We give each nonprofit the opportunity to review our rating prior to publication whenever possible. Nonprofits can correct our numbers, add a public comment and leave general feedback. We do our best to find a contact at the nonprofit to share the rating with, although we do not always succeed. If you would like to review your rating, contact us.
We rate “service delivery” nonprofits, i.e., nonprofits that deliver a program directly to people to achieve a specific health, anti-poverty, education or similar outcome.
Nonprofits can get funding from individual contributions, foundation and government grants, investment income and other sources. Because the audience for our ratings is donors, we only rate nonprofits that receive at least some funding from individuals or foundations. A nonprofit that is less reliant on donor dollars is neither worse nor better; just less relevant to donors seeking guidance and confidence when giving.
We do not rate two types of nonprofits: (1) advocacy and research nonprofits; and (2) “donor use” nonprofits.
Advocacy and research nonprofits. Nonprofits that seek systems change through advocacy, research or similar activities may be highly effective, but they are much harder to measure. The link between the nonprofit’s work and the final outcome is longer, and often there are alternate explanations for why that particular piece of legislation passed or those minds changed. We do not (yet) have a good method for consistently estimating the impact of these programs, and so we do not issue ratings for them. We hope to add these in the future.
"Donor use" nonprofits. For some nonprofits, the donor herself is a user of the nonprofit, e.g., religious organizations, community associations and most arts and culture institutions like museums. We neither encourage nor discourage donating to such nonprofits; we just do not rate them. With these “donor use” nonprofits, the donor’s decision to donate is largely driven by her personal experience with the nonprofit. As such, we do not see the same value-added from applying our methods to such organizations.
To increase accuracy and comparability, and maximize efficiency, we rate one type of intervention (soup kitchen, etc.) at a time. As a result, we cannot rate individual nonprofits. However, if you are interested, send us a message - if we get interest from enough similar groups, we will prioritize the program type.
We apply a simple test: Does the nonprofit spend at least 65 percent of its total costs on programs? If a rated nonprofit passes this and other basic tests for financial health, it earns at least 2 stars and can be considered for more stars based on impact transparency and cost-effectiveness.
You may appeal your rating or share additional information with us. We do not give the option to opt out of a public rating. However, if our analysts conclude we are misrepresenting your impact, we will withhold the rating.
Yes. Today, there are few incentives for nonprofits to publicly share high quality impact data. Our ratings meet nonprofits where they are. In the future, we will be enhancing our ratings to better capture and communicate nonprofits' impact.
We analyze programs one at a time — for instance, if a nonprofit runs both a job training program and a family counseling service, each is analyzed separately. For nonprofits that run multiple programs, this generally means that costs must be disaggregated by program, or at least by thematic program area (e.g., Employment Programs). Otherwise, we are unable to provide a rating.
We issue a rating if our analysis of one or more programs collectively covers at least 15 percent of a nonprofit’s work (measured as a percentage of total program expenses). Analysis of multiple programs can be combined into a single star rating for the organization.
Many large nonprofits operate as a network of regional affiliates. In most cases, estimating impact requires that we capture the impact of all activities and issue a single rating across the entire network. To do this, we look for financial statements that have been consolidated across headquarters and all affiliates.