Let's Raise Some Money
Insights from Karen Climer about fundraising and nonprofit organizations

Don’t Worry About The Watchdog Websites

October 12th, 2015 by Karen Climer

I had an op-ed in the Orlando Sentinel today regarding Charity Navigator. Climer My Word 10-12-15My op-ed is written toward how donors might want to think about this, but now I’m going to talk about how charities ought to think about this.

How much effort should we put into getting the highest rating from a charity watchdog site? I recommend to my clients that they put no effort into it. If you get the top-rating, that’s great. If you don’t, don’t lose any sleep over it.

But, Karen, won’t we lose donations if we aren’t a four-star charity? I doubt it. Hope Consulting did a study in 2010 called Money for Good and they found that very few donors research nonprofits before they give. Those that do research, look to the nonprofit itself for information about efficiency and effectiveness. In other words, nobody is looking at Charity Navigator or other rating sites.

What information do the donors want? You can post your Form 990, audit, and similar information on your website, but that’s not the most important thing. Give donors information that matters – information about how effective you are in your mission. Include information about the process AND the product. Donors want to know that on an average night 100 people stay at the homeless shelter (process). They also want to know that you placed 24 families in permanent housing last year (product). Many nonprofits only give the process results – be sure your organization gives process and product results.

We are smarter consumers than we were 20 years ago. Most consumers have a fairly decent BS meter. In fact, I bet 90% of consumers would say they have an above average BS meter. Consumers know that it doesn’t matter if the local hospital has top ratings from all of the watchdog websites. If people leave the hospital sicker (or deader, if that’s a word) than when they arrived at the hospital, the hospital is failing in its mission.

Consumers don’t care if the local dance company spends 99% of its money on programs. We measure the quality of a dance company based on the quality of the performance. Also, it doesn’t matter if the dancers thought the performance was great. It matters if the audience thought it was great. Ask your clients if they are happy with the results. Don’t ask the staff.

The inverse is also true: if you spend 99% of your revenue on non-program expenses, but you present world-class dance performances that consistently sell-out, you will continue to have donors.

Karen, that just isn’t true. We have a fantastic program and are helping a lot of people, but donors still ask about our overhead ratio.

Donors ask about the overhead ratio when they don’t know how else to measure success. If I am a patient of the hospital, I know how to measure the hospital’s success. If the hospital made me feel better, the hospital is great. That sounds silly, but that is the criteria that people use. Have you ever heard someone say, “East Cupcake Hospital amputated my leg when the problem was my arm, but they do a good job on everyone else, so I’m going to send them some money.”? No!  We measure the hospital based on our own experience, or the experience of someone we know.

If it’s an organization where we aren’t a client, let’s say it’s a drug rehab center for teens, then we use other criteria. If the drug rehab center presents a solid, compelling case that lets me know that teens visit this place one time, and never have a relapse, then I’m in. If they talk about processes (not results), use a lot of jargon, and generally leave me unsure of their success rate, then donors fall back on the overhead ratio because it’s something that makes sense to them.

I would love to hear your thoughts about the watchdog websites, and how much effort your organization puts into them. Please leave a comment below.

Posted in Communication, Donor Motivation, Nonprofit issues

One Response

  1. Frances

    Great article, especially your example about the hospital. So true.

Leave a Comment

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.