Informing Donors About Nonprofit Performance

Charity Navigator can play a big role in increasing donor demand for information about what nonprofits actually accomplish. The site's more than 3 million annual visitors — combined with its brand recognition, proactive media outreach, and sometimes-sensationalistic top-10 lists — have made its flawed efficiency rating the most popular way of judging nonprofits. The financial ratings have created demand among donors for low administrative costs, in turn forcing nonprofits to cut administrative costs or finagle tax forms. Charity Navigator has created so much demand for these financial statistics that many nonprofits even report on them in their outreach materials, creating a contagion effect.