Charity Navigator Goes To 100-Point Ratings System

It might be time to dig out that retainer and tuba from your high school yearbook picture. Charity watchdog Charity Navigator changed in August the way it issues its ratings. While the organization has no plans to move to a letter grade system, the new system is based on 100 points, similar to the school system and is more recognizable to users.

The biggest reason for the change “is for the sake of simplicity and the intuitive understanding that people have,” said Ken Berger, president and CEO of the Glen Rock, N.J.-based organization. “Our educational system is based on the 100-point system, and grades are apportioned by a numeric score. It’s a much more familiar breakdown.”

Users have expressed confusion at the ratings, said Berger. “We’ve gotten feedback over the years from users who have said, ‘I don’t understand how (a score of) 65 gets four stars,” he said. “This way is cleaner and leads to less confusion.”

In the new 100-point method, a score of between 90 and 100 will translate to a four-star rating, 80 to 89 will be three stars, and 70 to 79 will get an organization a two-star rating. “We’re liberal in our grading system: a D (one-star rating) is 56 to 69,” said Berger. “We give you a little extra room for your D.” Any organization that scores 55 or lower will receive no stars.

Berger said the time was right to make the change because the summer is traditionally when Charity Navigator’s website sees the least traffic. “It also gives time to beta test (the change),” he said. “The real test will be the holiday giving season because that’s when our traffic is at its peak and the most people are looking.” Charity Navigator’s website received more than 1 million hits last December, compared to about 400,000 this past July..

The 70-point system comes from the founding of the organization in 2002, when there were only seven metrics it used to judge nonprofits. “Those seven are still looked at when it comes to finance,” said Berger. “We added a whole new dimension (accountability and transparence), and that adds 17 (metrics), so we’re up to 24.”

Charity Navigator is “in the middle of the infamous scaling-up process,” according to Berger, and in January 2013 began gathering the data necessary to add a third facet of rating: results reporting. “Our goal is to have it affect the rating at the earliest by the end of 2016, provided we receive the funding required to double our size and staffing,” said Berger.

Results reporting will add another 15 metrics, making a 70-point system even more cumbersome, Berger said. The new facet will be more qualitative than quantitative and will be focused on how effectively an organization carries out its mission. Metrics include:

  • Are there specified measures (indicators) to be collected and a plan to do so?
  • Does the charity publish feedback data from its primary constituents?
  • Does the charity publish evaluation reports that cover the results of its programs at least every five years?
  • Does the organization report back to its primary constituents what it heard from them?

Feedback on the new 100-point system has largely been positive, said Berger, but he expects more input from users and some pushback. He said there those who will criticize anything the organization does.

“Charity Navigator is pretty unique in that we make judgments as advocate and educator for donors, and advocate for high-performing nonprofits,” he said. “Any time there’s a change is an opportunity to raise questions, and one of my many challenges is to listen carefully and differentiate between criticisms that are thoughtful and we should listen to, and criticisms that are bogus from those who don’t want to be accountable. We’re more under a microscope than any other charity I’ve worked with.” NPT