"Not So" GreatNonprofits
in the April/May 2012 issue of the Charity Rating Guide &
On its web site, GreatNonprofits bills
itself as "a place to find trustworthy nonprofits." The site allows
peoplefrom donors to clients, volunteers to employeesto
submit reviews of nonprofits. These reviews are prominently featured
on web sites like Guidestar, Charity Navigator, and JustGive. At
first, this may seem like a good idea. After all, consumers commonly
use reviews on sites like Yelp and Trip Advisor to help them choose
restaurants and hotels. What is wrong with using crowdsourced reviews
to help donors pick nonprofits?
One problem is that reviewing nonprofits
is far more complex than reviewing consumer products and services.
When a customer at a restaurant pays for a meal, he can smell, taste,
and experience it. In contrast, when a donor gives to a charity,
he pays for goods or services that someone else receives.
His review is often not based on any firsthand knowledge of the
quality or efficiency of the charity's programs.
Another problem is the lack of consistency
in what is being measured. Six positive reviews about a charity's
polite telephone operators might be averaged together with one negative
review alleging its consistent racial discrimination against grant
recipients. It is difficult to imagine that most potential donors
or clients of such a charity would consider it to be a "trustworthy
nonprofit," even though this is what its high average star rating
would portend to reflect. A donor also might give a positive review
to a charity because he likes its cause, not based on any knowledge
about how efficiently or effectively that specific charity works
to forward that cause.
As with any review site, it is also important
to consider the reviewers' backgrounds and qualifications. Even
someone who receives services from a charity or volunteers with
one often has only a narrow understanding of the organization, not
a clear picture of how well it operates on the whole. A charity
may provide grants to a handful of needy veterans, sick kids, etc.,
while wasting most of its resources on overhead. The recipients
of the assistance may be quite happy and post positive reviews even
though the charity could have helped many more people with the donations
it received had it been operating more efficiently.
For example, one reviewer of the Childhood
Leukemia Foundation, which receives a nearly perfect score from
GreatNonprofits but is F rated by CharityWatch, praises the charity
for distributing "Hope Binders" that help families of cancer patients
organize bills and insurance information. While these binders may
be useful, they represent just one tiny aspect of the charity's
operations. This reviewer did not weigh more substantial factors
that are representative of how well the charity operates overall.
For example, a note in the group's 2010 audit describes the charity's
promise to pay 75% to 85% of future revenues to outside fundraisers.
This leaves a paltry portion of donations available to help children
An outstanding charity that is unlucky
enough to get a few bad reviews can receive a mediocre rating from
GreatNonprofits. The highly regarded Doctors Without Borders,
which receives an A rating from CharityWatch, receives only 3.5
out of 5 stars from GreatNonprofits as of February 2012. Why? Largely
because two of only six reviewers downgraded the charityone
for a billing error that was not immediately resolved, and one for
a misunderstanding that the charity's low cost of raising funds
was too high.
On sites like Yelp or Trip Advisor, there
are often enough reviews of a particular restaurant or hotel to
get a general idea of how happy people are with the quality of the
food or accommodations they received. But most people know that
if any business has only a handful of reviews, these are far less
reliable since the unreasonable opinions of just one or two people,
either too positive or too negative, can greatly skew the rating.
GreatNonprofits, founded in 2007, boasts that it lists 1.8 million
nonprofits on its site, but only about 12,000 of these have been
reviewed. Of those, many have been reviewed by just one or two people.
For example, the Parkinson Research Foundation, which is
F rated by CharityWatch, gets a perfect 5-star rating on GreatNonprofits.
This rating is based on a single review written by an employee of
the charitynot exactly an objective or independent source.
GreatNonprofits encourages reviews by
biased or interested parties, like the one above. On its website
it states that groups that are not happy with a negative review
can "rally people…and ask them to provide alternate perspectives
to this critical review." By encouraging groups to drum up glowing
reviews from their supporters, GreatNonprofits is letting charities
know how easily they can drown out their critics and receive high
ratings. This may be good for charities, but it is not helpful for
donors who want an honest and objective view.
The Internet offers a bounty of information
about charities, but this can be a double-edged sword for donors.
On the one hand, it is now easier than ever for donors to research
charities. On the other hand, donors must sift through mountains
of information that is often superficial, biased, or simply incorrect.
As a resource for donors, CharityWatch analysts scrutinize charity
financials to provide the donating public with independent, meaningful
information about how charities spend their money. This kind of
information only comes from a rigorous analysis of a charity's finances;
it cannot be gleaned from a few short reviews posted by donors and
volunteers, or by self-interested charity employees and their hired
public relations agents.