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Ranking Hawaii’s Big Charities

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The Hawaii Community Foundation is the best big charity in Hawaii and the Contemporary Museum is the worst, according to Charity Navigator, a national organization that rates more than 5,000 charities across the country.

The ratings are based on a complex formula that takes into account the type of charity and issues such as how much working capital it has on hand, how much it spends on fundraising, and the ratio of money spent on programs to money spent on administration.

Of course, these ratings don’t tell the whole story. To start with, Charity Navigator doesn’t rate all charities, only those with annual incomes exceeding $400,000 that have filed an IRS Form 990 for at least four years; that means only 22 Hawaii charities get a rating.

Also, the latest Charity Navigator evaluations are based on 2008 returns – and a lot has changed. It’s almost certain that, because of the overall economic slump, the financial condition of most charities has deteriorated over the past two years.

The Contemporary Museum, for example, tried slashing its staff and budget to survive but has now thrown in the towel and is quietly working on a merger with the Honolulu Academy of Arts. In that respect, at least, Charity Navigator’s numbers have a tale to tell.

But Charity Navigator’s rating system isn’t without critics. Norm Baker, VP of Aloha United Way, points out that Charity Navigator’s methodology is based entirely on financial data. “On their website,” Baker says, “they actually make a comment: ‘We do not currently evaluate the quality of the programs or services a charity provides.’ ” He believes that by relying on tax information, Charity Navigator’s rating system overlooks the actual effectiveness of each charity. Baker also notes that other organizations have different rating systems. AUW, for example, is an accredited charity of the Hawaii Better Business Bureau.

However, Baker acknowledges Charity Navigator does a decent job of choosing comparable charities. “Maybe not apples to apples,” he says, “but McIntosh to Granny Smith.” Besides, the Charity Navigator website explains its methodology in detail; prospective donors can read it and make their own decisions. When you have 7,000 potential charities from which to choose, any help is welcome.


www.charitynavigator.org
You can also research charities at www2.guidestar.org

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Jul 6, 2011 11:53 am
 Posted by  Zootela

This is the tough road many charities must travel. To read a report like this to select among 7K charities that may, or may not, get my support, should alert charitable organization's leadership that people will take online reports seriously. However, I believe increasing online social communication will allow for a charitable organizations to alter potential negative reports with a positive spin to influence these decisions. Simply protect your online image.

Max Terronez, President, Zootela

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