Why is Charity Navigator so Important? (a must read for all nonprofits)

Posted by on Nov 29, 2011 | 1 comment

It’s tough to be an outsider looking in. And typically I’m not one to judge, but when Charity Navigator posted their 10 Celebrity-Related Charities list, I was both pleased and disappointed.

As the pre-list content spells out on the Charity Navigator webpage: Celebrity endorsements help charities increase awareness of their endeavors and thus stimulate more donations. However, just because your favorite super-star supports a charity doesn’t mean the charity is well-run and worthy of a contribution from you.

Hear, hear.

At the top of this year’s 10 Celebrity-Related Charities list at #1 is Michael J. Fox’s Foundation for Parkinson’s Research receiving four stars, the highest score possible. Kudos to their team! They have audited financials, an appropriately involved board of directors, transparency, and appropriate funding to programs – a donor must.

The mission of the Michael J. Fox Foundation is to find a cure for Parkinson’s disease through an aggressively funded research agenda and to ensure the development of improved therapies for those living with Parkinson’s today. You can make a donation to this foundation here.

At the #9 spot (out of 10) on the same list is Andre Agassi’s Foundation for Education, with a dismal and disappointing one star rating.  Not so impressive. This caught my attention for several reasons:

  1. Location – the Andre Agassi College Preparatory Academy is headquartered in my neck o-the woods: Las Vegas, Nevada.
  2. Salary to Effectiveness ratio – with COO compensation nearing $200K, it seems that someone would be on top of their charity navigator rating. But “someone” is not.
  3. Financials – with net assets of over $71,000,000 the organization’s financial rating at Charity Navigator was below 50%. In my book (and any teacher’s book), that’s a FAIL. They don’t have audited financials (scary in any nonprofit situation), etc. And their overall rating was 37.5%.
  4. Celebrity – both Andre Agasi and Sir Elton John are tied to this foundation.
  5. Minimal transparency.
Their stated mission on their official website is “The Andre Agassi Foundation for Education is an educational organization dedicated to transforming U.S. public education for underserved youth. The Foundation drives reform by engaging in practice, policy and partnerships that provide quality education and enrichment opportunities.” So they have a worthy, respectable mission. So what’s up? They’re missing the boat when their Charity Navigator rating is so low.
Why is the Charity Navigator rating so important? The nonprofit world is filled with wonderful, giving people who dedicate their lives to a passion. Unfortunately, the same nonprofit world attracts those who are not so dedicated, and sometimes not so honest either. Charities have long been a sometimes easy target for the less than above board. Admission, donations, raffles, ticket sales and other cash transactions, if not properly documented, are considered fair game by those who embezzle.
From the Charity Navigator website home page: Charity Navigator, America’s premiere independent charity evaluator, works to advance a more efficient and responsive philanthropic marketplace by evaluating the Financial Health and Accountability and Transparency of America’s largest charities. Charity Navigator was recently selected as the Best Charity Review Site in Kiplinger’s Personal Finance Magazine’s “The Best List 2011“. 
The good news? Often charities are more lazy than illicit and a low rating will  (hopefully) inspire action causing the organization to correct the negative issues in their review and gain a higher rating. It’s often a matter of bookkeeping, not dishonesty or mismanagement. I hope that’s the case for the Agassi group. They have a valiant and critical mission, and I’ve always liked Agassi. And Sir Elton John too, for that matter.
But a poor rating is not something I can overlook simply because I like the mission and the people involved. Nor should you. Nor should they. Let’s hope the get it together soon.
If your organization is not paying attention to Charity Navigator, you need to. Check out their site today.
For more information on How To Choose a Charity, click here.
For the Top 10 Lists on Charity Navigator, click here.

1 Comment

  1. That’s very sad about Andre Agassis charity, I mean he’s such a great athlete and he seems like a big time giver. i just don’t know why some charities keep that much money. There is so much power in lifting burdens by giving most of the money back to the sick or hungry.

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