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Charity Navigator
        CN 2.0 Case Study
                      Presentation at
                Managing to Outcomes Forum

Paul Brest, President, The William and Flora Hewlett Foundation
    With Ken Berger, President & CEO, Charity Navigator,
        David Bonbright, CEO, Keystone Accountability,
  Xandy Brown, Pilot Project Coordinator, Charity Navigator,
      And Professor David Campbell, SUNY Binghamton
                         June 13, 2011
The Data Proves Impact
 Estimated 3.3 million
  distinct visitors per
  year (~5 million hits)
 92% say evaluations
  affected their decision
  to support individual
  public charities
 CN ratings influence
  decisions on billions in
  donations annually
CN 2.0



Financial   Accountability/   Results   More
Health      Transparency                Comprehensive
                                        Rating System
Note: Strategic Plan is in draft and not yet finalized.
10,000 CHARITIES RATED BY VOLUNTEER RATERS
 •  Why 10,000? Because ~70% of all revenues that come
    into the NP sector annually go to them.
 •  How to scale this effort? A new process to move beyond
    our staff and involve consumers in the rating of charities
   in cause areas they’re passionate about.
 •  now…                                   2.0…
Reporting Results R&D Process
What is the charity’s commitment to
           reporting results?
•  Clear commitment to reporting results stated.
•  Specified time period for which results are
   presented.
•  Some mission-related results in current period
   compared to earlier period.
•  Reporting distinguishes between activities,
   outputs and outcomes.
•  Credible intention to validate results evidence.
How does the charity demonstrate
  the demand for its services?
•  Reports indicating the aggregate numbers
   of individuals accessing the charity’s
   outputs in a given period.
•  Evidence of demand for more than half of
   the charity’s outputs is provided.
•  A statement of evidenced demand set
   against the larger demand that the charity
   does not presently have the capacity to
   reach.
Does the charity report its activities
          and outputs?
•  A clear description of the majority of the
   charity’s mission-related activities and
   outputs for a defined reporting period
•  A significant portion of mission-related
   activities and outputs reported are
   compared to an earlier reporting period
•  Activities and outputs reported can readily
   be related to reported expenditure
Does the charity report its outcomes
  (medium and longer-term results)?
•  A clear description of mission-related
   outcomes achieved by the charity in the
   reporting period.
•  Outcomes are described for more than
   half of the charity’s mission-related
   activities or those mission-related
   outcomes described relate to activities that
   consume more than half of total charity’s
   expenditure.
What is the quality of evidence for
          reported results?
•  Evidence of most mission-related outputs
   includes some element of independent
   validation
•  Low level of outcome evidence
•  Medium level of outcome evidence
•  High level of outcome evidence:
   beneficiary feedback
•  High level of outcome evidence:
   independent validation
Does the charity adjust and
     improve in light of its results?
•  Evidence that the organization assesses its mission-
   related performance in light of what was planned for
   the reporting period
•  Admits mistakes and publicizes corrective actions
•  Admits mistakes, publicizes corrective actions and
   commits itself to validating proposed corrective
   measures through dialogue with those affected
•  Admits mistakes, publicizes corrective actions, and
   provides evidence that it has in fact validated
   proposed corrective measures through dialogue with
   those affected
Framing Questions
•  Given the low level of current reporting of
   results, what are the best initial rating criteria?
•  What is the best way to communicate and
   implement rating criteria that will ratchet up over
   time?
•  What initial criteria will be (a) possible to rate
   reliably by volunteers and (b) sufficiently
   achievable to have a basic level of compliance
   within 12 months, but (c) not be so easy as to be
   credible and widely gamed.
•  Who else needs to be on the bus?
What do student raters learn?
•  More questions raised than answered:
  –  How to differentiate activities, outputs, and
     outcomes when they are not explicitly
     labeled?
  –  How does a charity report results at this level
     and still have a website that is accessible and
     clear to lay people?
  –  How to decrease subjectivity?
How was student feedback
•    Materials
               incorporated?
   –  Online platform
   –  Centralized communication
•  Rating
   –  Illustrative examples of where to find
      information
   –  4 level confidence scale
•  Process
   –  Thanking volunteers
   –  Providing background
Binghamton University Courses
•  Two courses
  –  Public Administration
     •  16 Students
     •  Issues in Nonprofit Administration
  –  Social Work
     •  Advanced Social Work Practice with Communities
     •  19 Students
•  Unique Features
  –  Local Organization Assessment
  –  $3,000 in “Philanthropy Incubator” grants
  –  Student Blog (“Navigating Southern Tier
     Charity”)
Course Structure
•  Public Administration
  –  Course Focus: Effectiveness and Accountability
  –  CN Recommended Readings, Forces for Good


•  Social Work
  –  Forces for Good


•  Inter-disciplinary Dimensions
  –  Charity Navigator Assessment Teams
  –  Local Organization Assessment Teams
  –  Class Discussion
CN: Students’ Practical Issues
•  Assessing Confidence Levels
•  Positive Response to 5 Minute Rule
•  Most Diligent: Assessments Time
   Consuming
•  Importance of Preparation, Knowledge
   (SW vs. PA)
•  Technology Challenges (CN
   Responsiveness)
CN: Students’ Philosophical Issues
•  Standards Incomplete
  –  Mistrust
  –  “Stars” system simplistic.
  –  Good organizations negatively affected.
•  Resource Limitations Constrain Performance
•  Assessing Transparency, not Performance
  –  Performance data depend on trust (not verifiable).
•  Discomfort with “Admitting Mistakes”
•  Donor vs. Beneficiary Focus
Standards and Students’ Funding
               Decisions
•  Real-world Challenge of Assessment
•  Charity Navigator Standards OK After All…
   –  Financial Measures
   –  Transparency
•  Role of Executive Compensation
•  Frustrations with Limitations of Secondary Data
   –  Assessment Incomplete
•  Creation of New Standards
   –  Role of Social Media
   –  Student Concerns (small vs. large, effect of
      contribution)
End of Semester CN Rating
             Attitudes
•  The perfect not the enemy of the
   good.
•  Value of standards
•  Not all performance standards apply.
•  Create standards for stakeholder
   dialogue
•  SW students: Limited utility for
   beneficiaries
End Semester Performance
      Assessment Attitudes
•  Effectiveness a social construct
•  Negotiate standards with
   stakeholders.
•  More questions than answers; “it
   depends”
•  Importance of responsiveness to
   performance perceptions.

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Charity Navigator 2.0 Case Study Presentation

  • 1. Charity Navigator CN 2.0 Case Study Presentation at Managing to Outcomes Forum Paul Brest, President, The William and Flora Hewlett Foundation With Ken Berger, President & CEO, Charity Navigator, David Bonbright, CEO, Keystone Accountability, Xandy Brown, Pilot Project Coordinator, Charity Navigator, And Professor David Campbell, SUNY Binghamton June 13, 2011
  • 2. The Data Proves Impact  Estimated 3.3 million distinct visitors per year (~5 million hits)  92% say evaluations affected their decision to support individual public charities  CN ratings influence decisions on billions in donations annually
  • 3.
  • 4. CN 2.0 Financial Accountability/ Results More Health Transparency Comprehensive Rating System
  • 5. Note: Strategic Plan is in draft and not yet finalized.
  • 6. 10,000 CHARITIES RATED BY VOLUNTEER RATERS •  Why 10,000? Because ~70% of all revenues that come into the NP sector annually go to them. •  How to scale this effort? A new process to move beyond our staff and involve consumers in the rating of charities in cause areas they’re passionate about. •  now… 2.0…
  • 8.
  • 9.
  • 10. What is the charity’s commitment to reporting results? •  Clear commitment to reporting results stated. •  Specified time period for which results are presented. •  Some mission-related results in current period compared to earlier period. •  Reporting distinguishes between activities, outputs and outcomes. •  Credible intention to validate results evidence.
  • 11. How does the charity demonstrate the demand for its services? •  Reports indicating the aggregate numbers of individuals accessing the charity’s outputs in a given period. •  Evidence of demand for more than half of the charity’s outputs is provided. •  A statement of evidenced demand set against the larger demand that the charity does not presently have the capacity to reach.
  • 12. Does the charity report its activities and outputs? •  A clear description of the majority of the charity’s mission-related activities and outputs for a defined reporting period •  A significant portion of mission-related activities and outputs reported are compared to an earlier reporting period •  Activities and outputs reported can readily be related to reported expenditure
  • 13. Does the charity report its outcomes (medium and longer-term results)? •  A clear description of mission-related outcomes achieved by the charity in the reporting period. •  Outcomes are described for more than half of the charity’s mission-related activities or those mission-related outcomes described relate to activities that consume more than half of total charity’s expenditure.
  • 14. What is the quality of evidence for reported results? •  Evidence of most mission-related outputs includes some element of independent validation •  Low level of outcome evidence •  Medium level of outcome evidence •  High level of outcome evidence: beneficiary feedback •  High level of outcome evidence: independent validation
  • 15. Does the charity adjust and improve in light of its results? •  Evidence that the organization assesses its mission- related performance in light of what was planned for the reporting period •  Admits mistakes and publicizes corrective actions •  Admits mistakes, publicizes corrective actions and commits itself to validating proposed corrective measures through dialogue with those affected •  Admits mistakes, publicizes corrective actions, and provides evidence that it has in fact validated proposed corrective measures through dialogue with those affected
  • 16. Framing Questions •  Given the low level of current reporting of results, what are the best initial rating criteria? •  What is the best way to communicate and implement rating criteria that will ratchet up over time? •  What initial criteria will be (a) possible to rate reliably by volunteers and (b) sufficiently achievable to have a basic level of compliance within 12 months, but (c) not be so easy as to be credible and widely gamed. •  Who else needs to be on the bus?
  • 17. What do student raters learn? •  More questions raised than answered: –  How to differentiate activities, outputs, and outcomes when they are not explicitly labeled? –  How does a charity report results at this level and still have a website that is accessible and clear to lay people? –  How to decrease subjectivity?
  • 18. How was student feedback •  Materials incorporated? –  Online platform –  Centralized communication •  Rating –  Illustrative examples of where to find information –  4 level confidence scale •  Process –  Thanking volunteers –  Providing background
  • 19. Binghamton University Courses •  Two courses –  Public Administration •  16 Students •  Issues in Nonprofit Administration –  Social Work •  Advanced Social Work Practice with Communities •  19 Students •  Unique Features –  Local Organization Assessment –  $3,000 in “Philanthropy Incubator” grants –  Student Blog (“Navigating Southern Tier Charity”)
  • 20. Course Structure •  Public Administration –  Course Focus: Effectiveness and Accountability –  CN Recommended Readings, Forces for Good •  Social Work –  Forces for Good •  Inter-disciplinary Dimensions –  Charity Navigator Assessment Teams –  Local Organization Assessment Teams –  Class Discussion
  • 21. CN: Students’ Practical Issues •  Assessing Confidence Levels •  Positive Response to 5 Minute Rule •  Most Diligent: Assessments Time Consuming •  Importance of Preparation, Knowledge (SW vs. PA) •  Technology Challenges (CN Responsiveness)
  • 22. CN: Students’ Philosophical Issues •  Standards Incomplete –  Mistrust –  “Stars” system simplistic. –  Good organizations negatively affected. •  Resource Limitations Constrain Performance •  Assessing Transparency, not Performance –  Performance data depend on trust (not verifiable). •  Discomfort with “Admitting Mistakes” •  Donor vs. Beneficiary Focus
  • 23. Standards and Students’ Funding Decisions •  Real-world Challenge of Assessment •  Charity Navigator Standards OK After All… –  Financial Measures –  Transparency •  Role of Executive Compensation •  Frustrations with Limitations of Secondary Data –  Assessment Incomplete •  Creation of New Standards –  Role of Social Media –  Student Concerns (small vs. large, effect of contribution)
  • 24. End of Semester CN Rating Attitudes •  The perfect not the enemy of the good. •  Value of standards •  Not all performance standards apply. •  Create standards for stakeholder dialogue •  SW students: Limited utility for beneficiaries
  • 25. End Semester Performance Assessment Attitudes •  Effectiveness a social construct •  Negotiate standards with stakeholders. •  More questions than answers; “it depends” •  Importance of responsiveness to performance perceptions.