Nonprofit Leadership Podcast · Dr. Rob Harter

Why Charity Navigator Is Seeking to Help All People Give Smarter

·43 min·3 clips

Charity Navigator rates over 250,000 organizations but finds only a few hundred questionable behaviors.

1. The Nonprofit Leadership Podcast episode “Why Charity Navigator Is Seeking to Help All People Give Smarter” examines Charity Navigator's changing approach to nonprofit evaluation. 2. Host Rob Harder interviews Michael Thatcher, Charity Navigator's CEO, whose background includes leading an arts nonprofit, working at Microsoft, and measuring technology's social impact across Africa, the Middle East, and Asia. 3. The episode asks how donors, grant makers, and nonprofit leaders can use Charity Navigator ratings to make more informed giving and organizational decisions. 4. Thatcher says Charity Navigator launched 25 years ago with 1,100 nonprofit evaluations based on seven financial metrics. 5. He says the organization now updates 253,000 nonprofit ratings annually and has added impact assessments. 6. Charity Navigator also provides alerts, curated crisis lists, and issue funds that distribute donations among organizations addressing areas such as homelessness and veterans issues. 7. Thatcher describes a new rating system with 52 metrics grouped into 10 areas of data collection. 8. The new system draws on IRS Form 990 filings, nonprofit-submitted information, governance practices, compensation processes, and program-service data. 9. Charity Navigator requires three years of complete Form 990 filings before calculating a rating, according to Thatcher. 10. Thatcher says the organization is piloting the new system with the first 500 nonprofits that submit data and plans to update ratings every two months after launch. 11. He recommends that nonprofits maintain at least five independent board members as they grow beyond friend-and-family governance. 12. He also recommends posting Form 990 filings online and describing both successful and unsuccessful work because donors value transparency. 13. Charity Navigator is partnering with True Impact to streamline nonprofit data submission and reduce errors during corrections. 14. Thatcher says True Impact will provide reports explaining why a nonprofit received its score, rather than presenting only an unexplained rating. 15. Thatcher states that overhead is not a proxy for impact because it shows where money was spent, not what the money achieved. 16. He connects compensation and workplace policies to the nonprofit sector's difficulty retaining skilled leaders, citing his own departure from nonprofit work to support three children. 17. Thatcher encourages donors to follow their emotional connection to a cause while using data to assess outcomes, engagement, and effectiveness. 18. The interview also addresses declining trust, fewer American households giving than 25 years ago, and the possibility that Charity Navigator must add value inside large language models rather than only through its website. 19. Nonprofit leaders, grant makers, and evidence-minded donors. 20. Listeners seeking personal stories or purely emotional appeals.

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