Charity Navigator Review

I like to give money to different causes. Included in my list of places to donate are charities, social causes, and political concerns. I do not necessarily limit myself to a certain type of charity or cause. As long as the mission is positive and there are no unreasonable limits placed on the recipients of the charity, then I will consider it for a possible donation.

But there is one area that I am not always sure about, and it does lend cause for concern. This is the area of expenses. I want to know that a substantial portion of the money I give is, indeed, making its way into the hands of those who need the money rather than getting wasted on unnecessary expenses and high salaries. This is one of the reasons I use CharityNavigator.com, a web site that places different charities and other organizations under the financial microscope.

Web Service Commentary:

Charity Navigator is, first and foremost, a resource that opens the books on different organizations and lets you, the potential donor, see exactly how much it costs to run them. Expenses are broken into broad categories like Program Expenses (those that relate to the actual use of the funds toward the intended recipients of the aid), Administrative Expenses, and Fund raising Expenses. Revenue is also indicated, along with a pie chart showing the relative breakdown of the expenses and a bar chart showing the changes in revenue and expenses over the past four years. Underneath this data, there is a listing of the salary of the CEO and/or others in charge; the organization's Mission statement; statement of donor privacy; and a short list of other organizations that provide similar aid. Historical financial data is also available, and there is even a place to leave comments.

Each charity in Charity Navigator is evaluated using a star system, based on the efficiency of its use of funds. The star awards range from one to four, with one being the least efficient (high expenses, small percentage of money making its way to the actual people in need) and four being the most efficient (relatively low expenses, high percentage of money making its way into the hands of people in need). Actually, there is even a rating of "None" or no stars, for organizations that are exceptionally inefficient. The precise methodology used for these ratings is included in Charity Navigator.

Understanding the Charity Navigator ratings system isn't absolutely necessary to evaluate a charity or group of charities. All one has to do is access an organization and look at the financial profile. Pay close attention to the similar organizations listed at the bottom of the profile because these are similar organizations and they are good for comparison purposes. For example, I have been giving to the American Diabetes Association for many years, but I did not know that ADA was less efficient than the average company until I looked it up in Charity Navigator (the reason is because fundraising takes a lot of money for a large charity like this one). I then quickly learned, by looking at like organizations presented at the bottom of the profile page, that there are other diabetes research organizations that are more efficient. 

Charitable organizations number more than 5,000 in Charity Navigator and there are many ways to search for them. One can search for a known charity by name. If a potential donor isn't sure whom to give money to, but has some important causes in mind, he/she can search by type of cause (animals, health, education, etc.), by state and zip code (to find local causes), and by selecting a country on a world map. This latter feature is good for those who want to donate money to help a particular world region. By selecting an area from the map, Charity Navigator will then display highly rated charities that donate money to that particular area.

Anyone can logon and use Charity Navigator, but signing up with your own account is even better for the serious donor because it lets you maintain an organized list of your favorite causes, make comparisons, leave comments, etc. I have my own account and list, but unfortunately for me, not all of the organizations I give to are included in this site. It is important to note that an organization does not have to be connected directly with unbiased giving to be listed in Charity Navigator. Political causes are also listed. However, one of the requirements for inclusion in Charity Navigator is that the organization is 501(c)(3), tax exempt, and files a form 990. Organizations that do not fit these criteria will not be included in the site. 

Bottom Line Viewpoint:

Overall, Charity Navigator is a good web service for those who like to give. It presents financial information on different organizations, letting potential donors quickly see which are performing well and which are not. It also includes contact information, links to web sites, and everything you need to know to guide you toward the right organizations to focus giving. The financial data isn't updated as quickly as I would like and many different types of causes (those that are not tax exempt, political activist organizations, etc.) are not included. But Charity Navigator is still a solid, unbiased source for charity information and I will continue to access it whenever I want to evaluate an important charitable cause.