What’s the difference between your top-rated charities and a list like Charity Navigator’s?

In the past, Charity Navigator focused primarily on a charity’s financial health and its ratio of programme-to-administrative costs, rather than evaluating what the charity’s programmes accomplished. However, in recent years, we’ve been happy to see Charity Navigator add an Impact & Results scoring metric that provides a cost-effectiveness rating and aims to look at what the programme is accomplishing per dollar donated. That said, there are still several differences between the methods our vetted evaluators use to measure impact and recommend charities and the way Charity Navigator scores charities on impact. These differences mean that Charity Navigator lists a huge number of charities as top-rated, even though there are substantial differences in impact among them. Some of the differences between Charity Navigator’s impact evaluations and ours include:

• Charity Navigator states that it does not currently have the infrastructure to assess the impact of all program types/charities. However, charities can still achieve a four-star rating even if the impact of its programmes has not been assessed. This indicates that Charity Navigator’s main focus is not (yet) on assessing impact.
• When the data does exist, the Impact & Results rating is only weighted at 50%, meaning Charity Navigator places equal weight on impact and a combination of its other metrics. Most of our vetted charity evaluators place the most weight on programme impact.
• Regarding the data, Charity Navigator states that its Impact & Results rating uses “information that was either publicly available or charity-submitted to estimate the actual impact a charity’s program has on people's lives.” However, charities often report misleading cost-effectiveness figures that are overly optimistic. Because Charity Navigator rates such a high volume of charities, it’s unlikely that it is able to do a deep-dive into the cost-effectiveness of each charity it evaluates. In contrast, impact-focused evaluators typically identify particular types of charities that are likely to be highly effective through cause area prioritisation and programme prioritisation, and then are able to do a much deeper investigation into each charity they evaluate.
• Most importantly, when scoring a charity, Charity Navigator does not take into account the huge variation in impact and cost-effectiveness that arises from your choice of which problems and programs to donate to. Charity Navigator’s rating methodology guide states: “We categorize nonprofits based on their programmatic focus, and each category has specific benchmark levels for cost-effectiveness. These benchmarks serve as a reference for assessing the relative impact of nonprofits operating within that particular program category.” This means that a charity can get a high-impact rating even if its programmatic focus is relatively low impact when compared to other programmes. For example, the Navy Seal Foundation, which grants scholarships to military personnel in high-income countries, and the Against Malaria Foundation, which provides bed nets to protect people from malaria in low-income countries, were both granted a perfect score of 100 and deemed “highly cost-effective” by Charity Navigator even though the good done per dollar is vastly different. In the first case, $3,200 would raise one recipient’s income by $7,500; in the second, it would provide about 640 bednets, which would protect 1,280 people from malaria for up to four years. Learn more about comparing charities.