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What Nonprofits Need to Know About Charity Navigator 3.0's New Rating System

charity-navigatorCharity Navigator, the United States’ leading independent charity evaluator, announced this week a new version of their rating system for U.S. nonprofits.

In addition to evaluating an organization’s finances and accountability, the new system will evaluate how an organization measures and reports the results of its work to the public. While some people believe this is much more challenging with a wide variety of organizations in the sector, others believe it’s a step in the right direction.

The New System's Main Goals

Charity Navigator’s CEO Ken Berger outlined the main goals of CN 3.0:

  1. “To provide the best information to donors to meet our mission to be a guide to intelligent giving.”
  2. “To drive more money to the high performing nonprofits and encourage other nonprofits to become high performing.”

See Charity Navigator's full statement about the new rating system.

3 Things You Need to Know

1) This new rating system is just in the beginning stages, and CN is intending to “gather data over the next three years to determine how to rate this information relative to where the charities stand currently in their results reporting”.

2) Data collected from the survey will not affect charity’s ratings until at least 2016. 

3) The new addition to the rating system consists of a 14-question survey, including these three questions:

  • Does the charity have a plausible ‘causal logic’ (or plan for achieving goals)?
  • Does it indicate how much of a particular action is required to produce a given result?
  • Does it publish evaluations reports that cover the results of its programs at least every 5 years?

What Your Nonprofit Can Do Now

1) Make a plan.

If you’re an organization with an existing CN rating, you have time to think about a plan to measure and share results before it affects your rating. But you’ll want to start thinking about this in the coming year or so. See this earlier post on how five nonprofits are doing this already. You can also consider how to use content to share your results, whether it's through your website, blog, or social media channels. If your organization does not have a CN rating, but you’re looking to get rated in the future, you should include how to measure and show results into your overall plan.

2) Research the tools you’ll need.

Consider what you’ll need to measure and show results, whether its technology, staff, or equipment. Google for Nonprofits provides an array of tools to track and show results. 

3) Start small.

It may be jarring to think that you might have to reallocate funds or hire a new staff member to start measuring and showing results, but you can start small. Some organizations, like Family First, are already doing so.

“A three star charity in Atlanta that offers parenting workshops for low-income parents earned check marks on all six questions in the “constituent voice” section [of the 14-question survey], which evaluates whether charities seek feedback form the people they serve.” They survey all their clients in a variety of ways, including “comment cards, focus groups, interviews with current and inactive clients.” They even involve staff members, who have a link to a SurveyMonkey questionnaire in all their email signatures.

We’ve spoken in the past about how organizations are already marketing their impact effectively and how it not only benefits the organization, but how it’s the right thing to do for your supporters. This new rating system is just one step forward in the hopes that more nonprofits begin to focus their time equally on fulfilling their mission, as well as sharing results.

If your organization is already measuring and reporting your results, you’re one-step ahead. The best thing to do now is set an example and share how you’re doing so. We would love for you to share your story in the comments below and get the conversation started.

How does your organization measure and share its results?

Image credit: calsidyrose