10 Tips to Optimize Ratings of Nonprofits
Cultivating and sustaining public trust is vital to the health of any organization. For the last five years, Give.org has conducted surveys on donor trust, asking what most signals the trustworthiness of a nonprofit organization. Top factors consistently cited are:
- Accomplishments the organization shares.
- Independent organization’s third-party evaluation.
- Name recognition.
Given the importance of public opinion and third-party ratings, we’ve studied the two most prominent evaluation frameworks — Candid Seals of Transparency and Charity Navigator Star Ratings — and compiled 10 tips to consider when establishing or maintaining your nonprofit organization’s profile.
1. Keep Your Organization’s Candid Profile Current
Untouched profiles expire after two years of inactivity, but that can be easily avoided with some simple and occasional maintenance. The requirements for each Seal of Transparency evolve on a regular basis, so be sure to review profile best practices to ensure your updates meet current standards.
2. Register in the Charity Navigator Nonprofit Portal
Since 2022, organizations are required to maintain a portion of their Charity Navigator profile. To do so, you must first create a nonprofit portal account. Once verified, one or more representatives from your organization can access the portal to update the organization’s profile information.
3. Report Metrics to Gain a Candid Platinum Seal of Transparency
Metrics can be financial or non-financial and are ideally the same as reported to the board of directors as key performance indicators (KPIs) to obtain a Candid Platinum Seal of Transparency. A best practice is to report three to five KPIs using three years of data. Unless your organization is truly a startup, avoid reporting the bare minimum one metric with one year of data as it’s contrary to the spirit of donor trust and transparency. Let’s make sure that metrics matter!
4. Join the Demographics via Candid Campaign
Donors are increasingly requesting demographic data during the grant application process. Instead of compiling this data for each request, you can create a Candid profile and share Demographics via Candid with a unique link.
5. Complete the ‘How We Listen’ Section in Your Candid Profile
Charity Navigator incorporates a data feed from Candid that includes answers to the “How We Listen” section. While “How We Listen” reporting is voluntary and does not impact the ability to earn a Candid Seal of Transparency, all questions must be answered to receive a score for the "Culture & Community" beacon in Charity Navigator.
6. Integrate Strategy and Transparency Frameworks for Cohesive Messaging
Earn the Charity Navigator "Leadership & Adaptability" beacon, which assesses an organization’s clarity of purpose, by providing information in the nonprofit portal. The Candid Platinum Seal is attained once the organization’s strategy and goals are shared either by uploading its strategic plan or addressing the five charting impact questions.
7. Ensure Your Organization’s National Taxonomy of Exempt Entities (NTEE) Code Aligns With Your Mission
Charitable organizations adopt their NTEE classification when they initially apply to the IRS for exempt status. In both the Candid and Charity Navigator systems, donors can utilize NTEE codes to search for organizations that align with cause areas they support. Review your NTEE code and confirm it properly reflects your mission to maximize funding opportunities. If your NTEE code is inaccurate, notify the IRS and request that it be updated.
8. Calculate Impact and Always Articulate Outcomes
Calculating an organization’s impact, particularly the quantification of benefits versus costs, is inherently difficult, especially when benefits extend years into the future. Currently, only a limited number of charities have received a Charity Navigator "Impact & Results" beacon. Outcomes can readily be articulated in Candid via program descriptions, and the type of metric reported in the Candid Platinum Seal can be designated as either an input, output, outcome or “context.”
9. Revisit the Narratives on Your IRS Form 990
Since the IRS Form 990 narratives feed into Charity Navigator profiles, consider involving program and development teams to assist in reviewing the narratives.
For maximum points toward the "Accountability & Finance" beacon, ensure the organization’s website is listed on page No. 1 of IRS Form 990 and its governance policies — conflict of interest, whistleblower, document retention and others — are disclosed.
Ensure expenses are properly reported by function in Part III and Part IX of IRS Form 990, Statement of Program Service Accomplishments.
10. Include IRS Form 990 on the Organization’s Website and Provide Hyperlinks to its Candid and Charity Navigator Profiles
Nonprofits are required to provide copies, upon request, of their three most recently filed annual information returns and their applications for tax exemption. By including this information on the website, the public disclosure requirement is fulfilled. Additionally, providing hyperlinks to profiles on the organization’s donor page, “about us” section and webpage footers ensures that donors can readily find this information, resulting in an enhanced level of donor trust.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Related story: What Americans Think About Nonprofits, Per New Study
Taylor Gray has been a trustee and treasurer of the Countess Moira Charitable Foundation since its inception and is a member of the board of directors of Exponent Philanthropy, a national, member-led community of lean funders.
His interest in promoting practical and scalable approaches to qualitative and quantitative impact measurement in the philanthropic space is an outgrowth of his long career in the financial services industry. He volunteers his time and expertise to grantees of the foundation and to other entities as well.
Lenore C. Sanchez has more than 20 years of diversified accounting, tax and business experience. She specializes in providing services to a variety of nonprofit clients, including charitable organizations, social service agencies, membership associations, museums, arts and other cultural institutions.
Lenore has extensive experience performing audits in accordance with government auditing standards, internal control reviews, financial statement analysis and operational assessments. She works closely with clients’ diversified staff, management, audit committee and board members.
Lenore is a co-creator and the host of PKF O’Connor Davies’ Nonprofits “Insight Out” podcast, sharing industry news, activities and events. She authors and contributes to the firm’s Thought Leadership series, as well as outside publications, including The CPA Journal. Lenore prepares and presents continuing professional education programs for the firm’s staff and is a 2023 graduate of the Firm’s Future Leaders Program. Additionally, Lenore is an active participant in the firm’s Women’s Initiative Network.
Lenore has been recognized for her many contributions to the community through the New City Rotary, Clarkstown Auxiliary Police, United Hospice and other organizations. Lenore graduated from Leadership Rockland in 2008 and was named a Forty Under 40 Young Business Leader Honoree by the Rockland Economic Development Corporation.