When an individual chooses to give to a charity, they trust that their donation goes toward initiatives that directly advance the cause of the organization. However, occasionally, funds raised through charitable giving are distributed throughout the organization itself. They may be used to fund programs, but they may also go toward expenses and salaries. In rare cases, donations can be misused due to a failure in leadership.
If you want to know more about a charity before contributing, you can take advantage of a number of online tools to help you identify legitimate charities and avoid donating to a scam. One of these tools, Charity Navigator, reviews charities and rates them.
Why Use Charity Navigator
Charity Navigator launched in 2001 to address a lack of transparency for many charitable organizations. The website aims to strengthen trust between donors and charities through data, reviews, and other resources. Each year, the website welcomes millions of visitors seeking information about a specific charity or charities that support a specific cause. Equipped with this intelligence, they go on to make informed decisions about where to spend their time and money.
How Charity Navigator Rates Charities
Using Charity Navigator’s easy-to-digest ratings of charities, visitors can easily decide where to give their money. Ratings consider two factors when determining where a charity will fall on the scale. Those two factors are:
- Financial Health: Charity Navigator reviews an organization’s informational tax return to understand its financial standing. It considers seven financial areas and awards a score between 1 and 10 for each, ultimately calculating a full Financial Health score.
- Accountability & Transparency: To ascertain this score, Charity Navigator reviews an organization’s Form 990 and its website, then calculates 17 metrics in the areas of ethics, governance, and accessibility of information.
Final Score and Rating
The final overall score awarded to a charity comes from the average distance between both the Financial Health score and the Accountability & Transparency score and a perfect score of 100. Charity Navigator then awards the charity a rating of between one and four stars based on the overall score.