green@work : Magazine : Back Issues : May/June 2003 : Headlines

Headlines

Charity Navigator, a non-profit watchdog that ranks charities based on its Internal Revenue Service (IRS) filings, recently revised ratings on 2,133 non-profits, including 213 organizations that support environmental causes. Notably, 79 percent of the environment-related organizations received four stars, the service’s highest rating.

For the first time, Charity Navigator released lists that spotlight the highest- and lowest-rated environmental charities in its extensive database, which is four times larger than any other charity watchdog. Charity Navigator is a free consumer service accessible at www.charitynavigator.org. The service features more detailed ratings, including 384 previously listed charities whose ratings have been updated and 383 new organizations never rated before.

Its intent, said executive director Trent Stamp, is to draw greater scrutiny to the inefficiencies of some organizations. Charity Navigator’s ratings assess the financial health of charities using data taken from each organization’s annual filings with the IRS. After analyzing two broad areas of a charity’s financial health—organizational efficiency and organizational capacity—Charity Navigator assigns each organization a rating ranging from zero to four stars.

In addition to the new, expanded ratings, Charity Navigator also recently released two lists of charities to which the organization hopes to draw greater scrutiny: a “Bottom-10 List” of the 10 lowest rated charities in its database, and a “List of Non-Responders,” the 46 non-profits that failed to provide the watchdog with their IRS filings, a refusal that violates federal law. The site also offers new articles about charitable giving, providing tips, polls, expert commentary and new top-10 lists, including: “10 Highly-rated Charities Relying on Private Contributions,” “10 Charities Routinely in the Red,” “10 Most Frequently Reviewed Charities” and “10 Consistently Excellent Charities.”

The Charity Navigator rating system uses publicly available tax returns (Forms 990) filed with the IRS to evaluate a charity’s overall financial health. Specifically, Charity Navigator looks at an organization’s fundraising efficiency, fundraising expenses, program expenses and administration expenses to show users how efficiently the charity operates on a day-to-day basis. To assess the non-profits capacity to sustain its programs over time, Charity Navigator looks at average annual growth of operating revenue, average annual growth of programs and services and working capital ratio. Based upon how the charity rates in each area, it is assigned a zero- to four-star rating.

Charity Navigator is itself a not-for-profit organization. The service is free, and the site is navigable by charity name, location or type of activity. Links are provided for all evaluated charities allowing potential donors to easily review each charity’s Web site. Charity Navigator can be accessed at www.charitynavigator.org, or contacted at 1200 MacArthur Blvd, 2nd floor, Mahwah, NJ 07430; (201) 818-1288.