Extending well beyond the holiday “Season of Giving,” Americans have participated in an astonishing amount of charitable contributions in the last two years. It’s a trend that appears to be growing, up almost 7 percent ($51 billion) so far in 2022, and it’s partially built off the back of movement organizing for social justice causes.
In 2021, individuals (opposed to corporate or foundation giving) donated more than $326 billion to philanthropic causes and made up the industry’s largest portion of funding, according to the National Philanthropic Trust. Just as well, individual commitments to issues like racial and reproductive justice coincided with corporate pledges in support of the same causes, with an emphasis on smaller, localized organizing movements — portions of philanthropic funding that have historically gone to larger national nonprofits instead. Organizations, like the minds behind global generosity movement Giving Tuesday, have even reported steady increases in non-monetary giving, in the form of physical items or volunteer time.
As more and more people turn to forms of online giving as a way to address growing anxiety, support global movements working for change, and embrace the power of mutual aid, donors are on the hunt for more impactful ways to share their money and solidarity with the causes that matter the most to them.
What does it mean to decolonize your donations?
Charity Navigator is a 501(c)(3) nonprofit that provides free access to data, tools, and resources (including a 4-star scale rating) to help donors make informed decisions about philanthropic giving.
Michael Thatcher, president and CEO of Charity Navigator, told Mashable that the organization was founded “to make the best possible information available to as many people as possible. The idea being, whether you have $5 or $5 million, you’re still going to find good information on Charity Navigator that can help you make a difference in the world.”
In November, the two-decade-old nonprofit announced its brand new website, complete with revamped rating systems and unique tools to help “democratize the act of giving,” as Thatcher explained.
The site now features an expanded ratings system that includes factors like Diversity, Equity, and Inclusion (DEI) commitments, impact ratings, and community feedback, as well as new ways to donate directly on the site, with other people in value-focused giving circles, and to multiple organizations at once. The site also provides numerous resources for the individual donor who might want to know more about philanthropy and other ways to give back.
In many ways, Charity Navigator’s new website changes and accompanying tools reflect the culmination of shifts in both activist and philanthropic spaces, trending toward localized, community-voiced giving.
“It’s not downsizing, it’s small-sizing. Going from the mega charities to the small community organizations. This is a movement away from big philanthropy and from the big charities, to a certain extent,” Thatcher explained. “In the last two and a half years, [Charity Navigator] started rating significantly smaller charities, and we’ve also grown how many we rate. We went from rating 9,000 —sort of the big popular ones — to now rating about 200,000. There are over 50,000 charities in our database that are under $200,000 in annual revenue.”
Alongside a national reexamination of institutional racism and individual bias in all its forms, many advocates have driven a critical reevaluation of the practice of giving, as well. Much of our nation’s understanding of charity involves large-scale donors and a philanthropic industry historically intertwined with exploitive capitalism and, fundamentally, white supremacy. Part of that unlearning process is a growing movement for the decolonization of philanthropy, which involves a conscious awareness of how your money, and the way you distribute it, impacts marginalized communities.
Thatcher’s noticed these shifts, too. “You could say there’s a democratization of philanthropy, where individual donors are being empowered with better tools to do better. But they’re also raising a spotlight,” Thatcher said. “There’s a huge equity movement right now, in terms of making it easier to find that small charity and help them gain access to donors anywhere in the country or the world. What we’re trying to do with the website is increase the ease of finding exactly that sort of unique organization that five years ago would have been completely invisible unless I happen to be in that neighborhood myself.”
Popular doesn’t mean best. It just means popular.
Whether decolonization is your goal (and it’s truly a worthy one), or you just have the desire to make sure your donations reach the people who need it most, in the areas that matter to you, sites like the new Charity Navigator can aid in that process. Think of using them as an initial step in your journey of giving.
How sites like Charity Navigator work
Originally designed to help high-income private donors in the vein of investing advisor Morningstar, Charity Navigator slowly shifted to a focus on the average individual donor. It works using data provided from a variety of sources to offer in-depth analysis of nonprofits. “We’re not Yelp; we are actually doing an evaluation,” Thatcher said.
Publicly available information in the form of federal tax documents help guide the organization’s financial review. Charity Navigator also reviews information submitted directly from the nonprofits themselves, as well as community or constituent feedback. If enough information is available, the site then posts a star rating and a detailed breakdown of why. All of this methodology is clearly outlined on the site. Transparency is key, as they (and Thatcher) say.
Everything to consider before donating money to a cause
A system of evaluating charities and nonprofits
Charity Navigator’s ratings are based on four differently weighted “beacons“: accountability and finance, which looks at an organization’s spending and financial documentations; leadership and adaptability, which assesses an organization’s leadership model, structure, and strategic plan; culture and community, which reflects an organization’s responsiveness to the needs of its constituents; and impact and results.
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Impact ratings, specifically, are determined with systems designed by the nonprofit Impact Matters, which was acquired by Charity Navigator in 2020. This system is based on a cost effectiveness or cost per outcome analysis, Thatcher explained, which looks at a nonprofit’s specific programs or service areas. Pure data, of course, is not without its bias, and that’s why the four-pronged approach is so important to Charity Navigator’s goal. “That’s where the new rating system focuses, really trying to give you this more holistic picture of who this charity is. What are they doing? How are they doing it? And when possible, what is the impact that they’ve achieved in the world?” Thatcher said.
The organization has given out more than 1,500 nonprofit ratings, but the site boasts more than a million more nonprofit and charity listings that still hold helpful information.
The evaluation system is also a lesson to prospective donors, advocates, and activists on a wide scale: Numbers are important, but there’s a lot more to charity and activism than simple stats can provide.
“This is tricky,” Thatcher said, “but popular doesn’t mean best. It just means popular.”
Making informed giving accessible to more people
Part of Charity Navigator’s suite of new resources are additional guides and explanations of common philanthropic questions, concerns, and processes, which seek to empower individual donors when exploring charity both on the site and off. Under Donor Basics, individuals can find things like how to build a personal giving strategy, how to protect your data while donating, and even local volunteer opportunities.
It’s also filled with information on how to evaluate your donation to a nonprofit when there’s not much information out there, or if you’re wary of scams. If there’s one piece of advice Thatcher can give donors in that regard, he says, it’s to always double-check an organizations’ Employer Identification Number (EIN) — a federal code that can be used to look up any tax-exempt organization.
“When you’re talking about barriers to action, I think one of them is that there’s often concern about scams and wrongdoing and misuse,” Thatcher explained. “But when you look at the data… it’s a tiny, tiny portion of the nonprofit sector. You have varying degrees of efficiency and effectiveness in the sector, but in general, all our data is showing the fact that nonprofits are doing their best. What’s often the case is that the scams are being conducted by people other than nonprofits. They’re just crooks, lookalikes. And that’s where the EIN number comes in.”
Find charities that align with your values
As the industry moves toward even greater transparency, Thatcher explained that there’s a simultaneous change in how people find places and people to give to. “Giving is now becoming very values-based. As I like to think about it, causes grab you by the heart and say, ‘Go do something about this.’ Then you go out and find a charity that’s actually addressing it.”
Value-driven investing has already been on a decade-long rise in the form of environmentally and socially-responsible Environmental, Social, and Governance (ESG) funds, which let individuals invest their money in funds that actively uphold their own values, like anti-gun manufacturing. And, obviously, charitable giving has always been driven by the personal beliefs of donors themselves, for better or for worse. But there is a new emphasis on aligning your money with organizations that share both your values and the means for achieving those — and doing so outside of the most “mainstream” nonprofit organizations.
Think before you give, but don’t stop. You actually have to make the move, make the gift, go and volunteer — do something, because we really need people to keep giving.
The Charity Navigator site now provides topic-based lists, such as LGBTQ support, gun violence prevention, and voting rights, as well as trending topic or crisis-focused lists, similar to the directories and hubs created by the crowdfunding site GoFundMe.
If you’d rather start with what’s popular and then narrow down by values, other lists include the Most Followed, Most Viewed, and Household Name Charities.
“Think of this as our first attempt at an issues fund,” Thatcher said. “And the way we’ve set up the lists is you can give to an individual organization within that list, or you can give to the entire list.”
Give to multiple organizations at once
Recently, nationwide social justice movements have re-popularized this mode of multifaceted giving, usually in the form of single donation portals that split funds among several organizations working for the same cause. Supporters have probably seen donation opportunities like this on progressive fundraising sites like ActBlue. Charity Navigator lets you do a similar method of donation through its Giving Basket, a digital cart that lets you add several donations in varying amounts to different organizations, all in a single transaction. It’s like online shopping, but with charitable donations.
The site also keeps a record of your donations and lets you set up recurring payments through the Charity Navigator platform.
“When you look at a complex issue, like the environment, there’s a bunch of different angles to work from,” Thatcher said. “It is a collective effort to address some of these issues, and that’s where personal preference comes in.”
Join a community-driven giving effort
Being an individual donor doesn’t have to mean giving back in isolation. In fact, group-driven donating might be a more worthwhile option for some donors, in the form of Giving Circles. Giving Circles connect individual donors together to make single, communal monthly donations to a specific cause or group of nonprofits selected by the circle members.
In order to support this form of giving, Charity Navigator has partnered with Grapevine, a platform designed to facilitate community organized donations, and Philanthropy Together, a global philanthropy initiative attempting to advance the industry move toward giving circles.
The Giving Circles hub of the Charity Navigator site allows people to search for collective giving opportunities, using filters like location, area of interest, and giving amount. It can also introduce donors to topics they might never have heard of, like the Decolonizing Wealth and Liberated Capital movement, or nonprofits that weren’t yet on their radar, like those in the Latino Community Fund’s network.
Charity Navigator’s updates are just one part of a growing movement to revolutionize the way people conceptualize philanthropy and how individuals participate in communal care. But at their core, these practices exist beyond any technical or digital tools. They’re built into our social and emotional history.
“Listen to your heart, use your head, and then go out and make a difference,” Thatcher said. “Think before you give, but don’t stop. You actually have to make the move, make the gift, go and volunteer — do something, because we really need people to keep giving. That’s one of the beautiful things about being human: We care for each other.”
This story was originally published in 2022.