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CharityWatch

https://www.charitywatch.org/

https://www.charitywatch.org/charities

https://www.charitywatch.org/top-rated-charities

The CharityWatch Difference

Say no to robo-ratings. All charity ratings are not alike. Other charity information services use simplistic or automated systems to generate ratings. CharityWatch analysts dig deep, carefully scrutinizing the individual finances of charities to give donors a clearer understanding of how their cash donations are being spent.
CharityWatch ratings are considered the most stringent in the sector. When a charity makes a claim that it spends "90% on programs," donors often wrongly assume this means $90 out of every $100 dollars they donate will be spent on the charity's programs, and only $10 will go to overhead. This is often not the case. Charities have wide latitude to include activities in their program expenses that most donors would not consider to be the bona-fide programs they are intending to support.

Other charity raters simply repeat or repackage at face value whatever a charity reports without adequate analysis of its finances or how it is operating. The CharityWatch rating system is unique in that we carefully analyze a charity's finances and make adjustments to better reflect the goals of most donors who want their cash donations to be used efficiently. We do not allow charities to count the funds they spend on direct mail or telemarketing in their program spending, or to include large amounts of undisclosed and often overvalued donated goods in their expenses, even if their accountants allow them to do so.

CharityWatch is fiercely independent. We do not charge the charities we review to be listed in our Guide or for the right to publicize their rating, nor do we accept any advertising whatsoever on our web site or in our publication. Our board of directors does not include any heads of nonprofit associations who receive their pay from the groups they are watching. Because over 95% of our support comes from small, individual donations, we have the freedom to speak openly and to be critical of the unethical practices of charities, without concern for special interests cutting our funding.

CharityWatch uses reliable information and treats charities consistently and fairly. The self-reported information charities provide in their tax forms or solicitation materials may not be the most useful source of information for donors. Unlike some raters that rely on the tax form alone, CharityWatch reviews a charity's tax form in conjunction with its more reliable audited financial statements, which are produced by independent, Certified Public Accountants outside of the charity. Audits often include information that a charity chooses to not report about itself in its tax form.

The rules governing charity financial reporting leave a lot of room for variation, which results in a great deal of information that is inconsistent, unclear, or even incorrect. Sometimes a charity may be doing an outstanding job with its funds but receive poor ratings from others due to computer-automated or overly simplistic evaluations that do not take into account the complexity of charity financial reporting and accounting rules.

CharityWatch rates charities that other raters won't. CharityWatch is the only national charity watchdog to evaluate social welfare groups that are not eligible to receive tax-deductible contributions such as the ACLU, Human Rights Campaign, League of Women Voters, NARAL Pro Choice America, National Right to Life Committee, and Sierra Club. CharityWatch also rates many religious charities such as the Salvation Army that are exempt from filing a tax form with the IRS but that share their audited financial statements with CharityWatch.

Bottom Line: With no SEC or federal government watchdog, no investors who will sue if given false information, and loose reporting rules, the nonprofit sector has little oversight and much room for financial manipulation. CharityWatch digs deep into the complex and often confusing financial reporting of charities and issues easy to understand A+ to F letter grade ratings for donors who want to know how efficiently their donations are being spent.

The mission of the CharityWatch, a nonprofit charity watchdog, and information service is to maximize the effectiveness of every dollar contributed to charity by providing donors with the information they need to make more informed giving decisions. Our Charity Rating Guide & Watchdog Report contains our A+ through F ratings of over 620 national charities and informs donors about how charities spend your money.

Laurie Styron (@LaurieStyron) was appointed Executive Director of CharityWatch in 2020 after more than sixteen years of commitment to the organization. She served as CharityWatch’s senior analyst through 2012, and thereafter as a program consultant through her nonprofit accounting and consulting practice. Laurie has logged more than 10,000 hours as a nonprofit financial analyst, including advising a wide range of media outlets on investigative pieces involving nonprofits, conducting research and financial analysis, and providing interviews for television and radio, as well as print/online publications. Laurie has been quoted in The Wall Street Journal, Kiplinger’s Personal Finance, MarketWatch, CBS MoneyWatch, Rolling Stone, NBC Nightly News, and by many other media outlets. She has also vetted charities for feature on Good Morning America, and has worked with 60 Minutes and many other news organizations on charity-related investigations.

Laurie’s interest in charity began in her youth, volunteering with her local church choir visiting nursing homes and care centers, as well as summers spent painting houses for the needy through Habitat for Humanity. Laurie spent the early part of her career in various accounting roles at for-profits before transitioning into her first nonprofit position managing multi-million dollar grants at a charity that provides housing and emergency assistance to the homeless. Later volunteer work has included advising arts organizations and other charities on nonprofit accounting and reporting requirements, governance best practices, and program management. Laurie is currently an Affiliate and Not-for-Profit Section member of the American Institute of Certified Public Accountants. She also serves on the Not-For-Profit Organizations Committee and Ad Hoc Subcommittee of the Illinois CPA Society (April 2016 – March 2020 terms).

Daniel Borochoff is the co-founder and former president of The American Institute of Philanthropy (dba CharityWatch), a nationally acclaimed charity rater and watchdog organization founded in 1992. Recognizing an unmet need for information that goes beyond what a charity reveals in its marketing, Daniel filled a unique niche with the creation of a fiercely independent organization dedicated to increasing the efficiency of every dollar donated to charity by providing donors with the information they need to make more informed giving decisions.

As reflected in thousands of newspapers, magazines, TV and radio broadcasts, podcasts, and other media, Daniel has long been sought after for his insights on charity financial reporting and governance, and for commentary on charity fraud and other wrongdoing within the nonprofit sector. He has also been called upon by Congress for testimony on the nonprofit sector’s response to 9/11 victims in 2001; for commentary on charities’ response in the aftermath of hurricanes Katrina and Rita in 2005; and to contribute his expert opinion and CharityWatch’s research to a Congressional investigation in 2007 and 2008 related to wrongdoing and significant waste at charities purporting to help veterans.

In addition to his work with CharityWatch, Daniel has participated in a wide range of activities reflective of his commitment to improving the nonprofit sector. Borochoff was a founding board member of the Hearts and Minds Network and the ePhilanthropy Foundation. He also served on two task forces of the Financial Accounting Standards Board (FASB) responsible for setting accounting standards for charities. Borochoff participated as a speaker and/or panelist for a number of investigative, regulatory, and nonprofit sector organization events, including for the Independent Sector, the Society of Professional Journalists (SPJ), the American Institute of CPAs Not-for-Profit Financial Executive Forum, the National Association of Attorneys General (NASCO), and others.

Daniel retired as CharityWatch president in 2020 and currently serves as an active, voting member of the organization’s board of directors.
https://www.charitywatch.org/about-charitywatch