Nonprofit Leadership Podcast

Episode: "Why Charity Navigator Is Seeking to Help All People Give Smarter"

Host: Dr. Rob Harter
Guest: Michael Thatcher, CEO of Charity Navigator
Date: March 1, 2026

Episode Overview

In this engaging conversation, Dr. Rob Harter speaks with Michael Thatcher, CEO of Charity Navigator, about the evolving mission of the nation’s leading independent evaluator of nonprofits. The episode delves into how Charity Navigator is making impactful giving easier for donors and nonprofit leaders, upcoming changes to its rating system, the importance of transparency and data, and the nuanced discussions around nonprofit overhead and donor trust.

Key Discussion Points & Insights

1. Michael Thatcher’s Journey to Charity Navigator

• Nontraditional career path: Started running an arts nonprofit, shifted to technology at Microsoft, focusing on measuring social impact globally before joining Charity Navigator by chance.
  • “You grow up as a kid saying I want to run, you know, the nation's largest independent evaluator of charities... ended up running a nonprofit with my wife… went to Microsoft… got fascinated with impact measurement.” [04:04]
• Applies experience in impact measurement, value systems, and data-driven decision-making to his leadership at Charity Navigator.

2. Charity Navigator’s Mission, Growth & Services

• Mission: “To make impactful giving easier for all.”
• Growth: From 1,100 nonprofit ratings to over 253,000 updated annually over 25 years.
  • “We are now 25 years into this. We have 253,000 nonprofit ratings…” [07:25]
• Services:
  • Ratings on nonprofits’ effectiveness, governance, and impact.
  • Alerts for inappropriate nonprofit behaviors.
  • Curated lists for donors looking to give during crises or to specific causes.
  • New “issue funds” allowing pooled donations to sector-specific causes.
• Approach: Free to both donors and nonprofits, supported by donations from users—akin to Wikipedia/NPR.

3. How To Maximize Charity Navigator (for Nonprofits, Grantmakers, Donors)

• Nonprofit Leaders:
  • Submit as much accurate data as possible—especially beyond just IRS Form 990.
  • Focus on transparent governance (e.g., independent board, whistleblower policy).
  • Highlight both successes and challenges to demonstrate adaptability and transparency.
  • Use the nonprofit portal (charitynavigator.org/portal) to supply data directly and access feedback.
  • “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.” [09:31]
• Data Updates: New system launched in 2026, with data updates every two months after annual cycle. [10:49]
• Transparency: Post your 990 and reports on your website; share both achievements and learning moments from failures.

4. Best Practices for Higher Ratings

• Governance: At least five independent board members, clearly documented policies.
• Transparency: Publicly posted IRS forms and performance reports.
• Storytelling: Share honest stories of adaptability, especially after crises like COVID-19.
  • “Articulate what's going well, but also articulate what's not going so well. Because donors... like transparency.” [13:17]
• Data Integrity: Respond promptly to requests for clarification or additional data.

5. Charity Navigator’s Feedback and Continuous Improvement

• Soliciting feedback:
  • Donor and nonprofit advisory groups.
  • Expert panels providing diverse insights (“donor expert group,” “ratings expert group,” “consultative council of nonprofit leaders”).
  • “We have a donor expert group... and a consultative council of nonprofit leaders.” [15:50]
• Agile development: Adopts rapid iteration and feedback loops for process improvements.

6. Barriers and Solutions in Nonprofit Data Submission

• Previously: Only IRS Form 990 and website reviews—“a limited story.”
• Currently: 52 metrics across 10 data areas gathered; clarity and guidance on what data is required.
• Data collection improvements: Partnership with True Impact to streamline data collection and provide detailed, actionable feedback reports—not just scores.
  • “It’s going to be much more helpful than just the score… they may want to use [the report] internally as a correction tool.” [18:22 – 20:53]

7. The Overhead Debate: Efficiency vs. Impact

• Nuanced perspective: Overhead percentage is not a proxy for impact.
  • “Overhead is not a proxy for impact. It tells you where the money was spent. It doesn't tell you what the money achieved.” – Michael Thatcher [22:55]
• Sector culture: Nonprofit leaders are often highly qualified, underpaid; overhead is necessary to attract and retain talent, ensure long-term success.
• Challenge: Explaining deeper concepts of impact to donors—star ratings aim to synthesize complexity.
  • “We're trying to do this 360 view... a healthy organization, they produce impact.” [24:02 – 26:03]

8. Balancing Data and Donor Emotion

• Emotional triggers: Recognized as critical for giving.
• Charity Navigator’s goal: Balance heart-driven giving with head-driven data—“Follow your heart, use your head, make a difference.”
  • “Causes grab you by the heart... but then you want to see a difference... why aren’t we doing that with our nonprofits?” [27:22 – 28:52]
• Donor engagement: Encourages investing (not just donating), volunteering, serving on boards.

9. Combatting Donor Fear and Declining Trust

• Reality vs. perception: Out of 1.6 million U.S. nonprofits, only “a few hundred” have reported questionable behaviors.
• Problem: Media and a few bad actors have tainted the entire sector’s image.
• Action: Charity Navigator’s alert system quickly identifies problems, especially crucial during crises.
  • “A few hundred [alerts]... does not represent the behavior of the sector... we need to be really loud and proud about the great work...” [32:42 – 34:09]
• Trust data: There’s been a decline in American household giving; Charity Navigator examines how to rebuild confidence.

10. Looking Forward: The Future of Charity Navigator

• AI and technology:
  • Preparing for a future with integrated platforms (AI, LLMs) where Charity Navigator data is accessible wherever people research giving.
• Ongoing challenge: Ensuring trust remains human-centered, even as donor journeys become more “distributed.”
  • “Trust is still human driven... but how do you have scale with humans when machines are so much better?” [37:00 – 39:11]

Notable Quotes & Memorable Moments

• On Charity Navigator’s Impact:
  “We carefully chose the words make impactful giving easier for all. That includes nonprofits. It includes all donors, all types of donors.” – Michael Thatcher [41:06]

• On Overhead vs. Impact:
  “Overhead is not a proxy for impact. It tells you where the money was spent. It doesn't tell you what the money achieved.” – Michael Thatcher [22:55]

• On Donor Emotions:
  “Causes grab you by the heart... that's awesome, right? Stay with it, live with it. But then... you want to see a difference.” – Michael Thatcher [27:22]

• On Transparency:
  “Transparency is the key to everything that we do. It’s really been what we’ve stood for for 25 years.” – Michael Thatcher [13:17]

• On the Power of Nonprofits:
  “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.” – Michael Thatcher [34:09]

Timestamps for Important Segments

• [04:04] – Michael Thatcher’s path to Charity Navigator
• [07:25] – Overview of Charity Navigator today
• [09:31] – How nonprofits can leverage ratings, importance of data
• [10:49] – Details on the new rating system and cycles
• [13:17] – Best practices for improving a nonprofit’s rating
• [15:50] – Donor and nonprofit feedback mechanisms
• [18:22] – Data submission challenges and solutions
• [22:55] – The debate around overhead vs. impact
• [27:22] – Balancing emotional giving with data-informed decisions
• [32:42] – Encouraging an investment mindset in giving
• [34:09] – Data on sector-wide integrity vs. public perception
• [37:00] – The future of Charity Navigator and technology

Final Thoughts

This episode offers essential insights for both nonprofit professionals and donors into how Charity Navigator operates, their evolving standards for ratings, and the cultural shifts affecting giving in America. It underscores the importance of data, dialogue, transparency, and trust while maintaining a human connection to the causes we care about. Dr. Harter and Michael Thatcher advocate for an investment mindset, encourage sector-wide pride, and offer practical steps for nonprofits and donors alike to make giving smarter—and more impactful—for all.

Learn more:

• Charity Navigator for donors: charitynavigator.org
• Nonprofit portal: charitynavigator.org/portal
• Connect with Michael Thatcher: mthatcher@charitynavigator.org