Reassessing Assessment: How does GENESIS have an advantage over Charity Navigator and other monitoring sites?

Robert Moreau

Research Analyst/Outreach

With a desire to donate contrasted by an unsteady economy and an abundance of non-profits and projects, philanthropists want to make sure their money is put to good use. In response to these concerns, sites such as Charity Navigator and GuideStar have surged to prominence and media exposure.

While the increased scrutiny of what organizations do with charitable donations is a positive trend, these evaluators’ exclusive reliance on quantitative financial data says little about how people are helped on the ground, or other important components that make a project worth supporting. Because of this, a merged assessment model emphasizing qualitative as well as quantitative measurements is a better way to evaluate effectiveness.

The Charity Navigator controversy (or “is a Form 990 really THE definitive measure of success?”)

Charity Navigator, online since 2001, describes itself as “America’s premier independent charity evaluator,” which “works to advance a more efficient and responsive philanthropic marketplace by evaluating the financial health of over 5,400 of America’s largest charities.” Its overview/about us section notes accolades received from magazines such as Time, Forbes, and BusinessWeek, as well as its use on cable programs ranging from “The Factor with Bill O’Reilly” to “The Daily Show.”

Charity Navigator ranks charities that are given a tax-exempt 501 c (3) status, through their IRS Form 990’s. Four years of 990 forms are required by Charity Navigator for evaluation purposes.

From Form 990 information, Charity Navigator ranks charities from 4 stars (“exceptional”) to 0 (“exceptionally poor”), evaluating their Organizational Capacity (revenue growth, expenses growth, working capital ratio) and Organizational Efficiency (fundraising efficiency and expenses, program and administrative expenses) to come up with their final score. More information can be found here.

Rated charities can be found in nine broad categories, with their own subcategories: Animals, Environment, International, Arts, Culture, Humanities, Health, Public Benefit, Education, Human Services, and Religion. It also maintains several “Top Ten” charity lists.

The dilemma of rating organizations through financial scales, however, is that they do not necessarily tell the picture of the services they are providing. As the Wall Street Journal explained in its December 19, 2008 article “Charity Rankings Giveth Less Than Meets the Eye”:

“Like stocks, charities are typically rated by their financial numbers or by qualitative characteristics such as corporate governance-or both. Unlike stocks, charities have no single measure akin to a business profit to determine successful performance. There is a widespread search for such a number, but the challenges may be too daunting. Meanwhile, some of the measures that are used may inspire bad actors to try to game the system.”

An April 2007 posting on netsquared.org is far less charitable in the wording of its assessment:

“The cornerstone of the rating is the program expenses divided by total expenses…this may be useful in weeding out the charities that are literally trying to scam you, but it is a backwards way to figuring out who actually helps people as effectively as possible…the quality of your plan is so much more important than the size of your budget.”

The rest of Charity Navigator’s criteria are even more nonsensical. Charities are rewarded for having growing revenues (i.e., good fundraisers) and growing expenses (so apparently finishing a project or reducing costs is a bad thing)…maybe the “fundraising efficiency” metric would have some meaning if ability to raise funds were at all connected to ability to help people…but that’s just the problem. It isn’t, as long as donors have no sources of real information.

The Gates Foundation…wouldn’t rely on this stuff in a million years.”

Indeed, Charity Navigator’s own ranking system is its self-admitted shortfall. Charity CEO Ken Berger was quoted in a January 2009 article in Washington Business Journal as saying “I think what happens is that some people go to the site, they type in the name, they look at the stars, they leave” despite a website blurb explaining that users shouldn’t just take its ratings as the only guide.

Charity Navigator and similar evaluators, in summary, make an honest effort to educate prospective donors about the organizations they may send funds to. But relying on a blank financial statement or statements such as a Form 990 alone does not tell the whole story of how a project is making an impact.

So, after all this, the question can be asked: Is there a better way? Yes, there is…

The GENESIS approach: Integrating Qualitative and Quantitative Assessment

As an innovative social networker for development organizations, the GENESIS Network’s goal is to “[provide] a highly interactive environment wherein organization members, philanthropists, project community members and volunteers communicate and collaborate effectively,” taking advantage of social media technology to promote a more transparent and efficient system of accountability. More specifically, with GENESIS:

Users can create a customized profile enabling them to actively keep track of projects they support, with tools ranging from regular progress reports to quality assessment ratings from donors, project staff, and third-party monitors.
Beneficiary pages enable donors to build a connection with the people they are helping.
All projects are posted online, with all initial information ratings once approved. Regular updates on progress, including changes, successes, failures, etc. are a strong determining factor in assessing a high-quality rating to an initiative.
Project data includes a clear explanation of finances and where money is allocated, enabling philanthropists to make smart choices about where their donations are going.

Through combining a mix of quantitative and qualitative data, as well as leveraging social media through enabling constant communication between donors, project leaders, and others, the GENESIS Network is actively creating a new standard of assessment and accountability.

For readers: What would you like to see from GENESIS in terms of promoting project accountability? What do you like about what the Network has to offer and where do you think it could improve? Any and all questions and comments are welcome.

Robert Moreau is Research Analyst/Outreach for the GENESIS Network. A 2008 Master’s graduate of the University of Massachusetts Lowell in Regional Economic and Social Development, Moreau has been working for GENESIS since July 2009. His work has included freelance newspaper pieces and a newsletter published for a Lowell-area social services agency in 2008.

Building Bridges: How charities are linking American interests to education abroad.

Robert Moreau

Research and Outreach

Children helped by Kashmir Family Aid, a charity active in Pakistan and Azad Kashmir

As noted in our last piece, philanthropy abroad also impacts important national issues for Americans. GENESIS’ schools, as well as similar efforts from other organizations, form an important part of the puzzle for curbing human trafficking-a modern-day slave trade that extends into and across the country. Indeed, charity abroad with an emphasis on education can advance American interests in other ways as well.

One clear example is in the geopolitical hotspots of Afghanistan and neighboring Pakistan, where NGOs and philanthropists have worked to curb terrorism by building schools and sponsoring students. As Sam Carpenter of Kashmir Family Aid, an Oregon-based nonprofit working in Pakistan and Azad Kashmir, noted in a September 19, 2008 American Prospect interview.

“there’s three types of schools [in the region]. There’s public schools provided by the government and private schools…but there’s another kind of school over there…called a Madrassa, and these are religious schools.”

“The estimates are between fifteen-and twenty thousand of them in Pakistan alone, and then there’s a lot of them in Afghanistan. The long story short is that the kids spend 10 to 12 years-they go in there at an early age, and they learn the Koran, and that’s great, but they don’t learn anything else.”

Bereft of skills, he stated, graduates do not have much opportunities. Carpenter estimated “about 15 to 20 percent are what we call militant schools” that actively prepare students for a career as a jihadist for pay “in our money $200 to $300 a month” considered very lucrative in the area. Though most families want to see their children attend public or secular private schools, he explained, many times the only available choice is a Madrassa education.

Greg Mortenson, co-founder of Central Asia Institute

Kashmir Family Aid, which as of 2008 has sponsored seven schools and 1,500 students, is one organization that has made an impact in the area. Possibly the largest known group active in the region is the Central Asia Institute (CAI), co-founded in 1996 by Greg Mortenson and Jean Hoerni. CAI describes its mission as “to promote and support community based education, especially for girls, in remote regions of Pakistan and Afghanistan,” with the emphasis on girls as a strong potential agent of change in society who make up most of the world’s uneducated youth.

CAI is actively involved with schools in nineteen regions of Afghanistan and Pakistan, concentrated in the central and northern areas of both countries. As of 2009, its total involvement was “131 schools…which provide education to over 58,000 children, including 44,000 girls.” Its work also includes the charity Pennies for Peace, actively involving students in American classrooms in fundraising.

Examples such as these as well as GENESIS’ own education projects show how working with underserved groups abroad ultimately creates a positive impact in addressing issues important to Americans. And it is because of these connections that GENESIS is increasing its scope with upcoming education and training projects in Africa (Ghana) and Latin America (Ecuador). GENESIS is also planning to expand its initiatives in the Middle East as well.

Through linking concerns in America to those abroad, charities such as GENESIS are building bridges in an interconnected world.

Slaves in our backyard. The illegal trafficking and trade of humans into the US and how GENESIS prevents it.

Recently, GENESIS completed a major fundraising drive for its second school in Mae Chaem, Northern Thailand. The new building, which will provide education for 200 children in one of that country’s poorest areas, is also an attempt to rescue potential victims of a modern-day slave trade.

Human trafficking, the smuggling of persons for sexual and other forced labor, is “a heinous crime and human rights abuse. The most vulnerable members of the global community, those who have limited access to social services and protections, are targeted…for exploitation.” It is “now the third most profitable criminal activity, following only drug and arms trafficking” with around $9.5 billion in annual profits, as noted by the U.S. Department of Justice.

The number of people trafficked worldwide annually is widely disputed, but the most commonly cited figure is the U.S. State Department estimate of 600,000-800,000. At least half of victims are children, and the most common destination for trafficked persons is into the sex trade.

Southeast Asia, where GENESIS’ work thus far has concentrated, is the most active region in the world for traffickers; as noted by the International Organization for Migration, “between 200,000 and 450,000” victims are estimated to be trafficked within and out of the region annually. Trafficking in the region is linked to high levels of border crossing fueled by “economic and social push factors…[including] poverty, disparities in economic development, lack of education and job opportunities” among its causes. Irregular or undocumented migration accounts for 30 to 40 percent of all movement of persons, compounding the problem.

But where does the United States figure into the equation? Currently, we are one of the top three destination countries for human trafficking victims, along with Australia and Japan. An estimated 14,500 to 17,500 persons are smuggled into the country annually. As the U.S. Department of Education notes, “cases of human trafficking have been reported in all 50 states, Washington D.C., and some U.S. territories.”

How, then, can building schools abroad make an impact? The causes of human trafficking and its growth are complex, but we note that providing opportunities for potential victims to lift themselves from poverty is a critical piece of the puzzle in fighting it. Indeed, the United Nations has emphasized education and development as ways to combat trafficking. For example, Article 9 (4) of the Trafficking in Persons Protocol calls on states parties to “take or strengthen measures…to alleviate the factors that make persons, especially women and children, vulnerable to trafficking, such as poverty, underdevelopment and lack of equal opportunity.”

GENESIS’ projects complement activities from such organizations as the Development and Education Programme for Daughters and Communities (DEPDC) in Thailand and GABRIELA in the Philippines in emphasizing education as a preventative tool.

By supporting organizations such as GENESIS that emphasize education and opportunity for children in poverty, philanthropists can make an impact on in fighting a modern slave trade and major human rights issue that impacts America as well as the world.