Charity Ratings Suffer a Blow

The William and Flora Hewlett Foundation announced today that their eight-year, $12 million effort to support the “effective philanthropy” movement did not achieve its goals. This effort aimed to persuade individual donors to give greater consideration to financial and short-term metrics; it also de-emphasized harder to measure impact such as influence on social and political change, hope and joy, mitigation of pain and suffering, and even donor satisfaction. The foundation admitted that while the effort “succeeded at producing more information about charity performance [think Charity Navigator and Give Well], it did little to change donors’ decisions: They continued to give with their hearts, not their heads.” Commenting on the news, Jan Masaoka, Executive Director of California Association of Nonprofits explained that using Charity Navigator and other simplistic ratings never was “using your head.” She said, “Your head ought to tell you that unproven, inaccurately calculated metrics for the wrong things are an un-smart ways to choose where to donate.” To be clear, I always review nonprofit tax returns available online at Guidestar when performing due diligence. But given the large number of worthy charities that have been unfairly tarnished by simplistic assessments, and the misconceptions these ratings have fostered, I am relieved that the research about their inefficacy is now available and being acted upon.