← Nonprofit Leadership Podcast
Nonprofit Leadership Podcast
Why Charity Navigator Is Seeking to Help All People Give Smarter
00:42:58
Loading summary
Transcript51 lines
- [00:02]
A
This is Dr. Rob Harder with the Nonprofit Leadership Podcast, Making youg World Better. What does it take to be an effective nonprofit leader today? What are the biggest challenges? What are the biggest obstacles? How should nonprofits fundraise in an economy that is constantly changing? All these reasons combined led me to start this show and it's my hope that through this series, people can learn not only what it takes to be an effective nonprofit organization, but to hear from effective leaders who are successful successfully making a positive impact in their communities. We hope you enjoy the show as together we hear how they are making their world better.
- [00:37]
B
Welcome to the Nonprofit Leadership Podcast with Rob Harder. I'm Lena Larew, based currently in Mexico, and I'm a listener just like you who cares about the nonprofit world and the people leading it. If you're looking to learn and grow as a nonprofit leader, you're in the right place. Thanks for listening. Now here's Rob.
- [00:58]
A
Welcome to the Nonprofit Leadership Podcast. My name is Rob Harder. I'm your host and so glad you've tuned in. Today we've got a really interesting conversation with the CEO of Charity Navigator. Now, my guess is when you hear that name, some of you have a love hate relationship with Charity Navigator. On the one hand, I think most people realize data is important, right? Making data informed decisions is really important, both for the nonprofit organization to have the data and for donors to be able to give money to a nonprofit based on a data informed decision. And that's where Charity Navigator really fits in. Their mission is to help people and organizations make smarter giving decisions. And so perhaps you're listening. You're like, well, I love Charity Navigator. I've got the highest rating for my nonprofit. And great. I know for me, as a nonprofit organization, we always sought to get that top rating from Charity Navigator. Or perhaps you're listening and you're like, well, I got a lower rating than I hoped for. And maybe you're not so happy about Charity Navigator. So here's. I think what will be interesting for this conversation for you is to listen into Michael, who's the CEO. He's been there for over 10 years now. And they keep changing, updating their standards and how they communicate to donors and to nonprofits. He's gonna share a little bit more about their vision and their process of how they come up with the ratings and the thinking behind the ratings. And therefore also, if you don't get the rating you want, they will give you the reason why and they'll, they'll fill in the gaps of here's what you should do or can do to bump your rating back up. So they are seeking to really be much interactive with nonprofit organizations as well as donors. So it's an interesting conversation. I ask a lot of different questions again about how nonprofits, grant makers and individual donors can really use Charity Navigator for what its purpose is to advance their own unique goals when it comes to giving. So I think you're gonna learn a lot and I do encourage you to check out the show notes that are always included in my on my website. If you haven't gone there, just go to the website whenever I post the episode and you can click right on there. And there's lots of different information typically with each episode that tells you more, gives you the background of each story for the guests that I have on the show. So anyway, really interesting conversation again. Michael Thatcher, CEO of Charity Navigator, thanks for tuning in as always. Now onto the show. This podcast is sponsored by DonorBox Donor Box, helping you help others with the best donation forms in the business. Everybody, welcome back to the Nonprofit Leadership Podcast. I've got Michael Thatcher here from Charity Navigator. Michael, thanks for taking time to be on the show today.
- [03:34]
B
Rob, I'm delighted to be here and look forward to getting into all things Charity Navigator with you.
- [03:40]
A
Absolutely. Well, definitely we're going to dive into something. I have a feeling most of my listeners, I think almost everybody in the nonprofit sector has heard about Charity Navigator and probably tries hard to get that seal of approval from you all. And so we're going to get into that. But I always feel like it's fun to ask a little bit about the guest that is on my show to tell a bit about your story. So if you could just tell us a bit about your background, whatever you'd like to share. And then how did you get to the point where you were leading Charity Navigator?
- [04:05]
B
The path to Charity Navigator is a non obvious one and I don't know that. You know, you grow up as a kid saying I want to run, you know, the nation's largest independent evaluator of charities. And I ended up, I started actually running a nonprofit with my wife. It was an arts organization in New York City and did that for about 10 years and spun out of that because we were unable to actually make ends meet with the arts organization. And I spent all my time writing grant proposals and, and not actually doing the art that I was trained in. And what I really wanted to do that led me towards more of a technology career which eventually had me at Microsoft. And for the last 10 years I was at Microsoft. So I spent a long time there. I was working on technology as a lever for social and economic change. And I was doing this in Africa. I was doing it in the Middle east and part across Greater Asia. And I got really good at measuring the effectiveness of the different work that we were doing across multiple timeframes and also value systems. I had the bean counters at Microsoft worrying about quarterly accountability. I had governments that were really pushing for show me the value, how this is changing lives in our country. So impact and all these tensions between saying, hey, we train 10,000 teachers in computer skills. But then, what does that mean? How did that change lives? And so, anyway, that got me fascinated with impact measurement. I left Microsoft in 2014, was beginning to look for new opportunities. And just fortuitously, a nonprofit board that I was on, the leader of that organization, knew Charity Navigator, knew that they had just parted ways at their CEO. And so Charity Navigator and I, we found each other maybe a month or two after they had lost their CEO. So the. Oh, wow. There was no search. It was just one of these really bizarre chance meetings. They wanted someone with a tech background that actually knew what was going on. I was living in Singapore. Oh, wow. Okay. I came back to New York for the. For the Charity Navigator work. And, you know, at the time, we were based in northern New Jersey, and so I was doing a reverse commute out to the office. So it was a. It was a big leap of faith on my part and I think on theirs. And now I'm ten and a half years into it, and I think we're. I think we're doing. We've done a lot in the last 10 years. I'm really, really proud of where we've come and how things have evolved.
- [06:38]
A
Well, I know just. This is, again, an observation from an executive director. I've been part of nonprofits mostly my career, and I definitely have noticed Charity Navigator's presence got larger over these last 10 years. I mean, it was noticeable, actually. And so way to go. Whatever you're doing is working. And I do think measurement and being able to back up your results with data for any nonprofit is so important for donors. And so to have somebody like Charity Navigator helping in that process and helping to. To make sure that nonprofits have a standard to kind of aim for. I know. I think overall, it's been really good for the sector as a whole. Now, I don't want to assume everyone knows all about Charity Navigator, so it may be still good to give just a little bit of background. What is Charity Navigator exactly what is its goal and mission and then again your role and how you've grown this sure.
- [07:25]
B
So I think in a nutshell, our mission is to make impactful giving easier for all. Charity navigator launched 25 years ago with I think it was 1100 nonprofit evaluations. Looking at seven financial metrics. We are now 25 years into this. We have 253,000 nonprofit ratings that we update on an annual basis. So tremendous growth in scale. We also are conducting impact assessments on nonprofits, which is something that I really, that's what excited me about the work was getting to rating impact. We do this for free. Charity Navigator is itself a nonprofit. So we don't charge the donors, we don't charge the charities. But similar to other platforms like Wikipedia or npr, when you're on the platform, we're going to ask you to support us and that's how we sustain ourselves. Just in short, we do ratings, we do alerts. So alerts are sort of when something inappropriate happens at a nonprofit, we let donors know about that. We have curated lists that actually help people in times of crisis or they're looking for the best of the best within a specific program service area. We have those lists and then we recently started something new which is experimenting with what you could think of as issue funds. So we have a fund where it's a collection of organizations. The donor supports the, they make a donation to the fund and that gets distributed to a dozen organizations that are working on homelessness, that are working on veterans issues and, and things like that. So really trying to be a great service to the donor, but also kind of a validation point for the nonprofit.
- [09:12]
A
Okay, that's great overview and I think for, you know, my listeners who are mostly in a nonprofit role, they're on boards, they are grant makers and, or they ask for grants, request for grants. How can nonprofits, grant makers, individual donors even, how can they really maximize Charity Navigator to advance their unique goals of what they're trying to accomplish?
- [09:32]
B
So I think the best way, if you're a nonprofit leader or someone that's working within an organization, what the beauty of the rating is that it's, it's an impartial evaluation of your performance and your effectiveness. What we've tried to do, we're in the process of actually we've, we're updating our system and we have a much more. What we're looking at is more like a 360 degree view of nonprofit effectiveness and organizational health. The best way to leverage the rating is to give us as much data as you can. So we can really paint that 360 degree view. And that's across leadership, it's across your program service area, it's the governance of the organization, it's your financials, compensation processes that you have. And then really also we're looking at impact in more of a cost per outcome assessment that we do based on your specific program service area.
- [10:30]
A
Got it. And so, okay, yeah, if you're a nonprofit leader listening to this podcast, you're like, hey, I really want my charity navigator rating to go up. What are some of the things you already kind of touched on some of those issues? Are there specific things they can do? Are there steps they can take? Can they get a bump in their rating halfway through the year? Is it only an annual process? Maybe talk a bit about that process.
- [10:50]
B
Sure. So the way we're doing things, and just so from a point of clarity, from the first half of this year, because we're rolling out a new system, things are a little bit different. So between, let's say today and the beginning of April, we're piloting the new system, so we're beginning to collect Data. The first 500 nonprofits that submit data through the new system will be part of the pilot. We'll be then analyzing that information. And then in April, we go essentially full production. And everything goes, starts with the. Everyone's getting the new data collection right now. The ratings go live in June. And so this is a really long cycle where there won't be a lot of updates. But after that, every two months we update the ratings. And what that means is we're not changing the methodology. We're updating the based on the information that we've received from the sector. And that's a combination of, I should talk a little bit about data sources. Most of the data for nonprofits, the place to go is charitynavigator.org forward slash portal. And that'll take you right into a login screen where you identify yourself as someone from the nonprofit and then you'll be walked through the whole data submission process. The other data, the other data source, which is, you know, was at our origins, is the IRS form 990 and that we get directly, you know, via the IRS. And so that's kind of the backbone because we get your, your address, your ein number and all of the basic information. And as a part of clarity, some folks may say, but I'm not rated. And I've submitted a 990. It's the full form 990 and we need three years of annual filing, so we need at least three before we can calculate a rating. Everything else is self submitted by the charity. So that's why you've got to go to the nonprofit portal and give us your information.
- [12:47]
A
Okay. This is so helpful. Again, those who are listening, thank you for just laying it out there. Make it really simple. If they start and say you get somebody in there and it's three years, they finally get a rating. And again, it's not kind of the rating they hope for. You've got some best practices I know you encourage, and I think it maybe it's even on your website. What can you recommend today to help improve a nonprofit's performance and impact with some of those best practices so that their rating does go up legitimately because of what they're doing at their nonprofit? What would you recommend for nonprofit leaders if they find themselves in that situation?
- [13:18]
B
Sure. So a couple of things, and some of this is within the 990 filing, or we are. We're a little bit more constrained on, because we're getting the data from the IRS and the donors count on that kind of authentication process. Things in the 990 that sometimes accountants don't fill out. And I think you need to pay attention to those. So it's things like there's some what we would call more accountability practices, like, do you have a whistleblower policy? Do you have an independent board of directors? And this is governance. Right. So one thing we look for, and this is important, you want to have at least five independent board members, if you can. And it's better, you know, when you get started, sometimes board members are friends and family. And so you'll suddenly see a lot of same last names. But as you start growing and becoming, you know, you're, you're beyond that. You want an independent board of directors, you want at least five. And I think that's a governance area. There's simple things like post your 990 on your website. Transparency is the key to everything that we do. It's really been what we've stood for for 25 years. And it's what donors are asking for. They want transparency. They're giving money away, so they want to know that they're giving to reputable sources. And I think that's the key best practice is really, really lead with what you're doing. And I would also say this is important, is like articulate what's going well, but also articulate what's not going so well. Because donors really, they do, they like Transparency. And we're, we've got space for sort of telling your story from an adaptability perspective. This was the metric that came in during the COVID years because that was, it was such an interesting moment to see how leaders showed up in what was one of the most random and challenging situations that happened to so many of us. And there was for sure really beautiful adaptability stories that came out of that whole timeframe.
- [15:14]
A
Okay, so on a donor side, if they're interacting with your website and finding information about various nonprofits they're considering to giving to, or they're a grant maker and they're looking at, hey, we've been giving in the past, we want to see what their latest rating is, what kind of impact, what kind of even questions and interactions do you have typically with donors? Is it pretty simple where they just go online and, and they just get what they need and it's more of a one way directive communication? Or do you end up interacting with donors? Like do you have donors give you feedback? Is there like even a ad hoc committee where you actually get input from donors of what else they would like to see from Charity Navigator? I'm just curious what kind of interaction you have with donors.
- [15:50]
B
I love the question because it's, and I think my answer really relates to both donors and nonprofits because when, when I joined Charity Navigator 10 years ago, we were very much, we were building our system and really sort of pushing it out. And what we realized was we needed feedback. Right. One of the metrics we look for in from nonprofits is how are you using the voices of your constituents to actually understand how well you're doing? And so we started doing. So we have a, we call them expert groups. We have a donor expert group. We have a ratings expert group. We also have a constituent, it's a consultative council of nonprofit leaders, which is a group of about 30 nonprofit leaders from a wide variety of different types of nonprofits. We're really trying to diversify who we get feedback from. So tiny nonprofits to mega charities. And it's a two year engagement with us and we meet on a regular basis. So the whole new, the new rating system that we're launching right now is a combination of best practices, good academic research, feedback from the sector, feedback from donors, what they're looking for, what they're frustrated because they can't find it on our website. So how we make it easier for them to find things. And so that's, that's kind of just built into the whole ecosystem right now. And it's become a much different process. The other piece, and we sort of borrowed this from the software world, but we're using more of an agile development process. So it's, it's kind of quick iteration, getting feedback and then fixing your mistakes. Right. And so I think that. And when you talk to people, you get to find out pretty quickly what they like and what they don't like.
- [17:36]
A
Now good to hear that you're getting ongoing feedback from donors. I think that's excellent to know. I think that's actually pretty interesting. I think it makes sense and it's going to make, you know, you more relevant and continue to be more useful. Right. To donors and of course, the nonprofit leaders on the other end. Okay. When it comes to nonprofit organizations that have struggled to get their rating up or they struggle to get the information that you need to really make a data informed decision on a rating, what are some of the struggles that they've had? Like what are, or I should say, what are some of the solutions you've come up with in terms of gathering better data? Maybe some collection of information. What have you seen as some of the common barriers that have kept people from really getting that rating they needed? But it's more on the nonprofit's end of just not getting you the right data. What does that look like for somebody who is again, kind of stuck on
- [18:23]
B
that lower level in terms of data submission? And again, this I'll sort of answer in a historical context. We initially really only looked at two things, which was one, the IRS form 990 and the organization's website. And that tells a very limited story, but it's a story that people learn to work with. And what we've done now, there are actually 52 metrics that kind of fall into 10 different areas of data collection that all roll up into the, into the overall rating. That means it's a much broader set of metrics. And I think the weakness has been people aren't necessarily submitting the data. The weakness on our part was clarity of what is it that we're asking for, how are we collecting it? And then the other thing that's really challenging is that if we're collecting it and there's errors in the way the data has been submitted, sort of the back and forth between submission correction. Can you give me more data fixing that has been something we've spent the last couple of years on. And in fact, we're partnering now with an organization called True Impact that is helping us with streamlining that data collection process. And so with what really is launching in real time is that it's going to be easy and error free to get the data into the system so that we're able to give you a really, not just a, you know, a better rating but a representative score of who you are. The other piece in this, and this is, this is cool and it's new and so I can't really, I don't have a, you know, I wish I had an example to show you, but True Impact issues a report on your score. And so what we haven't done in the past was actually tell people why'd you get the score you got. We just, we've just given the score, right. And like you figure it out. So that's changed and it's much more, you know, it's the kind of, it's the kind of report that I think charities are going to be proud of and nonprofits will want to, you know, when they have a, when they have a strong report, they're going to want to share that with their donor base. I think if it's not a strong report, they may want to use it internally as a, as a correction tool. But it's going to be much more helpful than just that. You know, just the score that gets updated and then now what do I do?
- [20:53]
A
No, that's, I'm great, great to hear that kind of feedback again that you must have received in order to give more feedback to the non profit of why they got the rating they did. I think that's super helpful because that, that does feel very much like you're shooting in the dark if you don't know why you got the rating you did. And maybe you're not happy with it, but if there's no explanation, you don't know what to do to approve, improve or to change. So I'm really glad to hear that. That sounds like a great improvement again on the non profit side. I think people will be really glad to hear that. Okay. Another thing that is a bit, I would say it's controversial in many ways. Picture this way, it's ironic. I just had recently on my show a gentleman named Dan Palata. You probably know Dan or you've heard of Dan, right? He's the. Yeah. The most recent movie was he made was called Uncharitable and he makes this big push and I think he has a really good argument when it comes to finding a balance of how much money you invest in your staff and what typically is called overhead. And here's the struggle, right. And here's the Tension, I think we live in. Donors, on the one hand, don't want to have this huge overhead and all these administrative costs to a nonprofit because they want to go to the programs of that nonprofit and actually to get to the people they're trying to serve. And I would 100% agree with that. At the same time, Dan would argue there's times where it's. There's such an emphasis on that that donors aren't even willing to really fund and attract the right kind of staff in order to have an effective, powerful nonprofit that's really making a difference and moving the needle on whatever issue they're focused on. And sometimes that does take a little bit of money on marketing, which would be considered overhead, or investing a little bit more in your staffing so you can attract the best and brightest people to help, you know, grow your nonprofit to address these big issues. So where have you landed on that? Because I know that is a tough one. Of what is that? Is there a perfect balance? Is there a right percentage? Because I do think sometimes we go one way or the other, and I think there's a disagreement in many circles of what is the right percentage. Right. When it comes to those things. So tell me about your conversations and what kind of. What's your take on that conversation, that tension?
- [22:56]
B
Sure. And needless to say, Dan. Dan and I have become friends over the years, and we periodically will. I would say, we debate. But we're. You know, I think he has. He has a very strong position, I think, where ours is a little different. But we're. We're very aligned on a couple of things. One is overhead is not a proxy for impact. Right. Just categorically not a proxy for impact. It tells you where the money was spent. It doesn't tell you what the money achieved. That's really important. I think the other thing.
- [23:25]
A
That's a good distinction.
- [23:26]
B
Yep. Yeah. I think the other thing that Dan touches on, that actually some of this is going to be visible within the new rating system, is looking at compensation of staff and your internal workplace policies for how you set salaries, how you track salaries and things like that, and that it's super important. I think one of the biggest challenges that we have in the sector is that you can't keep good people because at a certain point in time, life kicks in. I mean, look at my own history. Right?
- [24:02]
A
Exactly. That's right.
- [24:03]
B
I left the sector because I needed to make money. I've got three kids, and I had to support a family, and I wasn't able to do that as a struggling nonprofit leader. Right. I think we don't pay anywhere near what it takes. But I think it's hard because here's another piece that, and I don't know that I haven't gotten into this with Dan, but it's something. And I think you and I, even in the way we've been talking, we've been dancing around the word nonprofit and the word charity. The word charity is. It has an implication of giving away. It's not necessarily thought of as people doing charitable work are not necessarily PhD professionals that are cutting edge leading their field. The reality is nonprofit leaders are often PhD cutting edge and they're making a tenth of what they would make if they were in the for profit sector. That's a longer time frame to fix that. I think what we're trying to do with our ratings is move people to look for impact and looking for effectiveness. And I think that's what we're trying to capture the problem. Overhead's a single metric. It's a percentage. It's super easy to get your mind around talking to someone about out impact and counterfactuals and RCTs and everything that goes into a really serious impact assessment. That's evidence based. That's complicated. And the average donor doesn't necessarily have the time or the interest to go into it at that level. I wish we had a single metric that would just say this is it. But I think so what we're trying to do is say we're doing this 360 view. It's a healthy organization, they produce impact. And we're giving a simple rating of a star and that's standing. The star is standing for a proxy for an impactful and effective organization.
- [26:04]
A
Well, I appreciate that answer and I get it. It is. There's a lot of nuance to it. Right. And every organization's a bit different and the scope of each organization is a bit different. So therefore even what one nonprofit can even expect to pay and or receive on the other end is totally different than another one. Depends on what their mission is and you know, the size and their scope so related to that. And I think you're getting to this. And I think this is where it's so important for donors. Giving to a nonprofit or a social impact organization or to a charity. It's very emotional for donors. Right. There's often an emotional attachment or the mental mission that nonprofit is all about. Someone is very drawn to that particular mission. So they are giving often in response to emotion. Maybe you could talk A bit more about your approach and how you're. What you're trying to do is not eliminate that emotion at all because that's a great draw, right? For someone to be passionately committed to a cause and they're going to give to it financially. But you're really trying to bring in this data. So it's not just all emotion. You've got some data points, you've got a little bit more. More of a balanced approach of why you should give to these nonprofit organizations based on the data you've given. So how do you seek to balance that, right. Where you kind of maintain that emotional connection. That's important. But you do provide all this data and measurements that tends to be maybe a little less emotional, if you will, and non emotional. So talk about that a little bit.
- [27:22]
B
It's super tricky, right? Because you can. That emotional hook is usually what. That's the catalyst for beginning. Right. You know, and I like to. I've got a mantra that's kind of been a catalytic in my life and it's, you know, follow your heart, use your head, make a difference. I use that also when I think about giving. It's like you're. Something triggers you. And I had a. I met a. I met a donor blanking on his name right now. But he said to me, you know, causes grab you by the heart and you're like, it's just there. And it's like, I gotta do something about this. That's awesome, right? The power that's in that moment. Stay with it, live with it. But then get angry or get. Fall in love, get passionate. But you want to see a difference, right? It's more than the warm glow of like writing a big check, right. It's about seeing the change and what that means. And I think this is something that I'm. I have a couple of sort of little private agenda items that I have, and one of them is moving away from the word, move away from giving. And talk about investing, because when you invest in a company, you follow it because your money's there, right? Why aren't we doing that with our nonprofits? Right? I'm investing. I want education for a certain segment of the population. I'm giving money to it. Why am I not tracking that the same way I'm tracking my Nvidia stock? Right? It's like, come on. Right?
- [28:51]
A
Yeah, absolutely.
- [28:52]
B
They're just as important for different reasons. And so I would say that to me, is the way I try and get people excited about it. And I think the, the way you keep the emotional hook is by doing more than just writing checks. It's also volunteering, it's joining a board, it's engagement with it. And I think this is the other thing where I think metrics sometimes and ratings and, you know, I'll point the finger at myself. They're not, they're not static, right? And these problems, big social problems are. They're big social problems, right. They take time. They're not going to get fixed in a month. It's not a new pair of shoes. Right. And so how do we've got to sort of accept that? And when you get close to a charity and see what they're working on and get into the communication with them, you suddenly understand, oh my God, this is a big deal. And guess what? Chances are you're going to get more money and chances are you're going to see them hit a bad year and not abandon them, but actually say, how can I help out? Because that's the other thing. If you're using the ratings in a punitive way, you've missed the point.
- [30:04]
A
Okay, I like that. That's a great point.
- [30:07]
B
This is not a static world that we're in. These are long, hard issues. I mean, I don't know anything. I don't know anything that has a quick fix to it.
- [30:19]
A
We'll be right back. Are you looking for an easy and effective way to boost your nonprofit's donations? Well, look no further than Donorbox, the online fundraising platform that streamlines your fundraising efforts, maximizes donations and simplifies giving for your supporters. With Donorbox, you can create beautiful donation forms, accept digital wallet payments, track donations, and send auto receipts. And the best part, there are no setup or monthly fees and no long term contracts required. So what are you waiting for? Visit donorbox.org today to get started. That is www.donorbox.org. You just said something really powerful. I think you're absolutely 100% right that you don't want to use Charity Navigator's ratings as a punishment against any nonprofit. I think that's really a brilliant insight because I think it's, I think there's a worry and a fear on the nonprofit executive director side or the board of that nonprofit on this side of the nonprofit. Right. They're like, oh, people are going to punish us based on our rating. But I like that you said that that's not the case. It shouldn't be anyway. And then the second piece, I thought it was so interesting, mentioned investing and we should think about not just giving to nonprofits but investing in nonprofits. I think you're right. In fact, I think there's. That's really shifted in the last few years. Even more so where people say it all the time now, much more like, I've invested in this nonprofit or I've invested some dollars over here in this mission or this cause. And I think you're right, though, that is a better way to look at it and to understand that's where donors are coming from. And certainly when you start looking at these next generations coming through and people that have money, maybe even some of these tech startup, you know, billionaires that have a lot of money to get give boy, they are looking at it as another investment in their portfolio, so to speak. Right. They want to see results. They want to see, you know, human capital return, not financial return, but they want to see a return for their investment. They want to see, you know, impact in the world. So anyway, I'd like that you've got that emphasis and I think that's a good thing to. That nonprofit leaders need to embrace that.
- [32:18]
B
No, I think it's. It changes the game and it gets us out of looking at financial efficiencies. Right? It's. You're showing me a life saved versus a multiple of, you know, if my, my $10 turned into a, you know, some, some. A bigger number. Right? It's so much more, it's visceral. I can, I can take that home. And it feeds my heart. Right, because you gotta.
- [32:42]
A
Exactly.
- [32:43]
B
You've gotta feed both. Right? In other words, you wanna. And I think going back to something, you know, you were saying before, which is a lot of times, and this, I, this makes me sad, but a lot of times people come to us in fear. They're afraid of getting ripped off. Right now our data shows we've got ratings on over 250,000 organizations. There are different levels of effectiveness in that, but we also have an alert system which only has a few hundred questionable behaviors. Right? So a few hundred. And that's across the full 1.6 million US nonprofits, right? So a few hundred that we've found that, you know, something bad happened or something, or there's an accusation of something bad happening. So there's, there's so little wrongdoing, willful wrongdoing, yet there's such an augmentation of that fear. And this is, you know, this gets compounded in the press and it's gotten, you know, in the last year, it's gotten actually leveraged and used against the sector in a way that is, it does not represent the behavior of the sector. And I think we need to be really loud and proud about the great work that millions are doing through the nonprofit sector. It's such a core part of our national narrative and who we are as Americans, we cannot lose this.
- [34:09]
A
I'm so glad you mentioned that because you're absolutely right. I've definitely sensed that just this past year. I feel like, particularly the American context, there is this sense that because there are a few bad apples, so to speak, out there that have not used their funds well, it's painted this broad brush against all nonprofits. They're all like that. And I'm so glad to hear there's actually data to back up what I've always sensed to be true as well, that by and large, the majority, the vast majority, in fact, non profits and social impact organizations are doing really good work and are doing it above board and with great ratings and with, you know, the, the utmost of intention. So that's really good to, to hear that. I do think we need to pro do a better job of getting that out there because I think the narrative has changed in the American context specifically, and people are souring on giving to nonprofits a bit.
- [34:56]
B
They are. And you know, there's a decline in trust. And I think there's been a, there's been a decline in trust across all institutions, but it's affecting the nonprofit sector right now. And it's, you know, just in terms of the work we're doing at Charity Navigator, we're studying this right now because it's. Our mission, is to make impactful giving easier for all. There are less American households that are giving today than there were 25 years ago. Significantly less. Right. What's going on? We've got better systems for measurement, but people are getting scared. And yet the data shows that the sectors actually has integrity, has varying degrees of effectiveness, but is generally not fraudulent. And the other thing, and I think this is the part that makes me angry and I think, you know, bad actors are bad actors. They're not going to take the time to become a 501c3 nonprofit. They're just.
- [35:51]
A
Yeah, good point.
- [35:52]
B
Right. Crooks.
- [35:53]
A
Right.
- [35:53]
B
They're stealing your money. And the problem is a lot of times when somebody steals your money, you don't know they were bad.
- [36:00]
A
Right.
- [36:00]
B
And because it takes a while for the, you know, for the police forces that, you know, the different agencies to actually shut down these bad players. And guess what? They do show up during times of crisis. And so I think that is from a pure value for donors in a time of crisis. That's where you want to go to a third party platform like Charity Navigator, BBB Wise Giving Alliance, Candid. Go to one of us because we're going to give you that list of great organizations that's doing work in the crisis and you're not going to get played by a crook. Right. And so I think that's where I think we become super valuable. Is it, you know, giving season, times of crisis. It's why we're here, it's our mission.
- [36:44]
A
Well said. Well, as you look into the future, what are you going to see for Charity Navigator in the future of where do you see your organization going particularly with the changes in AI and technology and let alone just our world's changing so quickly, you know, where do you see the future of Charity Navigator and organizations like yours?
- [37:00]
B
So I think it's gotten really hard to do future predictions and because of the speed with which things are changing right now, I think, you know, one of the, and it's funny, we're in a, we're in the midst of a strategic planning cycle right now and one of the questions we're asking ourselves is sort of what is the future of Charity Navigator if there are no more websites and we're no longer if we're not a destination, how do we continue to add value? Sort of by being where people are and that's showing up in the different LLMs and so making sure that if you're, you know, you're doing your charitable research on ChatGPT or Gemini that we show up there and so we're, that's something we're focusing on. I can't speak to the when but I think that things are moving to a new paradigm. We're trying to position ourselves to be a part of that because I think trust is still human driven. When you look at the way information's being manipulated, trust is being compromised by doctoring with AI. Is there a human validation point? And so I think that's something that how do you have scale with humans when machines are so much better?
- [38:17]
A
Right, and that's a good question. Exactly. That's right.
- [38:21]
B
One of the things we're debating but I think it's a right now what we're looking at is how do we will probably have some form of destination but then there's this more distributed model and I think most of the players are looking at that right now because it's honestly we're all, there's a disintermediation happening right now, which is disconnecting us from direct contact. And that's not bad. It's just reality. How do I maintain contact and go back to some of the emotionality we were talking about? At the end of the day, there's still people that are starving, there's still people that need education, they have ailments. And so we've got to still be able to address these things in a humane and compassionate way. And so I'm not planning to go away anywhere, anywhere soon. And so it's just a question of figuring out what's the next iteration.
- [39:11]
A
Well, again, it sounds like it's been a perfect fit for your background, your experience, your love for data collection. So again, thank you for sharing all your insights today. And I think for my listeners, I think this has been really helpful. Again, if they didn't know much about Charity Navigator or they wondered about what is the process for getting the rating you do. Thank you for sharing some of that. I know for my listeners I'm going to put a bunch of links in our show notes so you can just click on those links, find out a little bit more information about Charity Navigator. But in the meantime, Michael, if they want to connect with you personally or if they want to find out a little bit more about Charity Navigator, where would you send them?
- [39:43]
B
So for Me Personally, it's mthatcheritynavigator.org for Charity Navigator in general as a donor. Just go to charitynavigator.org if you're a nonprofit and you want to have access to the port portal and give us information. Also, if you're a four star charity, download your your logo kit so you can promote your four star rating. Go to charitynavigator.org portal.
- [40:08]
A
Okay. Okay, great. Well, again, this has been such a fascinating conversation. Thank you, Michael, for sharing all that you're doing there at Charity Navigator and thanks for what you're doing because again, I liked your, you said this with your mission, you're trying to make it easier and help donors make more well informed decisions of where they're giving their money. You're not trying to punish nonprofits. You're not trying to be the bad guy. Right. And so I love that and I think that sometimes people misunderstand maybe the purpose even of Charity Navigator and hear a bit more about that. And I think at the end of the day when we're talking about this context we're living in now where people are losing trust even more and again, we're getting caught up in the waters of lots of distrust and in all institutions, even more important that you're able to speak for nonprofits, say no. People are doing things again. Vast majority of nonprofits are doing it right. They're doing it with integrity. I love that message. I think for my listeners you need to hear that too. And so anyway, thanks for being on the show. Really appreciate you sharing your insights, Rob.
- [41:06]
B
Thank you. And we carefully chose the words make impactful giving easier for all. That includes nonprofits. It includes all donors, all types of donors. And it really is. Yeah, it's gotta be easier to have impact in the world. Let's do it and let's invest in that impact.
- [41:24]
A
Well, good stuff. Thank you again. And for my listeners, I encourage you again, check out charitynavigator.org and if you're for some reason your nonprofit is not on Charity Navigator, definitely go to the portal. I think it's a great idea me being a leader of a nonprofit for many years. We've always done that, we've worked with Charity Navigator. Getting that rating does make a difference. It really does. I mean, I can't tell you how many donors are like really glad to see that seal of approval and those the star rating. You know that you're doing everything you can to be above board and really have a well run organization. So it does make a difference for donors. If you're a bit skeptical of why even get involved with Charity Navigator, it makes a difference for your nonprofit and as you said, Michael, it helps it be much more of a well informed and easier process to give to you a nonprofit organization. So again, so glad you tuned in today. It's a fascinating conversation and we will see you next week. Hey friends. Well, I wanted you to know that this podcast can be found on itunes, Spotify, Amazon, Google podcasts and wherever you listen to other podcasts. I also want to encourage you to like subscribe and share this podcast with others. This will actually help us get this great content out to more nonprofit leaders just like you. You can also join the nonprofit leadership podcast community, find other resources and interviews of past guests, all on my website, nonprofitleadershippodcast.org well, thanks again for listening and until next time, keep making your world better. This podcast is sponsored by DonorBox, DonorBox, helping you help others with the best donation forms in the business.