The Smarter Giving Guy » charity ratings

I love AIP’s work

SG Guy — Fri, 06 Aug 2010 22:24:36 +0000

The American Institute of Philanthropy (AIP) is a charity watchdog and information service. At its charitywatch.org website, it publishes an ongoing list of its top-rated charities (those earning ratings of B+ or better). It also publishes a charity rating guide three times a year, where it provides its ratings for 500+ larger, national charities. The guide is available to members who donate $40 or more, and is quite helpful to those who want to dig deeper into the operations of charities they are considering supporting.

While some disagree with its approach, AIP takes a hard look at the information provided by charities in their IRS Form 990s and audited financial statements. It focuses on percent of spending on programs, cost to raise $100, asset reserve levels, charity compensation and other indicators. It adjusts information provided in charity reports to reflect its independent look at reported spending allocations.

I wish AIP had the resources to cover more charities — almost 500,000 public charities file Form 990 for 990-EZ, and it covers about 550 of them.

AIP’s charitywatch.org site. AIP’s membership page.

Check out greatnonprofits.org

SG Guy — Tue, 01 Dec 2009 23:46:22 +0000

There’s a new tool out there to help with evaluating charities: greatnonprofits.org

Here’s a bit of what it says about itself:

GreatNonprofits is a tool that allows you to find, review, and talk about great — and perhaps not yet great — nonprofits. You already know that reviews by other people who have gone to a restaurant or tried out a doctor are the best way to find out about the quality of those services. If you have direct experience with a nonprofit, GreatNonprofits makes it easier for you to share your knowledge so that other people can discover the great nonprofits that are out there.

We don’t review nonprofits ourselves. Much like Amazon book reviews or consumer reviews site (Epinions, Zagats, TripAdvisor, Yelp, etc.), the reviews and ratings are posted by people who have been touched by a nonprofit and want to share their story about it. You’ll see on our site stories of people who have volunteered for or donated to nonprofits and stories of people who have received services.

For now, I’ll take strong positive ratings with a cup of salt — given the likelihood of overly-positive ratings from those served (if they want to keep the nonprofit going). On the other hand, if a nonprofit gets bad ratings from many constituents, that probably tells me to stay away.

Take a look. I’d love to hear what you think.

Question: Where Can I Find Charity Ratings Online?

SG Guy — Wed, 23 Sep 2009 02:57:47 +0000

Answer: Few organizations provide ratings of charities, and their coverage is very limited (especially when you consider that there are more than 1 million charities operating in the U.S.). The two most prominent are:

CharityNavigator.org describes itself as “America’s Largest Charity Evaluator” and provides “star” ratings (0 to 4 stars) on roughly 5,400 larger charities. Roughly one-third of covered charities receive a 4-star (exceptional) rating, roughly one-third receive a 3-star (good) rating, and the remainder receive 0, 1 or 2 stars (exceptionally poor, poor and needs improvement, respectively).
The American Institute of Philanthropy, through its charitywatch.org website, publishes a list of its top rated charities. Paid subscribers can obtain the full list of the 500 or so charities is has rated. 35% to 40% of covered charities receive A (includes A+ and A-) ratings.

Other organizations provide charity data. See our Charity Data & Ratings list in the right hand column.

It’s clear, from the published ratings, that some charities do solid work with the dollars entrusted to them; and others do not – just compare a 4-star charity to a 0-star charity at CharityNavigator.org.

What it boils down to is that

donors need to distinguish strong from weak charities and,
for the most part, donors need to be their own charity rating agencies.

To help you be your own charity rating agency, see the www.SeriousGivers.org website.