You Follow the Rules, Why Doesn’t Charity Navigator?

March 13, 2013 Posted by The Law Firm for Non-Profits, P.C. in Donations, Fundraising, News

Your organization works hard and pays good money to follow the accounting rules – is it fair that Charity Navigator doesn’t? The charity evaluator uses metrics by which it analyzes and rates charities. These ratings are then viewed by thousands of potential donors.


In an under-the-radar move, Charity Navigator recently revised its financial performance efficiency metrics to be in direct conflict with Generally Accepted Accounting Principles (GAAP). Clearly believing that it “knows better” than the Financial Accounting Standards Board, it simply decided to disregard the rules and claim that charities can’t have multi-purpose donor outreach expenses (e.g., communications that are both for programs and fundraising). Instead, Charity Navigator reclassifies any money partially used for fundraising communications as fundraising expenses. This means that your organization may be losing thousands of donations just because Charity Navigator doesn’t follow the rules.

On its website, Charity Navigator claims that it made this decision as “an advisor and advocate for donors,” but it is blatantly ignoring a charity’s efforts to be efficient in its donor communications.

How will this affect your nonprofit’s rating on Charity Navigator?

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506

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