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A savvy business investor knows that it’s not always about self-interested profits. You get what you give back to the world_that’s where true value is anchored. You want to make sure your money is making a difference. What are the top 5 nonprofits to donate to in 2019-2020? How can you be certain that these nonprofits are taking your contribution and making a real and actionable impact with them?
Well, wouldn’t you know? There’s a website devoted to the express purpose of sorting that question out for you. It’s called Top Nonprofits.com. They have compiled a list of the top 100 nonprofit organizations as of 2019.
Narrowing down to a pool of register 501C’s in the United States, these are the stats:
- Metropolitan Museum of Art
- American Civil Liberties Union Foundation
- Amnesty International USA
- Planned Parenthood Federation of America ___And
- American Heart Association
These are the top five names of the list when comparing average web rank, average social rank, and the overall Charity Navigator or CN Rank of the organizations on the list. Charity Navigator has over 5,000 organizations in its ranking system and lists them by their size.
First, what does Charity Navigator rating look at? What does it determine and how does it factor into the difference-making scale of your donation dollars?
Refer to Defense.gov for a deeper analysis. The Defense.gov site has listed Criteria for Listed Organizations. These criteria break down the status and efficacy of the organizations on that list.
DOD defines the Charity Navigator as quote, “a nonprofit organization that has evaluated the financial health of over 5,400 of America’s largest charities.”
So, what we know from this definition is that Charity Navigator takes an exhaustive look at the money funnel going into and out of these organizations. It determines if the organizations are functioning as they self-identify and are thus being transparent with the funds you send them.
The Charity Navigator site self-identifies as “your guide to intelligent giving”.
Deeper digging on the Charity Navigator site reveals more detailed insights about the five organizations that were listed via Top Nonprofit.com.
American Civil Liberties Union doesn’t have a standard rating via the CN programs. Instead, it has been reviewed by CN’s ratings partner_Guide Star’s Impact Info. Because the American Civil Liberties Union is a civic league it doesn’t fall under the same standard ratings, so Guide Star submitted the organization’s criteria to their 5-point questionnaire. Guide Star then awards its signature Seal of Transparency for the calendar year of this questionnaire.
CN rankings are more US-domestic based whereas Guide Star’s ranking is worldwide, further citing Defense.gov.
The system had Amnesty International higher on their CN ranking points system based on specific fundraising efficiency criteria. They have the organization listed as spending 77.4% of their proceeds on actual campaigns and operations.
The working capital ratio is 0.59. Program expense growth is set at 8.5% and liabilities to assets are set at 15.2%. Fundraising efficacy is set at $0.15-which based on the CN criteria means it takes about 15 cents of fundraiser expenses to earn each dollar raised in fundraising campaigns.
The data CN ranked from was compiled via US IRS Form 990s taken from the organization’s records.
This record was taken in December 2018 and should likely be submitted for review as we near the end of the calendar year 2019.
Now we can compare a higher ranking member of the top 5 groups to the CN scale. From the original Top Nonprofits list, the Metropolitan Museum of Art has a 23 CN scale ranking in terms of size.
Checking against Charity Navigator’s site, the Metropolitan Museum of Art performed best overall at a 4 out of 4-star ranking. It scored 95 out of 100 points overall, with 96 out of 100 for accountability and transparency. It scored 95.61 out of 100 for financial health.
The Metropolitan Museum of Art spends 83.6% of its proceeds on program expenses. It has a fundraising efficiency of $0.04. This number is achieved by dividing the fundraising expenses by the total dollar amount the organization receives from the fundraiser. In this case, $0.04 is spent to earn each dollar earned in fundraising. Fundraising expenses are relatively low at 2.8% of all expenses. Liabilities are also quite low at 15.8%.
So, if you compare Amnesty International to the Metropolitan Museum of Art, you see that the museum is managing its money better. You see a lot more than that though. You also see the numbers crunched down that show you the efficiency of fundraising schemes by following the money. You know how much liability each organization is burdened with from the numbers.
The CN rating system also tells you specific details about the director boards, existing policies, tax transparency and more of your organization.
With this educated system, you now know which of the five top nonprofits in the US are performing with the greatest healthiness. You also know how to educate yourself if there’s an organization that you don’t see on this list but still want to consider a contribution to.