CharityWatch

Last updated
CharityWatch
Formation1992;32 years ago (1992)
FounderDaniel Borochoff
Type Nonprofit corporation
33-0491030
Legal statusActive
PurposeCharity Ratings
Headquarters Chicago, Illinois, U.S.
Official language
English
President
Laurie Styron
Main organ
charitywatch.org
Revenue
$605,768
Staff
5
Website www.charitywatch.org
Formerly called
American Institute of Philanthropy (1992–2012)

CharityWatch, known until 2012 as the American Institute of Philanthropy, [1] is a 501(c)(3) nonprofit organization in Chicago, [2] created in the United States by Daniel Borochoff in 1992, [3] to provide information about charities' financial efficiency, accountability, governance, and fundraising.

Contents

Activities

CharityWatch is a nonprofit charity watchdog and rating organization that works to uncover and report on wrongdoing in the nonprofit sector by conducting in-depth analyses of the audited financial statements, tax forms, fundraising contracts, and other reporting of nonprofit. They only review 600 charities out of 1.5 million in the US. [4] CharityWatch encourages donors to give to charities that will allocate most of their contributions to program services that benefit the people and causes that donors wish to support. CharityWatch also promotes charity accountability and transparency through its research on the rapidly changing nonprofit field [5] and through its work with investigative journalists uncovering wrongdoing within the nonprofit sector. [6] CharityWatch rates nonprofits on an A+ (best) to F (worst) scale and provides data on charity executive salaries, governance, public transparency, donor privacy, asset reserves, and other information uncovered by its analysts during their evaluation. [7] It publishes this information on its website [8] and in its biannual Charity Rating Guide & Watchdog Report. CharityWatch also publishes lists of Top-Rated Charities, [9] charities with high assets, [10] and a report of top compensation packages paid to charity executives. [11]

CharityWatch states that it is independently funded by small donations from the general public and that it receives over 95% of its support this way. [12] The majority of CharityWatch's content is free to the public, including its library of articles, giving tips, resources for donors and journalists, top charity compensation packages, and its full reports on all of its top-rated charities. Membership to access CharityWatch's full content is currently $50 per year. [13]

CharityWatch sets itself apart as a charity watchdog organization that performs individualized analyses of charities' financial reporting. It has been critical of other sources of charity information that produce automated ratings based solely or primarily on computer algorithms whose rating systems can easily be gamed by charities. [14] CharityWatch assigns low ratings to charities that have high fundraising costs and low program spending in cases where other charity raters have assigned the same charities perfect scores. [15] CharityWatch has also assigned high ratings to nonprofits with more complex accounting cases where the simplistic systems of other raters produced unfairly low scored for the same charity. [16]

CharityWatch also investigates ethical issues surrounding charity spending, including salaries and payouts, financial reporting, telemarketing and direct-mail solicitation campaigns, and governance. It shares the results of its research with the media and government agencies and works closely with these parties to educate the public about informed giving. CharityWatch founder Daniel Borochoff has testified before Congress about veterans charities, [17] [18] [19] the aftermath of Hurricanes Katrina and Rita, [20] and the philanthropic response to the 9/11 attacks. [21]

CharityWatch's ratings have received exposure from Congress and the media; including an appearance on the front page of The Washington Post. [22] [23] [18] [24]

Governance and operations

CharityWatch founder, Daniel Borochoff, retired from his role as president in 2020, but remains on the charity's board of directors. Laurie Styron, a former CharityWatch analyst, was appointed executive director in his place in February 2020. [25] In 2019, CharityWatch spent $615,950, of which 83% ($510,140) was spent on programs. [26]

Reception

In 2005, prior to making all of its rating available on its website, the then-named American Institute of Philanthropy (AIP) was criticized in a study on rating nonprofits published in the Stanford Social Innovation Review for having a "gotcha" mentality and limited explanation for their ratings. The study criticized several nonprofit watchdog organizations for relying heavily on financial data that is not adequate for evaluating a nonprofit organization and may misguide the public, although the study noted that AIP "recognizes the limitations of the [IRS Form] 990 and thus develops its financial health ratios by analyzing a charity's audited financial statements". [27]

CharityWatch does not take charities' financial reporting at face value even when Generally Accepted Accounting Principles (GAAP) allow charities to include in-kind goods of questionable value in their financial reporting, or allow charities to include telemarketing or direct mail costs in their reported program spending. [28] Many in the nonprofit space have taken issue with this approach. [29] [30] [31]

See also

Related Research Articles

<span class="mw-page-title-main">Compassion International</span> American humanitarian aid NGO, founded 1952

Compassion International is an American child sponsorship and Christian humanitarian aid organization headquartered in Colorado Springs, Colorado, that aims to positively influence the long-term development of children globally who live in poverty.

<span class="mw-page-title-main">United Way</span> Nonprofit organization

United Way is an international network of over 1,800 local nonprofit fundraising affiliates. Prior to 2015, United Way was the largest nonprofit organization in the United States by donations from the public. Individual United Ways mobilize a single fundraising campaign to raise money for various nonprofits, with most donations coming through payroll deductions.

<span class="mw-page-title-main">Susan G. Komen for the Cure</span> American non-profit organization

Susan G. Komen is a breast cancer organization in the United States.

The BBB Wise Giving Alliance (WGA) is an American charity monitoring organization. Under previous names, it has been reporting on nationally soliciting charities since the 1920s. BBB's Give.org evaluates charities, at no charge, using the 20 BBB Standards for Charity Accountability to help donors verify the trustworthiness of soliciting organizations and to strengthen charity practices. Resulting reports are freely accessible to the public at Give.org. These standards were developed with the help of the charitable community.

<span class="mw-page-title-main">Charity Navigator</span> Charity assessment organization that evaluates charitable organizations in the U.S.

Charity Navigator is a charity assessment organization that evaluates hundreds of thousands of charitable organizations based in the United States, operating as a free 501(c)(3) organization. It provides insights into a nonprofit's financial stability, adherence to best practices for both accountability and transparency, and results reporting. It is the largest and most-utilized evaluator of charities in the United States. It does not accept any advertising or donations from the organizations it evaluates.

Roger Chapin is an American businessman turned fundraiser living in San Diego, who calls himself a "nonprofit entrepreneur", according to Forbes magazine. He has launched more than 20 charities, and until 2009 was the president of Help Hospitalized Veterans, an American charity, whose stated purpose is, "Making time live for America's hospitalized veterans." The New York Times has labelled two of the organizations he founded, Help Hospitalized Veterans and Coalition to Salute America's Heroes as being " among a dozen military-related charities given a grade of F in a study last December by the American Institute of Philanthropy, a nonprofit watchdog group. These and other charities have collected hundreds of millions of dollars from kind-hearted Americans and squandered an unconscionable amount of it on overhead and expenses—70 percent or 80 percent, or more."

Feed the Children, established in 1979 and headquartered in Oklahoma City, Oklahoma, is a non-profit organization focused on alleviating childhood hunger. Its mission is "providing hope and resources for those without life's essentials." The organization provides food, essentials, education supplies and disaster relief to those in need across the United States and in eight countries around the world. Domestically, Feed the Children operates five distribution centers located in Oklahoma, Indiana, California, Tennessee and Pennsylvania.

<span class="mw-page-title-main">DonorsChoose</span> American nonprofit organization

DonorsChoose is a United States–based nonprofit organization that allows individuals to donate directly to public school classroom projects. The organization has been given Charity Navigator's highest rating every year since 2005. As of June 2024, the organization has funded 2.95 million projects and raise $1.64 billion for teachers and students. 88% of public schools in the United States have at least one project has been requested on DonorsChoose. Schools from wealthy areas are more likely to make technology requests, while schools from less affluent areas are more likely to request basic supplies. It has been noted that repeat donors on DonorsChoose typically donate to projects they have no prior relationship with, and most often fund projects serving financially challenged students.

<span class="mw-page-title-main">Central Asia Institute</span>

Central Asia Institute (CAI) is an international non-profit organization, co-founded by Greg Mortenson and Jean Hoerni in 1996. The organization is based in Bozeman, Montana and works to promote and support community-based education throughout Central Asia, primarily in Pakistan and Afghanistan, by building schools, supporting teacher-training programs, and funding school scholarships.

Breast Cancer Coalition (NBCC) is a grassroots advocacy organization that combines the power of advocacy, education, policy, and research to unite around the goal of ending breast cancer.

ProLiteracy, also known as ProLiteracy Worldwide, is an international nonprofit organization that supports literacy programs that help adults learn to read and write. Based in Syracuse, New York, ProLiteracy has slightly less than 1,000 member programs in the U.S. and works with 21 partners in 35 developing countries.

<span class="mw-page-title-main">Form 990</span> United States Internal Revenue Service form

Form 990 is a United States Internal Revenue Service (IRS) form that provides the public with information about a nonprofit organization. It is also used by government agencies to prevent organizations from abusing their tax-exempt status. Some nonprofits, such as hospitals and other healthcare organizations, have more comprehensive reporting requirements.

Mobile donating refers to donating using a mobile device. Mobile donating is primarily done through an SMS or a phone call.

Candid is an information service specializing in reporting on U.S. nonprofit companies. In 2016, its database provided information on 2.5 million organizations. It is the product of the February 2019 merger of GuideStar with Foundation Center.

<span class="mw-page-title-main">AIDS Research Alliance</span> Defunct U.S. organization

AIDS Research Alliance of America (ARAA) was a national community-based 501(c)(3) non-profit medical research institution that sought to develop a cure for HIV/AIDS, medical strategies to prevent new HIV infections and better treatments for people living with HIV/AIDS. From 1989 to 2015, ARAA conducted over 150 clinical and pre-clinical studies, ranging from alternative therapies that employed a complementary approach to HIV care to the first in-human HIV vaccine trial. AIDS Research Alliance was partly responsible for "fast-tracking" to market half of today's anti-HIV treatments.

The Disabled Veterans National Foundation (DVNF) is an American registered charity that provides service for disabled veterans. Founded in 2007, the organization is based in Lanham, Maryland.

GlobalGiving is a 501(c)(3) non-profit organization based in the United States that provides a global crowdfunding platform for grassroots charitable projects. Since 2002, more than 1.6 million donors on GlobalGiving have donated more than $750 million to support more than 33,000 projects in 175 countries.

United Breast Cancer Foundation (UBCF), founded in October 2000, is a national nonprofit organization headquartered in Huntington Station, New York.

Charity assessment is the process of analysis of the goodness of a non-profit organization in financial terms. Historically, charity evaluators have focused on the question of how much of contributed funds are used for the purpose(s) claimed by the charity, while more recently some evaluators have placed an emphasis on the cost effectiveness of charities.

<span class="mw-page-title-main">Wild Animal Initiative</span> Non-profit wild animal welfare organization

Wild Animal Initiative (WAI) is a nonprofit organization focused on supporting and producing academic research on improving wild animal welfare. It is one of the charities recommended by Animal Charity Evaluators.

References

  1. ↑ Perry, Suzanne (2012-06-28). "An MBA's Sleuthing Skills Put Charities on the Hot Seat" (PDF). The Chronicle of Philanthropy . Vol. XXIV, no. 14. Archived from the original (PDF) on 2015-04-21. Retrieved 2023-10-13. Formerly known as the American Institute of Philanthropy, it has just adopted a snazzier name, CharityWatch
  2. ↑ "Charity Ratings | America's Most Independent, Assertive Charity Watchdog". CharityWatch. Retrieved 2016-01-25.
  3. ↑ Daniel Borochoff. "Mission Statement, Goals and More". Charitywatch.org. Archived from the original on 2010-12-07. Retrieved 2012-08-13.
  4. ↑ "Questioning behavior". The Frederick News-Post. 2007-12-21. Archived from the original on 2012-02-17. Retrieved 2012-08-13.
  5. ↑ "How to tell a good charity from a bad one". MSM Money. Archived from the original on 2011-07-14. Retrieved 2012-08-13.
  6. ↑ "In the News". www.charitywatch.org. Retrieved 2021-03-11.
  7. ↑ "Charity Rating Process". www.charitywatch.org. Retrieved 2021-03-11.
  8. ↑ "Charity Ratings | America's Most Independent, Assertive Charity Watchdog | CharityWatch". www.charitywatch.org. Retrieved 2021-03-11.
  9. ↑ "Top Rated Charities". www.charitywatch.org. Retrieved 2021-03-11.
  10. ↑ "High Asset Charities". www.charitywatch.org. Retrieved 2021-03-11.
  11. ↑ "Top Charity Compensation Packages". www.charitywatch.org. Retrieved 2021-03-11.
  12. ↑ "CharityWatch Difference". www.charitywatch.org. Retrieved 2021-03-11.
  13. ↑ "Become a Member". www.charitywatch.org. Retrieved 2021-03-11.
  14. ↑ "American Institute of Philanthropy aka CharityWatch". GuideStar . Retrieved 2021-06-29.
  15. ↑ Weiss, Gary. "Spotting Nonprofit Accounting Tricks". www.barrons.com. Retrieved 2021-03-11.
  16. ↑ "Outstanding Veterans Charity Wrongly Given Low Marks by Others". www.charitywatch.org. Retrieved 2021-03-11.
  17. ↑ Charity Alert: Committee on Oversight and Government Reform. United States House of Representatives Archived January 31, 2008, at the Wayback Machine
  18. 1 2 "Failing to Serve America's Heroes on the Home Front". ABC News. 2007-11-09. Archived from the original on 2011-07-23. Retrieved 2012-08-13.
  19. ↑ Archived January 31, 2008, at the Wayback Machine
  20. ↑ Hearing Archives: Committee on Ways & Means. U.S. House of Representatives Archived January 31, 2008, at the Wayback Machine
  21. ↑ "Committee on Ways and Means, Oversight Subcommittee, 107-47, Response to the Recent Terrorist Attacks". Waysandmeans.house.gov. Archived from the original on 2012-12-16. Retrieved 2012-08-13.
  22. ↑ "Study Faults Charities for Veterans". The Washington Post. 2007-12-13. Archived from the original on October 20, 2012. Retrieved 2012-08-13.
  23. ↑ "An Intolerable Fraud". The New York Times. 8 February 2008. Retrieved 25 January 2016.
  24. ↑ "Vet's Charities Pocket Money". CBS News. 2007-12-13. Retrieved 2012-08-13.
  25. ↑ "Staff & Board". www.charitywatch.org. Retrieved 2021-03-11.
  26. ↑ "2018 Charity Watch Audited Financial Statement" (PDF). 2019-05-22.[ dead link ]
  27. ↑ Lowell, Stephanie; Trelstad, Brian; Meehan, Bill (2005). "The Ratings Game". Stanford Social Innovation Review. 3 (2): 3945. doi:10.48558/RWTM-P058.
  28. ↑ "CharityWatch Ratings Bridge the Knowledge Gap between Donors and GAAP Reporting". www.charitywatch.org. Retrieved 2021-03-11.
  29. ↑ "Charity Navigator Dismisses Use of Joint Cost Allocations". 11 January 2013.
  30. ↑ "Charity Raters Part I: Charting the Bad and the Bad". 25 May 2013.
  31. ↑ "Is Charity Navigator's Revised Rating System an Improvement?". 2 June 2016.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.