Nonprofits: Get Ready for Charity Navigator 3.0

One year ago, Charity Navigator announced its plans to incorporate a third dimension into its rating system as part of CN 3.0. In 2016 Results Reporting will accompany Charity Navigator’s two other dimensions: Financial Health and Accountability and Transparency.

Nonprofits took notice and then most kept on working in the same way, by and large ignoring the implications of this announcement. Why? Not because they don’t understand the value of the Charity Navigator 4-Star rating – they certainly do – with more than 7,000 nonprofits currently rated, it’s pretty clear that nonprofits want to be on Charity Navigator. After all, it is a donor’s go-to source of information!

In 2013, 2016 seemed light years away, especially since nonprofits are often forced to work in the moment, for lack of resources. As we enter 2014, it is time for nonprofits to begin taking this seriously: two years is just enough time to get your performance measurement system in good working order to meet Charity Navigator’s new criteria. And, more importantly, to ensure your work is having the greatest possible impact.

Charity Navigator’s Third Dimension has five elements (which you can learn more about here):

1. Alignment of Mission, Solicitations, and Resources

2. Results Logic and Measures

3. Validators

4. Constituent Voice

5. Published Evaluation Reports

Four elements (1, 2, 4 and 5) require that your own performance measurement system is fully functioning and that your organization is using the data you collect to drive decision-making. One element (3) requires an independent third party to assess or evaluate your organization.

To make sure you’re prepared for Results Reporting in 2016, take the time early this year to take a hard look at your organization’s performance measurement system.

1. Does it begin with an intended impact statement that is relevant, realistic, measurable, and specific?

2. Does it include short-term outcomes (less than 12 months), medium-term outcomes (1-3 years), and long-term outcomes (3+ years) that are clearly linked to the intended impact statement?

3. Has your organization developed metrics (or indicators) by which to measure these outcomes?

4. Does it include process indicators by which you can measure your organization’s ability to provide the services you aim to provide?

5. Does your organization have a culture in which all staff regularly collect, analyze, report on, and use data in their work?

6. Is your organization regularly assessed by a third-party validator?

If you are unsure about the answers to any of these questions, you need to start preparing today. It takes time to develop a top-notch performance measurement system, but in the long run, the payoffs are well worth the investment.