How Your Charity Measures Up

Wealth Management

How Your Charity Measures Up

Donors now have more tools to ensure their money is well spent.

A new rating system makes it easier to verify that your donations are going to a worthy charity. Charity Navigator has long been the arbiter of charities’ bona fides. Its new 2.0 rating system now measures accountability and transparency as well as financial health.

SEE ALSO: 6 Things You Need to Know About Giving to Charity

Seventeen new gauges were added, such as whether a charity has independent board members, a conflict-of-interest policy or a board audit committee. CEO Ken Berger says the ratings help people assess the risk of donating to a particular charity. “If an organization doesn’t have these policies and practices, then even if it’s financially healthy there’s a higher risk that your contribution may not be spent as you desire.”

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When Charity Navigator applied its new system to the nearly 5,500 charities it evaluates, results were mixed. Scores changed for half of the organizations. For 60% of those, the change was positive, and there was an 8% increase in the number of charities with a three-star (out of four) or better rating. But 40% of the 1,200 top-rated charities saw their ratings drop.