I was happy to be part of a news release issued yesterday that dispels the myth of using ratios as the only valid way to evaluate a charity. For more than a decade, GuideStar has preached the mantra that judging a nonprofit’s effectiveness is based on how well that organization delivers on its mission and not by running overhead or other ratios based on Form 990 financials. It’s one of the most frequent issues I speak to reporters about.
As a pioneer in the field of nonprofit transparency, GuideStar has collected information well beyond financials from thousands of nonprofits. Our data collection tool has always included a section where organizations can elaborate on their missions, program activities, and annual outcomes. You might also be interested in checking out two of the many resources we make available on our site: "A Donor’s 10-Step Guide to Giving Wisely" and "Why Ratios Aren’t the Last Word."
Finally, this year, through a partnership with GreatNonprofits, we’ve added third-party reviews to our nonprofit report pages as another way to help donors evaluate how well a charity accomplishes its mission. Thousands of reviews are now available.
We are excited that others share our view, and I commend my colleagues who collaborated on this release for standing together to deliver this very important message.
