Four-star charity rating is a designation given to the top 10% of charities by the independent charity evaluator, Charity Navigator. While there are other organizations that evaluate nonprofit organizations, Charity Navigator has one of the larger databases having evaluated nearly 200,000 U.S.-based nonprofits. Historically, Charity Navigator used two rating systems: the Star and the Encompass system. Encompass was different from the Star Rating System because it allowed nonprofits to present a more comprehensive view of their organization beyond their finances. Charity Navigator announced that on November 2, 2022, the Star and Encompass rating systems will be unified, creating a singular rating system.
To qualify for a four-star rating, a charity must have a score of at least 80 out of 100 points on Charity Navigator’s rating system, the Encompass Rating System™. This system provides a comprehensive analysis of charity performance across four key domains, which Charity Navigator calls “beacons”:
In our current economic climate, it is more important than ever to attract more donors, increase contributions, and stretch gifts further. Four-star charity rating can aid nonprofit organizations seeking to do this in a number of ways.
According to an article in The Nonprofit Times, it is estimated that charities rated from 3- to the highest 4-star rating can see a 6% rise in contributions, with larger effects seen in smaller charities. In addition to the increase of contributions, the rating system can provide an objective measure of the organization’s performance, as well as give potential donors or grant makers an indication of how the nonprofit is managed and how well it meets the needs of its target population. Additionally, having a four-star rating can help organizations stand out, as donors and grant makers may be more likely to support those with higher ratings. Finally, having a four-star rating can help the organization gain more visibility, as it will be featured on the charity rating websites, allowing it to be seen by more potential donors.
Two key aspects of the four-star rating submission include a financial audit and demonstrating accountability and transparency. To evaluate financial health, Charity Navigator looks at factors such as an organization’s total revenue and expenses - its cash reserve and its fundraising efficiency. To evaluate accountability and transparency, Charity Navigator examines an organization’s governance practices, as well as its program and overhead costs.
With limited time and the need to use funds responsibly, nonprofits are increasingly turning to e-commerce for help in identifying cost savings and simplifying their financial reconciliation process so they can focus on their mission. E-commerce sites can help simplify the audit process by providing a secure and comprehensive view of all financial transactions. This can help reduce the time and effort required to prepare for an audit through:
Using these capabilities can allow nonprofits the ability to spend less time on the process and more time on their mission.
E-commerce sites and online donation solutions are playing a larger role in the gifting process making it quicker, easier, and more secure for donors. Donors no longer need to mail in a paper check or physically visit a donation site. Instead, they can donate online with just a few clicks, often using their credit cards, debit cards, or PayPal accounts. Plus, E-commerce sites have built-in security measures to ensure that donors’ personal and financial information is kept safe and secure. E-commerce sites also allow donors to track their donations and receive automated receipts for their records. Nonprofits should look at these donation websites as a potential way to reduce their costs and benefit from:
Chloe Smallwood, Director of Marketing at Chattanooga Zoo, implemented an online donation solution with the help of Amazon Business, sharing that nonprofits should “Be open to the idea and explore whether Donation Driver can positively impact the work your organization is already doing. In a time where it seems like many organizations are looking to reduce costs, investing in new functionalities may not be a priority though it could help your organization achieve greater efficiencies in the long-run.”
Ultimately, a four-star rating can help nonprofits to succeed in their mission and increase their impact in the community. While organizations are able to receive four-star charity ratings without these tools, E-commerce sites and online donation solutions will provide nonprofits with benefits that can simplify the process while improving their day-to-day efficiency and identifying opportunities to save.
Read more about how Amazon Business is serving nonprofit organizations.
We'll translate the most important information for your browsing, shopping, and communications. Our translations are provided for your convenience. The English version of business.amazon.com, including our Conditions of Use, is the definitive version. Learn more
More languages are available from other Amazon websites.