practices, and solicitation materials
3. Charity Navigator
- Rates charities on a 0-4 star scale based on financial health, accountability, and transparency
- Their “Encompass Rating System” considers impact and measurement, accountability and finance, leadership and adaptability, and culture and community
- Nonprofits can log into Charity Navigator’s Nonprofit Portal and provide additional data to earn beacons and ensure a more accurate rating
4. CharityWatch
- Rates charities from A+ to F based on financial efficiency ratios
- Evaluates charities with $1M or more in public support
- Evaluates based on program spending and fundraising costs
- Periodically runs news features on select charities
While these platforms use different models, a consistent theme is the emphasis on practicing transparency and quantifying impact. These sites can be used as tools for your nonprofit to garner additional support. To improve your charity’s rating, consider:
- Ensuring accurate IRS Form 990 reporting, especially the Statement of Functional Expenses
- Claiming your organization’s GuideStar profile and fully updating to achieve a Platinum Seal
- Implementing robust governance policies and making them publicly available
- Communicating program accomplishments, goals, and success metrics in a clear and compelling manner
Proactively managing your nonprofit’s presence on these charity rating sites allows your organization to demonstrate accountability and reinforce its credibility and public image. YPTC is available to assist with resources, checklists, and experienced accounting and financial management professionals. For more information about this topic, click here to watch the webinar or here to contact YPTC for assistance.