At PrairieAuto Gifts, we recognize that you want to ensure your donations are making a real difference. Understanding the ratings and evaluations of charities can empower you to make informed decisions about where your money goes. One essential tool in this process is the Charity Navigator star rating system.
This page will guide you through how Charity Navigator evaluates over 200,000 nonprofits based on key criteria such as finance, accountability, and community impact. By learning how to navigate these ratings, you'll be better equipped to assess the integrity and effectiveness of the charities you consider supporting.
Step-by-step walkthrough
Visit Charity Navigator
Start by going to charitynavigator.org. Enter the name of the charity you're interested in to access their profile. This will provide you with an overview of their ratings and financial information.
Review the Overall Star Rating
Pay close attention to the overall star rating, which ranges from 1 to 4 stars. A 4-star rating indicates high financial accountability and transparency, while lower ratings may signal potential issues.
Examine the Finance & Accountability Sub-score
Delve into the Finance & Accountability sub-score, which is particularly relevant for donors. This score reflects how well a charity uses its funds and adheres to financial reporting standards.
Compare Similar Charities
Look for organizations with missions similar to the one you’re considering. Compare their scores and ratings to gauge where your potential charity stands in relation to others in the same sector.
Check for Advisories
Look for any advisories attached to the charity’s profile. These flags indicate potential governance or financial concerns that may warrant further investigation before you donate.
Cross-reference with BBB Wise Giving Alliance
For added assurance, cross-reference the charity’s ratings with those from the BBB Wise Giving Alliance. This additional layer of review can help confirm the charity's legitimacy.
Positive signals (green flags)
✓ 4-Star Ratings
Organizations that achieve a 4-star rating exemplify strong financial health and transparency, offering reassurance to donors that their contributions are well-managed.
✓ High Program Expense Ratio
A high program expense ratio indicates that a large portion of funds is allocated directly to charitable projects, signaling effective use of donations.
✓ Positive Advisories
If there are no advisories on a charity's profile, it reflects good governance and financial practices, enhancing the credibility of the organization.
✓ Regular 990 Filings
Timely and consistent Form 990 filings suggest that a charity maintains transparency and accountability, making it a more trustworthy option for donors.
Warning signals (red flags)
⚠ 1-Star Ratings
Charities receiving 1-star ratings may face serious financial-reporting issues or governance concerns. This can signal potential risks in donating to them.
⚠ Low Program Expense Ratio
A low program expense ratio indicates that a significant portion of funds may not be going toward direct charitable activities, raising questions about the charity’s effectiveness.
⚠ Advisories on Profile
Advisories listed on the charity's profile may indicate concerns related to governance or financial conduct. This could be a red flag for potential donors.
⚠ Infrequent 990 Filings
If a charity has inconsistent or infrequent Form 990 filings, it suggests a lack of transparency and accountability, which may affect its reliability as a charitable organization.
Tools + resources
- https://charitynavigator.org
- https://bbb.org/charity-reviews
- https://projects.propublica.org/nonprofits
- https://apps.irs.gov/app/eos
- https://afpglobal.org
- https://aafrc.org
South Dakota state-level oversight
In South Dakota, you can verify a charity’s registration through the state Attorney General’s Office. The South Dakota Better Business Bureau also provides reviews and ratings for local charities. Additionally, the South Dakota Nonprofit Association offers resources and support for local nonprofits, ensuring that the community is well-informed about charitable organizations.