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Nonprofits – November 30, 2010

Ranking Hawaii’s Big Charities

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.

Best Scores Worst Scores
Hawaii Community Foundation The Contemporary Museum
Hawaii Food Bank Bishop Museum
Institute for Human Services Special Olympics Hawaii
Hawaii Opera Theatre Japanese Cultural Center of Hawaii
Hawaii Public Radio Aloha United Way

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

Editor's Note: Aloha United Way Still Crucial to...

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