Charity Navigator’s New System For Rating Small Nonprofits

Nov 22, 2021 | Not-for-Profit

Donation

Charity Navigator is the world’s largest independent evaluator of nonprofit organizations.  In July of 2020, the organization released the Encompass Rating System which now allows it to evaluate smaller nonprofit organizations that do not meet the revenue and experience requirements for the Star Rating System.  The Encompass Rating System now gives donors a new rating tool to ensure their contributions are being put to good use towards small charities and give the smaller nonprofit organizations the ability to promote their effectiveness.

What is new about the nonprofit rating systems?

Charity Navigator’s original Star Rating System will continue to be the rating system for all organizations that meet the eligibility requirements which include a minimum number of years in operation and minimum revenue amounts.  With the broader requirement for the Encompass Rating System, Charity Navigator has rated over 161,000 new charities.

How does the Encompass Rating System work?

Encompass Rating scores a nonprofit organization on a scale from 0 – 100.  Charity Navigator recognizes scores of 75 and higher as effective and gives these organizations a “Give with Confidence” badge on the Charity Navigator website.  These organizations can also advertise this by displaying the badge on their own platforms.

Encompass Rating calculates a total score by evaluating the four “beacons” which are key performance indicators of the nonprofit’s impact effectiveness:

  • Finance & Accounting measures financial health, stability, efficiency, and sustainability.
  • Impact & Results evaluates the cost effectiveness and delivery of the organization’s program.
  • Leadership & Adaptability assesses the development of the organization’s leadership as well as its ability to respond to external changes.
  • Culture & Community evaluates the organization’s engagement with the beneficiaries of its programs.

Future Updates to the Rating System.

Charity Navigator updates each nonprofit’s ratings three times a year.  With the results of the ratings, donors and charities can consider the overall score or evaluate the scores of each individual beacon.  Charity Navigator may change or add to these beacons in the future based on external feedback.

For updates and news on Charity Navigator’s rating systems please visit charitynavigator.org.

We understand not-for-profit needs. Contact an MCB Advisor at 703-218-3600 or click here. To review a summary of recent articles related to exempt organizations, click here. To learn more about MCB’s not-for-profit practice and our experts, click here.

Subscribe to the MCB Blog and get all new MCB blog posts sent directly to your inbox.

Recent Posts

Archive Posts

Subscribe Now

Don’t miss a thing! Get all new MCB blog posts and insights sent directly to your inbox.
Loading
X