Watchdog Hopes To Double Capacity

December 18, 2014       Mark Hrywna      

Charity Navigator hopes to raise $8.5 million over the next three years to help double its capacity amid its evolution to “Charity Navigator 3.0.”

Money raised will go toward staff and infrastructure to support Charity Navigator’s goal of improving access to information about nonprofits, particularly more in-depth data. The organization offers free ratings of 8,000 charities but has a goal of rating 10,000 charities using the CN 3.0 methodology.The $8.5 million figure, cited in a fundraising email sent earlier this week, is the first public estimate by Charity Navigator of what it needs for its expansion plans.

CN 3.0 would add results reporting metrics to current financial health, accountability and transparency. Charity Navigator also aims to increase the ability to use big data and interaction with nonprofits to get more data from them and rate more organizations.

The Glen Rock, N.J.-based charity rating service reported total revenue last year of $1.6 million. “So if we were to remain constant over the next three years, we’d be raising about $4.5 to $5 million,” said President and CEO Ken Berger. The $8.5 million goal would mean raising an additional $3.5 million to $4 million over three years, he added.

For 2015, the budget will increase by $1 million, to $2.5 million, with a plan to increase by $1.5 million in 2016. Charity Navigator plans to complement increased fundraising with funding from its reserves, a half-million next year and $600,000 in the following year. “We’ve managed over a number of years to build up substantial reserves — well beyond what Charity Navigator requires to get the highest rating. We’re putting our own skin into the game,” Berger said.

“What it entails is scaling up. Understanding our capacity needs to achieve Charity Navigator 3.0 and increase the number of charities we rate,” Berger said. “We will be two times as large this time next year if all goes according to plan,” he said, increasing from 14 staff to 28. If fundraising doesn’t materialize along the timeline, Berger said the expansion would go more slowly.

The three areas that will substantially increase include doubling the number analysts, increasing the number of IT staff as well as development. Charity Navigator plans to increase development staff from one full-time position, in addition to Berger’s time spent fundraising, to four full-time staff, and also boost IT staff from one to four positions in the next year. The organization also plans to hire a chief operating officer, a position that has been vacant but whose scale, scope and complexity has evolved tremendously since Berger took the helm.