As a charitable organization, managing your online presence is part of maintaining a strong public image and fostering trust with donors. One crucial aspect of your online presence is understanding and managing your organization’s charity rating. These ratings are prepared by charity rating sites (“watchdogs”) that evaluate nonprofits based on various criteria and make their findings publicly available. Here’s a primer on some of the major players: 

Candid’s GuideStar

  • Provides a Seal of Transparency based on the level of information shared by the nonprofit. For example:
    • Bronze seal means the organization provides basic information like mission, leadership, and contact details.
    • Silver seal organizations provide bronze-level information plus program information and geographies served.
    • Gold seals are awarded to nonprofits that provide, in addition to silver-level information, audited financial statements or Form 990 and leadership demographics information.
    • Platinum seal means the charity has provided gold-level information, as well as details about their goals and strategies, board demographics, and quantifiable impact.
  • While the Seal of Transparency is not a rating, it is a key data source for potential donors and other charity rating sites.
  • Nonprofits control their GuideStar profiles.

Better Business Bureau (BBB) Wise Giving Alliance 

  • Evaluates charities against 20 accountability standards, which fall under the following categories:
    • Governance and oversight
    • Measuring effectiveness
    • Finances
    • Solicitations and informational materials
  • Rates nationally soliciting charities; regionally soliciting charities are encouraged to contact their local BBB.

Charity Navigator 

  • Rates charities on a 0- to 4-star scale based on the weighted sum of scores in each of four key domains (“beacons”):
    • Impact and measurement
    • Accountability and finance
    • Leadership and planning
    • Culture and compensation 
  • Nonprofits can log into Charity Navigator’s Nonprofit Portal and provide additional data to earn beacons and ensure a more accurate rating.

CharityWatch

  • Rates charities from A+ to F based on financial efficiency ratios 
  • Evaluates charities with $1M or more in public support that are of interest to donors nationally and have been operating for at least 3 years
  • Evaluates based on program spending and fundraising costs
  • Typically updates ratings every other year
  • Periodically runs news features on select charities

While these charity rating sites use different evaluation models, a consistent theme is the emphasis on practicing transparency and quantifying impact. These sites can be used as tools for your nonprofit to garner additional support. To improve your charity’s rating, consider: 

  • Ensuring accurate IRS Form 990 reporting, especially the Statement of Functional Expenses
  • Claiming your organization’s GuideStar profile and fully updating it to achieve a Platinum Seal
  • Implementing robust governance policies and making them publicly available 
  • Communicating program accomplishments, goals, and success metrics in a clear and compelling manner 

Proactively managing your nonprofit’s presence on these charity rating sites allows your organization to demonstrate accountability and reinforce its credibility and public image. Watch our webinar to learn more about how to improve your nonprofit’s charity ratings.

Experienced nonprofit accounting and financial management professionals at YPTC are ready to assist you. Contact us to get started!

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