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Presentation given by Charity Navigator's President & CEO, Ken Berger, at the Valuing Impact conference in London. This was the first international gathering dedicated to exploring nonprofit analysis, and an important first step towards creating an Association of Nonprofit Analysts.
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A Conversation About Measuring Impact
Presented by Ken BergerPresident & Chief Executive Officer
at Valuing Impact Event
London, UKMay 19, 2009
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Charity Navigator’s Current Impact
Estimated 3 million distinct visitors per year (4 million + hits)
92% say CN ratings affected their decision to support individual charities
CN ratings influenced approximately $10 billion in donations in 2008
2002 2003 2004 2005 2006 2007
Years
Growth In Website Usage
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1. Administrative Expense2. Fundraising Expense3. Program Services Expense4. Fundraising Cost to Raise a Dollar5. Program Growth Rate6. Revenue Growth Rate7. Working Capital
SEVEN VARIABLES MEASURING FINANCIAL HEALTH
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WARNING IN USE OF OUR DATA• To make wise giving decisions, our ratings are a
"part of the puzzle".
• Be Proactive In Your Giving - Smart givers ... have targeted outcome goals for their giving....
• Start A Dialogue To Investigate Its Programmatic Results - assess a charity's programmatic impact, talk with the charity to learn about its accomplishments, goals and challenges. Be prepared to walk away from any charity that is unable or unwilling to participate in this type of conversation.
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THE PROBLEM
• Some donors are not taking the additional steps we recommend to assess outcomes
• They are relying almost entirely on our ratings. • While we assume that financially strong
organizations are far more likely to be effective in their outcomes, it may not always be the case.
• Alternatively, charities with mediocre financial strength may not necessarily have mediocre outcomes.
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1. Financial Health
2. Accountability & Transparency
3. Outcomes
THE SOLUTION: 3 COMPONENTS OF A NEW
CHARITY EVALUATION SYSTEM
7www.alleffective.org
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A SCARY FINDING ON OUTCOME MEASUREMENT
• We have been testing out what information charities are currently compiling in the area of outcome measurement.
• We assumed that most charities have SOME system of evaluating their outcomes.
• So far, less than 10% of the charities we have polled have provided us with meaningful information in this area.
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HOW CHARITIES CURRENTLY “RATE”All
4-Star Excellent 30%
3-Star Good 36%
2-Star
Needs Improvement
23%
1-Star Poor 9%
0-Star
Exceptionally Poor
2%
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All
4-Star Excellent 2%
3-Star Good 9%
2-Star
Needs Improvement
23%
1-Star Poor 36%
0-Star
Exceptionally Poor
30%
HOW MIGHT THEY RATE ON OUTCOMES?
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AN INTERIM SOLUTION?CONSTITUENCY VOICE
Promoters – Detractors =
NET PROMOTER SCORE
www.keystoneaccountability.org
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Our Web Addresses Website-www.charitynavigator.org
Blogs-www.kenscommentary.org
www.charitynavigator.org
Email- [email protected]
Twitter- kenscommentary
