My mom asked me to look up a charity for her, and I’m rather confused by what I’m finding. One rating site, Charity Navigator, gives them a high rating and says that 95% of their income goes to their programs. Another site, though, the American Institute of Philanthropy, gives the same charity a grade of F, citing among other reasons an extremely low percentage of funds going toward their programs. Clearly, someone here isn’t on the up-and-up, but I’m not sure who.
To make matters more muddled, the AIP doesn’t make their full reports available for free: You have to buy a $50 membership to read the reports. That’s a little troubling, but when you think about it, the alternative is even more so: If a charity rating site isn’t getting its funding from prospective donors, then where is it getting its funding? From the charities it’s rating?
Which, if either, of these charity rating sites is reputable? Is there any reputable charity rater that makes their information available to the public?
Both rating organizations are reputable. There is a third run by the Better Business Bureau. Guidestar reviews a greater number of charities, but their process is more automated.
If you specify a charity that you want to evaluate (cleartext or otherwise), I will look into it and report my very humble opinion. I have access to AIP’s publications. Incidentally, they now call themselves CharityWatch. They tend to be the most aggressive of the charity rating outfits.
ETA: I believe Guidestar receives funding from those who are super-jumbo members. I assume foundations fall into that category as their fees are steeper.
Well, the specific charity that prompted the question is the Native American Heritage Association. But I’m still puzzled by how it can receive such vastly different grades from the different raters… Something must be up, there.
The American Institute for Philanthropy says that this group counts as part of the money they use for their program services the salaries for the “disadvantaged Native Americans” who work for them as fundraisers. So if you donate to this charity, what your money is going toward is hiring disadvantaged Native Americans to work as fundraisers for the charity itself, not in any other job:
Charity Navigator does not appear to question the quality of self-reported financial information from charities; Charity Watch is indeed aggressive about this. Check out the following:
In Guidestar’s defense, their robo-ratings cover several times the number of charities that AIP rates. That said, AIP estimates that the Native American Heritage Association spends 42% of its revenue on programs services: their target is 60%. The cost to raise $100 is $49: their target is $35 or less. Overall, NAHA earns a D. Because AIP digs into the numbers, they can uncover such sub-par performance. (See Wendell Wagner’s elaboration.) That said, I’ve seen worse. Guidestar accepts dissembling on these numbers by various charities without adjustment. But Guidestar also makes old IRS 990 forms available free of charge, so you can adjust the figures yourself if you have a sufficiently critical eye.
American Indian organization receiving ratings of A- or above by Charitywatch include the American Indian College Fund and Futures for Children.