Specifically, Charity Navigator's rating system examines two broad areas of a charity's performance; their Financial Health and their Accountability & Transparency. Our ratings show givers how efficiently we believe a charity will use their support today, how well it has sustained its programs and services over time and their level of commitment to good governance, best practices and openness with information. In the not-too-distant future, we plan to also rate charities’ reporting of their results. We provide these ratings so that charitable givers/ social investors can make intelligent giving decisions, and so that the nonprofit sector can improve its performance.
Charity Navigator accepts no funding from the charities that we evaluate, ensuring that our ratings remain objective. Furthermore, in our commitment to help America's philanthropists of all levels make informed giving/ social investment decisions, we refuse to charge our users for this trusted data. As a result, Charity Navigator, a 501 (c) (3) public charity itself, depends on support from individuals, corporations and foundations that believe we provide a much-needed service to America's charitable donors. Please support Charity Navigator now so we can continue to help donors make informed choices.
Charity Navigator was launched in spring 2001 by John P. (Pat) Dugan, a wealthy pharmaceutical executive and philanthropist. The group's mission was to help "...donors make informed giving decisions and enabling well-run charities to demonstrate their commitment to proper stewardship" of donor dollars. Initially, Charity Navigator provided financial ratings for 1,100 charities. Charity Navigator announced plans to evaluate 10,000 charities in the United States by 2016, along with organizations with international operations.
The site also features opinion pieces (articles and two blog sites) by Charity Navigator experts, donation tips, and top-10 and bottom-10 lists that rank efficient and inefficient organizations in a number of categories. Annually, Charity Navigator conducts a national study to determine and analyze any statistical differences that exist in the financial practices of charities in metropolitan markets across America.
In recent years, Charity Navigator has become outspoken against what it calls high CEO compensation. At the same time, they note that nonprofit CEOs should be paid what the market demands. They complete a CEO compensation study each year. In the study, they have consistently argued that a low six-figure salary for a CEO of a mid-to-large sized nonprofit is the norm and should be acceptable to donors. They further argue that these are complex multimillion dollar operations that require a high level of expertise. They are however, outspoken against the phenomenon of million dollar plus compensation, which they do not believe is justified for a tax-exempt public charity.
This response from charities provides compelling evidence of the value add to charities of a positive CN rating and the steps they are willing to take to optimize it. In doing so, they render themselves better organizations, with greater accountability and transparency to key stakeholders.
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