Charity Navigator Adjusts Methodology Due To Pandemic

Charity Navigator has adjusted its rating methodology. Under the new structure, nonprofits can maintain pre-coronavirus pandemic ratings if staff members detail how the organizations have been affected by the pandemic and how the organizations met those challenges.

The Saddle Brook, N.J.-based nonprofit evaluator also loosened its requirement on the annual revenue amount that triggered its independent audit or financial review processes. Previously, organizations that claimed $250,000 in yearly revenue were subject to an audit. That minimum has been raised to $500,000. More than 33,000 nonprofits were affected by the change, according to a statement from Charity Navigator.

“Nonprofits are the safety nets of society, and they were stretched in ways we never before imagined,” Charity Navigator President and CEO Michael Thatcher said via a statement.

The changes come during an outlier period for nonprofits. Some nonprofits flourished, especially large, well-established organizations with missions that directly impacted increased strains on health or community services. Smaller, newer, BIPOC-led or non-relief missions have struggled, such as arts organizations. Many have experienced revenue drops, changes and eliminations to programs and operations, staff furloughs and layoffs and even closure.

“It probably goes without saying that in all our 20 years of evaluating charities, we have never seen anything so disruptive on such a large scale as the COVID-19 pandemic,” Charity Navigator Vice President, Program Analyst Operations, Matthew Viola wrote in a blog post on the organization’s website.

“In our work to be fair and accountable, we realized early in the pandemic that we were going to need to adjust how we evaluate nonprofits based on its effects,” Viola continued.

Traditionally, Charity Navigator has posted a new rating on a nonprofit when the nonprofit releases a federal Form 990 financial filing. Under its new protocol, for fiscal years ending on March 31, 2020 or after, Charity Navigator will request nonprofit leaders fill out a questionnaire that details how the organizations adapted and delivered on their missions during the pandemic, Viola wrote in the blog post. Questionnaire responses will be shared without edit on each nonprofit’s profile page. To date, more than 3,600 nonprofit profiles on Charity Navigator now feature this information.

These aren’t the only information changes on profiles. “Once we process a COVID-affected 990 and realize that the overall score would decrease in any way, we will be notifying the charity and giving them 30 days to answer the (Project Cpr) questionnaire,” Viola wrote. “If the nonprofit responds, we will post their submission, and allow the organization’s rating to remain unchanged from its current rating. This will be made clear on our site with a message stating that a new rating was postponed due to COVID-19, along with a link to the organization’s response.”