Join The NonProfit Times: or Become a member

Subscribe: Print Publication or Newsletter

Stay connected.
Stay informed.

Charity Watchdog Reorganizing Evaluations, Rates Itself 4-Stars

By Mark Hrywna - February 22, 2016

Telling a room full of direct response fundraisers that mass mailings might not be the best way to promote intelligent giving won’t win you many friends. But then again, Michael Thatcher wasn’t necessarily there to make friends, instead offering a view of Charity Navigator’s future priorities, which include plans to rate the impact and results of nonprofits, and rating more charities.

Stepping into the lion’s den, the new CEO of Charity Navigator sat down for a brief question-and-answer session during Friday’s luncheon at the Direct Marketing Association Nonprofit Federation’s annual Washington, D.C. conference. Thatcher, who was appointed last fall to succeed Ken Berger, took questions from Shannon McCracken, vice president of donor development at Special Olympics and chair of the DMANF Advisory Council and a few from the floor as a microphone was passed.

In brief remarks before the conversation, Thatcher shared some statistics about Charity Navigator, its priorities, and the effort to revamp its ratings as part of “Charity Navigator 3.0.” Charity Navigator is aiming to release revamped financial evaluations and other changes this spring.

“To shift ratings away from overhead, we must talk about impact,” Thatcher said. At Charity Navigator, that will include reducing overhead as a metric, implementing a 10-point system, moving to three-year rolling averages, and eliminating revenue growth as a metric. The goal is to create a desire for impact and measuring impact, he said. “We’re looking for a means to actually rate that, to be part of the rating system if not the most important part. How to articulate results will be essential to moving forward,” Thatcher said. “Overhead is a problem but we haven’t actually given people something else to focus on,” he said.

Traffic to Charity Navigator’s web site was up 21 percent last year, to more than 9.1 million visits, according to Thatcher. He described the charity as a web or technology company that provides a service. With 40,000 unique donors last year, he said the organization is different from nonprofits in attendance that rely on donors. “Our donors are our users,” he said, similar to public media like NPR.

The Glen Rock, N.J.-based charity rating service is often at odds with the nonprofit direct mail community. Among Thatcher’s comments that seemed to receive the most indignation from attendees was the idea that nonprofits should share more information about donor list practices and that donors opt-in to sharing their information with other charities as opposed to opting out.

“We’re not categorically against list sharing. We’re asking that you let donors know,” Thatcher said. “Donors must be able to opt-in,” he said.

The biggest complaint from donors – “since day one” – is the “excessive amount of mail they receive,” according to Thatcher.

Part of Charity Navigator’s mission is promoting intelligent giving and mass mailing might not be best way to do that, Thatcher said, conceding that the organization and mailers might have to agree to disagree on that point.

Thatcher remained resolute on the issue of Joint Cost Allocation, which has chafed some in the direct mail community. He estimated that only about 400 of the 8,000 charities currently rated by his organization report joint cost allocations. “The average donor’s not going to understand what that means,” he said, adding that it’s not an issue of whether charities do it but that they articulate clearly to donors that they report joint cost allocations.

People might not realize how small Charity Navigator is, with a $1.5 million budget and 19 employees. One audience member questioned whether the organization has the funding, resource and manpower to for the massive undertaking of revamping its ratings and measure results and impact of more nonprofits.

In response to a question from the audience about whether Charity Navigator would rate itself, Thatcher said he’s committed to taking that to his board next month and providing a response. “We want to do this, we actually do rate ourselves” as a four-star charity, he said, promising to make that data available.

Charity Navigator’s methodology currently requires a nonprofit to have seven years of financial data to produce a rating; the organization shifted from a private foundation to a nonprofit starting in 2014.

Charity Navigator also is in the process of rebranding its Watch List, which was the subject of another question from the audience. Wounded Warrior Project recently was placed on the Watch List after stories by The New York Times and CBS News, in which former employees questioned its spending practices and those items were not independently investigated by Charity Navigator nd in some cases were incorrectly reported. The Watch List is perceived as being more toxic than Charity Navigator’s “donor advisory,” which Thatcher said is much more damaging and a harsher claim.


Sponsored Podcasts

Welcome to the Raise & Engage podcast, a filters-off series for nonprofit professionals hosted by Blackbaud's straight-shooting expert Danielle Johnson Vermenton. During this open-mic session, you’ll hear honest advice to help YOU do more for your cause.

Episode 6: The Power of ‘No’ at Work|| daniellejohnson-76

You have a job description, but on any given day, you're probably doing dozens of things outside the scope of that description. Combine that with the challenge of a fast-paced environment and the shifting priorities of funders, colleagues, and board members and it’s easy to fall short of doing your best. By being mindful of your limitations and capacity—and saying “no” when your plate is full—you can actually do more for your cause. In the sixth installment of the Raise and Engage podcast Danielle Johnson and Robin Anderson discuss the power of saying “no” at work.

Episode 5: Professional Development: Getting Un-Stuck|| daniellejohnson-76

In the most recent episode of Raise + Engage, Danielle is back with Brian Reich from little m media to discuss how nonprofit professionals can stay motivated and energized in their day-to-day roles. Brian shares his experience working with nonprofits and the lessons and tips he's learn from and shared with them over the years, including tips for avoiding a professional rut, creating forward momentum in your career and pushing yourself outside of your comfort zone. If you're considering making a career move or want to ensure you're on the right path, you won't want to miss this inspo-packed episode!

Episode 4: Apps and Hacks to Stay (Mostly) Sane || daniellejohnson-76

Episode 4: Apps and Hacks to Stay (Mostly) Sane, is all about tips, tricks and tools for sanity. Blackbaud’s own interactive product marketer, Julia Lenz, joins host Danielle Johnson to share some high tech. (and no tech.) productivity tips to help nonprofit professionals stay sane in the crazy world of philanthropy.

Tune in to hear:

  • Tips for how to spend the first 30 minutes of your day
  • The benefits of 15 minute meetings
  • Why notebooks are still relevant to a successful organization
  • Ideas for better managing your inbox
  • Why you should take lunch outside the box
  • ...and much more!
Don’t forget to visit the #NoFilterNonprofit Hub afterwards to download our newest tip sheet10 Productivity Hacks for Nonprofits.

Episode 3: Tech. Connection: Solutions, Strategy, and Staff || daniellejohnson-76

Episode 3: Tech. Connection: Solutions, Strategy, and Staff In episode 3 of the Raise + Engage podcast, Danielle Johnson is joined by Chris Geady and William DaSilva, two IT experts in the nonprofit space, to talk technology integration for NPOs: when you need it, when you don’t, and how to do it successfully.

Tune in to hear:

  • When to say NO to integration
  • How to set your strategic plan before even looking at technologies
  • Ways to get your entire team on board
  • The importance of identifying a project lead
  • The RFP process - how it should and should not go
And William shares a story about a nonprofit that may or may not have still been using a typewriter. You don't want to miss this one!

Episode 2: From Socially Awkward to Socially Awesome! || daniellejohnson-76

According to Danielle Johnson, straight-shooting host of the Raise + Engage podcast series, if your staff members aren’t the number one advocates for your cause on social media, you’re failing. In the most recent episode, Danielle is joined by Blackbaud’s own social media guru Madeline Turner to discuss overcoming social struggles and creating a social ambassador program at your organization. This entertaining and insightful duo dishes on the importance of making your social media presence human, making the case for a formal social program to leadership, how University of Michigan turned a one time social media campaign into a long term social program, and how Madeline's mom unknowingly became a social ambassador on #GivingTuesday.

Episode 1: Corporate Culture & Development: Shake It Up! || daniellejohnson-76

In the premiere episode of Raise & Engage, Danielle is joined by three straight-shooting nonprofit rock-stars: Jodi Smith of Sanford Health Systems, Veronica Brown of Chicago Public Library Foundation and Ali Burke of Southlake Regional Health Centre Foundation. The group talks organizational culture, problem employees, why its important to celebrate and how to shake things up this year and build a better more authentic team that gets stuff done!


Stay informed, catch latest trends in the nonprofit space.

Subscribe to Our Free Newsletter

No obligation, unsubscribe at anytime.

Success! Check your email inbox.

Follow Us On Twitter

NPT 2016 Buyers' Guide

Newsletter Sign-up

click here to return to the previous page