Charity Navigator Loses Major Backer

The high profile, US-based William and Flora Hewlett Foundation has withdrawn its Nonprofit Marketplace Initiative, which funded groups such as the Charity Navigator – the model which the Coalition Government has tipped to replace the Australian Charities and Not-for-profit Commission.

The Foundation has pulled out saying the program is not achieving the results it “had hoped for and sought”.

The Nonprofit Marketplace Initiative was launched in 2006, with the objective of influencing 10 per cent of individual donors to be more evidence-based in their giving.

The comments come after The Chronicle of Philanthropy published an article saying the Foundation would end the initiative and drop support for groups such as the Charity Navigator, GiveWell, and GuideStar to provide data on financial performance.

According to the Foundation, the Nonprofit Marketplace strategy was untested and risky when it started.

“When some of the risks turned out to be true—meaning we were not achieving the results we had hoped for and sought—we made the difficult but sensible decision not to continue,” William and Flora Hewlett Foundation President Larry Kramer said in a statement in response to the article.

In the statement, Kramer corrected the record on several points in the article.

“As the article notes, we launched NMI in 2006 with the objective of influencing 10% of individual donors to be more evidence-based in their giving, a goal we sought to achieve by making high-quality information available about nonprofit performance,” Kramer said.

“Based on independent research and evaluation, we concluded we were not going to meet that goal. And because we are committed to being transparent about our work—both successes and failures—we openly shared our reasons for ending the initiative in a video and blog post on our web site.

“We made the decision to end NMI because of our commitment to effective philanthropy. We certainly were not abandoning the idea, much less repudiating it; nor do we believe the movement will or should ‘lose some luster’ as a result.

“Of course, it helps to begin with an understanding of what we mean by ‘effective philanthropy,’ which scarcely resembles the caricature depicted by some commentators. Effective philanthropy means philanthropy done for a purpose.

“It calls upon donors to choose goals and direct their gifts and grants to organizations that achieve them. It is agnostic about what the goals should be, and (contrary to the suggestion in Mr. [Doug] Donovan’s article) indifferent as between short- and long-term goals.

“What effective philanthropy does require, however, is that if goals are not being achieved, resources should be directed elsewhere.”

Kramer said the Foundation ended the initiative because its strategy wasn’t reaching its target goals, not because any of the organisations they supported were underperforming on theirs.

“It’s an important distinction. Mr. Donovan mentions Charity Navigator, GiveWell, and GuideStar, for example,” he said.

“All three organizations do many things and do them well. We can envision potentially supporting them (or other organizations from NMI) down the road in a future strategy.

“That certain global results we sought from our strategy were unrealized reflects nothing more than the failure of hopes we had about what individual donors might do under certain conditions.”

Earlier this year, Federal Social Services Minister Kevin Andrews named the Charity Regulator as one model that could replace the ACNC.

Charity Navigator is an independent US Not for Profit that posts charity evaluations and compiles charity lists on topics such as Highly Paid CEOs at Low-Rated Charities and Inefficient Fundraisers.