Donors Prefer Charities that Earn All Four Beacons
Insights from 865 survey participants.
Two years ago, Charity Navigator introduced the Encompass Rating System, affording donors a holistic view of a charity’s effectiveness and reliability through an expansive, nuanced, and evolved method of evaluation, beyond finances alone. The framework illuminates the overall health and performance of an organization in four key areas, referred to as “beacons”: Leadership & Adaptability helps donors understand if a charity has clarity of purpose, Accountability & Finance explains if they are transparent and fiscally capable, Culture & Community shows who they are and how they engage with their constituents, and Impact & Results explains what they have accomplished. Charities are scored in these areas and earn beacons by claiming their Charity Navigator profiles via the Nonprofit Portal and providing additional information on their efforts.
To better understand donor perceptions on beacons, we conducted a survey with 865 participants. The top-line finding is that donors overwhelmingly prefer charities that have earned all four beacons. When comparing a four-star charity with only one beacon to a four-star charity with all four beacons, 79.8% of participants preferred the organization that earned four beacons.
Surprisingly, these results persisted even when donors were asked to compare a three-star charity with four beacons and a four-star charity with just an Acccontablity & Finance beacon score. The only exception to this trend was when the organization was rated as four-star and had earned just the Impact & Results beacon — in this case, 60% of donors preferred the single beacon, four-star charity.
The survey walked donors through various scenarios comparing various levels of beacon completion and overall ratings (zero to four stars). Even when an organization had earned just one additional beacon, donors always preferred the charity with aditional beacons. The preference was strongest when an organization was highly rated on Impact & Results. As one donor succinctly commented, “I like all the detail I can get!” Another shared, “A 4 Star organization w/Accounting & 2 more rates my donation.”
These results mirror Charity Navigator’s internal analysis of Giving Basket donation data from the first quarter of 2023. This analysis found that donors are more likely to give to organizations that have earned additional beacons beyond Accountability & Finance. The increase in donations (an additional 4.8 gifts and $2,706 donated in Q1) was the largest if the organization was highly rated on Impact & Results. Organizations received an additional $516 in donations with the addition of any beacon. Donors aren’t just saying they prefer robust ratings; their donations confirm it.
Savvy donors are now more interested in more than just Accountability & Finance and are prioritizing organizations with high scores across multiple factors, especially Impact & Results. This survey and other analyses demonstrate that the presence of additional information (beacons) can significantly influence giving decisions.