Charity evaluator ImpactMatters has expanded its services by offering data intended to help donors quantify the impact of their giving down to the dollar.
The new service assigns ratings of one to five stars for a charity’s per-dollar ability to deliver services.
The site’s creators, Northwestern economics professor Dean Karlan and Elijah Goldberg, one of Karlan’s former students, say the service answers a question many potential donors encounter when weighing where to donate: How effective is the nonprofit in accomplishing its mission?
“It’s very difficult to find the impact of groups that you’re interested in supporting,” said Goldberg. “We’re filling this gap with a new rating system that takes explicit account of how much good a nonprofit achieves per dollar that it spends.”
ImpactMatters was founded in 2015 as a consultancy to assess the efficacy of nonprofits through analysis modeled on financial audits.
Other charity rating sites, such as Charity Navigator, use data from publicly available tax forms to measure how effectively charities are spending their money.
Critics of services like Charity Navigator argue that such sites are too narrowly focused on overhead as the primary measure of whether a nonprofit is worthy of a contribution.
The new rating system from ImpactMatters will use publicly available information from sources such as government statistics or vetted social-science research — and in some cases, proprietary data provided by the nonprofits themselves — to create a set of service-delivery benchmarks. Charities are measured against others with the same causes, such as reforestation programs or anti-hunger efforts.
So far the service has ratings available for more than 1,000 charities working across eight causes: climate change; veterans; health; hunger; education; homelessness; clean water; and poverty. Visitors to the site are asked to enter the amount of money they’d like to donate to a cause to start a search of ImpactMatters’ ratings database. The search results return a list of charities working in that arena. A search for a $30 donation to “clean water” causes returned 15 charities. The biggest bang per dollar in this search went to Evidence Action, a charity that works to improve water access in sub-Saharan Africa. According to ImpactMatters, a $30 donation would provide clean water to 64 people for an entire year.
Due to its focus on measurable outcomes, some types of charities are harder to measure. As a result, ImpactMatters does not evaluate membership or religious charities where cost effectiveness is not the primary driver of donation activity. They also do not yet evaluate advocacy or research organizations.
“We would love to return to those in the future and see if we can develop a methodology there,” Goldberg said.
Michael Theis writes about data and accountability for the Chronicle, conducting surveys and reporting on fundraising, giving, salaries, taxes, and more. He compiled data for our November report on America’s Favorite Charities, and he recently surveyed pay packages at charities and found wide disparities in base salaries and bonuses among nonprofit causes. Email Michael or follow him on Twitter.
Correction: A previous version of this article misspelled Elijah Goldberg.
