Watching the TEDxMid Atlantic video made me realize just how much our decisions are based on word of mouth. I thought it was a very interesting point that he was making when he argued for the need to do your research before you support any nonprofit. Sometimes we let ourselves go by facades based on first good impressions or whatnot, but we fail to proactively do our research about what organization we are supporting.
In a fundraising class, I learned about www.charitynavigator.org, a nonprofit whose purpose is to be a charity evaluator. Ideally, prior to a donation, some kind of research should be done by the donor in which the donor obtains an idea about how the donation will be utilized. Organizations are scored and rated based on (1) financial and (2) accountability and transparency, based on varies metrics like program expenses, administrative expenses, fundraising efficiencies, and liabilities to assets, to name a few in the financial aspect, and information provided on the Form 990 (Independent voting board members, CEO listed with salary, and conflict of interest policy, to name a few) and the accessibility of information in the charity’s website.
Charity Navigator also gives you the income statements, where its revenue comes from and what its expenses are like. It also shows the trend of revenue and expenses throughout the years and the compensation of its leaders. Another great contribution of the website is a comparison of overall ratings between charities with other similar types of work. In more detail, Charity Navigator also breaks down the organization by the three top programs and shows how much is spend for each program.
All around Charity Navigator is a great tool and definitely one that every donor should be aware of and utilize before making any donations to a charity they know little about.