Should Nonprofits Fear Charity Watchdogs?

“We don’t care about Charity Navigator ratings.” 

The comment from a keynote speaker at a recent conference had some of us tilting our heads like a German shepherd does when it shifts its head to redirect the big radar dish ears to an usual sound. 

Did we hear that right?

The thought behind the speaker’s claim is that the rating, traditionally with a heavy focus on financial efficiency, handcuffs an organization from raising as much as it can for the cause. Nonprofits have had a love-hate relationship with Charity Navigator for 20 years. When the finances are good, love is in the air. When a nonprofit loses a star, the first question from an executive’s mouth is, “What’s Charity Navigator’s phone number?”

Charity Watchdog Engagement

Engaging with Charity Navigator to reach constituents is one of those huge, low-hanging fruit opportunities right now. Here’s why.

Recognizing the concerns that watchdog groups can cast a negative public perception on nonprofits, Charity Navigator has made a massive shift in how it reviews organizations over the last six months. It aims to propel the nonprofit sector into changing its collective mindset of what makes a nonprofit a healthy organization. 

Focusing on promoting the outcomes of nonprofits and their missions, Charity Navigator is in the midst of adding a ton of context to quantitative metrics and minimizing nuanced indicators — like how much an organization’s reserve has grown in one year. The watchdog has even recruited more than 30 volunteer nonprofit industry experts to evaluate and recommend qualitative methodologies based on cause. 

Countless times, board members have agonized when a nonprofit’s program spending dropped a percentage point without looking at the end result. Now, instead of focusing solely on finances and accountability, Charity Navigator assesses programmatic impact, how well a nonprofit articulates its mission, as well as its investment in staff development, commitment to equity and ability to listen to their community members. 

4 Tips to Maintain Your Charity Navigator Rating

As Charity Navigator makes the shift, nonprofit leaders can help ensure a great rating based off of well-rounded metrics by keeping a handful of tips to keep in mind this year. 

1. E-file Your Form 990

Imagine if your nonprofit served 200,000 member organizations. That’s almost what watchdog groups are trying to manage. Most nonprofits e-file their 990s, but getting an updated rating more quickly largely depends on filing electronically. 

2. Keep Your Candid Profile Updated

This is how Charity Navigator is evaluating a nonprofit’s community and culture part of its rating. Charity Navigator pulls profile data from Candid’s GuideStar to see how an organization is getting feedback from its community and putting it into practice, as well as a nonprofit’s commitment to diversity, equity, inclusion and belonging. 

3. Invest in Our Staff

With retention topping the list of concerns among nonprofits, developing your staff should be top of mind. Charity Navigator’s beacon of leadership and adaptability is not just based on mission and vision statements and the adaptability shown in your annual reports, nonprofits are critiqued on investments in developing the skill sets of staff. 

4. Have a Conversation 

Watchdog groups are made up of people, too. The best way to make sure your organization’s impact is being measured appropriately is making sure Charity Navigator understands your mission-type (environment, healthcare, arts, etc.) and the business model (foundation, advocacy, research, etc.). 

Instead of fearing the ratings, 2023 is a real opportunity for nonprofit leaders to allow places like Charity Navigator to amplify our reach and how well we’re doing at trying to make the world a better place.

The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.