Charity Navigator vs. CharityWatch: What Your Nonprofit Needs to Know





If you work in the nonprofit sector, you have probably heard of Charity Navigator and CharityWatch. You also probably know that they are two of the top “watchdog” websites to keep track of your nonprofit.

But do you know who is using each site? How it affects your donors or potential donors? Or how each can help you share your mission?

Here is a head to head guide to help you know what you need to about Charity Navigator and CharityWatch, from their history and current scope to who is using them and what you can gain from each. Or find out how you can use nonprofit watchdog standards to up your nonprofit game.

 

charity-navigator vs charity-watch

 

What does Charity Watch do?

CharityWatch rates charities almost completely by financials. Their most infamous or most popular service is an annual publication, the Charity Rating Guide & Watchdog Report, that rates over 500 US charities using a financial efficiency formula. The rating formula includes top officer salaries, how much it costs to raise money, and how much of funding goes toward programs.

A charity has to use at least 60% of its funding for program work, and the best rated charities use at least 75%. That means that only 25% or less of their funds go to fundraising. The website consists of information on each of the researched charities, as well as lists on compensation of top executives. In short, it is a one stop shop to compare which big charities in particular categories are functioning at the highest level of financial efficiency.

What does Charity Navigator do?

Charity Navigator is much larger in scope than CharityWatch. It is currently the US’s “largest and most-utilized evaluator of charities” (self-reported on their website). Professionals – both paid and unpaid – on their team evaluate nonprofit financial documents to assess a charity’s effectiveness. They look at both financial health as well as “accountability and transparency.”

While CharityWatch uses a A-F school card like rating system, Charity Navigator has a star rating system. 4 is the highest.   It has fully evaluated more than 8,000 charities and provides basic information on the other 1.4 million active US nonprofits.

Which came first? Charity Navigator or CharityWatch?

CharityWatch was founded first. Daniel Borochoff created the American Institute of Philanthropy (AIP) in 1992 “to address the continuing need for thoughtful information regarding the financial efficiency, accountability, governance and fundraising practices of charities” (as posted on Guidestar).

Charity Navigator was founded in 2001 by Pat and Marion Dugan to create “an unbiased and transparent source of information that would assist givers from every state, and with every type of charitable interest, in finding a charity to support.”  It launched its website in 2002 with more than 1100 charities.

Also read: The Nonprofit Starvation Cycle

How can nonprofits interact with CharityWatch and Charity Navigator?

Both use completely independent rating systems. While CharityWatch does not allow any input from the nonprofits it rates, Charity Navigator actively encourages nonprofits to update information on its site. If you are one of the 8,000 or so independently reviewed organizations, you can assign an official representative to be your communications liaison.

Both sites have snazzy labels that you can put on your website to advertise how you score. Donors are much more likely to give to projects that rate highly under any watchdog program, so take advantage if you can!

Your next steps with Charity Navigator or CharityWatch

No matter your size, you can use either service to help you with your branding and your fundraising.

  • Make sure you have information input into Charity Navigator! At a minimum, it is free advertising. If a potential donor is looking for information about you, you want to make sure it is accurate.
  • Check out CharityWatch’s data for organizations that compete with you in your field. What are the A organizations doing that you are not? How can you get there?
  • Make use of their articles and links! Both sites post helpful information about the philanthropic community that can be of use and help you stay informed.

 

>> You may also be interested in finding out about how to get a Guidestar Seal.

 



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