 and thank you to each and every one of you for joining us for today's episode of The Nonprofit Show. We are getting to know Charity Navigator today and really thrilled to have Ophira with us joining us today. So thank you for joining us and we're looking forward to diving into this conversation. Julia Patrick is here, oh, with a new photo. So I don't look like my mother. It's all photo, just black and white and everybody was like, I didn't know you had gray hair. I'm like, oh, I think it looks great. Julia Patrick is the CEO of the American Nonprofit Academy. I'm one of her fan favorites. I'm here at Ransom, also known as the Nonprofit Nerd CEO of the Raven Group. And of course we also like to extend our deepest gratitude and appreciation to our presenting sponsors. Julia and I are so extremely appreciative for this continued investment and support. Not only here in these shows, but truly in the sector at large, these companies exist to help you do more good. So again, please do check them out and let them know that you saw them here. And again, just really grateful to have their continued support. And back to today's conversation. Again, I am super thrilled. I've seen your name, Ophira Bondarowski. I have to say it because I practiced it on our master calendar. And today is one of those days that I've truly been looking forward to. So Ophira, you join us from Charity Navigator and you are the director of ratings and nonprofit engagement there. So welcome. Thank you. Thank you for having me. You know, Ophira, you're what we would call in the business a big get. And the reason why is that Charity Navigator is like one of those things that is a little bit of mystery. It has a lot of gravitas. It's very prestigious. And everybody kind of wants to know how it works, how you get it, how you interface with them. And so I mentioned this pre-show. I think we could use you for like four hours, but we've only got 30 minutes. So we gotta make the best of it. And I wanna start with this. Give us the quick sense of your history and your organization and what you started to do and kind of then we'll move into what you are doing. Cause it's a lot. Yeah, it's a lot. We've been around for roughly 20 years. And at its inception, Charity Navigator really focused on informing donors in ways that were meant to help donors avoid organizations that may have been illegitimate. And really just kind of focus on validating the organizations that file 990s that are engaging in accountability and transparency practices that we believe are kind of the pinnacle of what you would require to trust an organization, at least fundamentally. In many ways that kind of Garner Charity Navigator reputation of being a watchdog of sorts. Cause we were focused on looking out for those organizations that might not be as credible as you would want them to be before giving to them. That said, over the last several years, I would say at least the last six years since our CEO has joined Charity Navigator, there's been a dramatic shift in how Charity Navigator views the nonprofit sector, how we work with donors and nonprofit organizations to engage them and to really bring them together in ways that are focused more on highlighting performance, organizational performance, effectiveness, efficiency, trying to shed light on which organizations out there may be achieving better results and doing what we can to do that for the sake of enabling them to hopefully access better funds and fundraising abilities. And so in that way, we've also managed to help nonprofits pay closer attention to factors that we believe may be most critical to strengthening the nonprofit's organizational effectiveness and helping them improve their success in achieving their missions and then making it easier for donors to find those organizations that may be more impactful. So Fira, I feel like, and if my dad's watching, he'd be super proud of me because I'm never someone who can remember years, but I feel like 2012 was a really pivotal year for nonprofits. In particular, the IRS decided to take a close look, very close look to 501s across the nation to truly legitimize is this a legitimate organization? And I'm just curious. I mean, do you remember 2012? First of all, was that even the right year? And then really those steps that were put into place from the IRS, but I know Charity Navigator had a great opportunity and platform to truly elevate the voices and the mission of those organizations that are doing good. Absolutely. So the IRS did build in several years back now accountability and transparency-based questions, right? That's helped a lot because it enables Charity Navigator to then pull that information in and utilize it as part of our assessment of an organization's practices in addition to evaluating their financial metrics ratios, financial health and wellbeing. But what we're doing now is actually pivoted away from a sole focus on the form 990 which is the tax return that nonprofits file and attempting to build a much more comprehensive and robust evaluation platform or framework to take a closer look at variables, domains that influence an organization's ability to succeed to basically achieve on their mission and their goals. And that's even with the added metrics, variables, questions that the IRS has put into the tax return, that's still not really enough to wrap your head around whether an organization you're interested in supporting is positioned for success, is likely to be impactful, achieve the results that you'd want them to achieve with your donation. So we've had to branch beyond the tax return. That's what we're working on now. Actually, yeah. So talk to us about how you are working on that because the 990, I've heard so many accountants say use it as a brochure, use it as a way to communicate what it is you're doing. And yet within that framework, it's cumbersome, it's not easy. What is it that Charity Navigator is adding to this? Well, I will say that that's good advice because it is a great starting point. So I'd wanna hear more and more accountants telling their nonprofit clients to use it as a brochure because all too often what we're seeing are 990s that are incomplete or that have one and two word answers or don't have right mission statement or misspellings and typos. And yet that is kind of the beginning of how we evaluate a nonprofit at the outset. So it is important that nonprofits pay close attention and promote their top programs that they are funding and services that they are providing because that is our starting point as well. That said, the traditional rating system that most people may be familiar with for Charity Navigators are Star Rating System. And that Star Rating System had some impediments that were built in unfortunately at the outset that made it difficult for us to fairly assess many nonprofits out there that were smaller, that were newer, maybe didn't even file the form 990 electronically. And as a result, we really heard from a lot of nonprofits out there saying, hey, we wanna be rated, we tried to educate donors and said, if an organization out there doesn't have a Star Rating if they're not eligible for the rating system it doesn't mean you shouldn't trust them you should still take a close look at them. It's just because our system was built to really evaluate more established larger organizations. And unfortunately what we saw on our site for years was that donors just didn't trust the advice we were giving them and didn't feel comfortable donating to a nonprofit that did not have a Star Rating. And as a result, it forced us because it was a negative yet unintentional albeit but negative consequence of our system. And so we went back to the drawing board and we said, we've got to do better by the sector. And so began developing a framework that could fairly evaluate new and smaller nonprofit organizations that had a budget size of less than a million, a million. And that's many nonprofits out there we see many, many of them out there with $250,000 budgets, $500,000 budgets. And so we had to devise a formula for evaluating those organizations and doing it in a way that was more comprehensive that stretched far and beyond what you can glean from the 4-9-9-D. It was the beginning of the Encompass Rating System which we launched last summer. Okay, I love two things. I love that you actually could look inward and determine that you needed to chart a different path. So it sounds to me like once you started doing that you did come up with this Encompass. Speak a little bit more about that because I think you're right about that lower level nonprofit. Yeah, I mean, our ultimate goal is to make it easier for donors to find nonprofits that they wanna support and cause areas that they are committed to or feel strongly about but to identify those nonprofits that may be better positioned for success, right? Success being achievement of their mission and goals. And so the Encompass Rating System is our effort. It's the initiative that we launched last year to do just that and beyond the financial health and sustainability metrics that we review which we've tweaked and adjusted based on smaller scale revenues and budgets. But beyond that, looking at other aspects of an organization's existence that affect the likelihood that it's going to succeed looking at their leadership and adaptability practices looking at their strategic goals. Are they positioning themselves for growth? Do they have a set goal to actually downsize and focus more on their core mission? Looking at culture and community. Is this an organization that is engaging their beneficiaries listening to their constituents then using that data to improve their performance and their service delivery to their beneficiaries? Looking at aspects of impact and results. And we've started with one methodology that we're building out, looking at primarily cost benefit of program versus results and we'll be branching out from there at various methodologies that also shed light on whether or not an organization is achieving those results. And all of that goes much farther beyond the financial health and accountability metrics that folks have been accustomed to seeing on Charity Navigator and truly helps nonprofits better tell their story. We've also, as a part of this, launched a nonprofit portal that enables nonprofit organizations to set up an account with us and respond to survey questions and provide us with data that then is published on their profile page on our Charity Navigator site. So it's a direct line to potential donors in the Charity Zone words. So we've really, and you can see this season as part of my title, we're really committed to engaging the sector and to lifting the sector and to helping donors better identify, more easily identify those nonprofits that may be stronger within those areas. I really commend kind of echoing what Julia said that the organization was able to look inward to say, how can we do this differently? And how can we do this in a better way? I will tell you, donors are becoming more and more savvy at all ages, like really individuals of all wealth capacity are becoming very savvy in finding information about an organization and they're asking questions. They, the donor, the supporter, they are asking questions, but they're also doing their own due diligence on platforms like Charity Navigator. I told a story many, many, many episodes ago about how I met with a major donor for an organization and they literally had a printout of Charity Navigator and said, because of what we see here, we are not comfortable making this size of a donation. And I was floored because I had never encountered that experience before but this donor literally said, you correct this and we'll talk again, you know? And I said, great, okay, now I know exactly what I need to go back and do. So... Yeah, when we do, we definitely wanna continue educating donors. We wanna make sure that they're asking the right questions. Sometimes, we hear from donors that they may be overly, sounds like they may be overly focused on things like overhead. Try to correct that because, you know, overhead is not a taboo bad thing. Organizations are not, you know, all run on volunteerism and they have to pay their staff and they have to keep the lights on and in order to expand and reach more beneficiaries, sometimes you have to invest in capacity building efforts that may show up as overhead and oftentimes donors incorrectly assume that because an organization spends more than 10 cents on the dollar on anything but program that they are somehow mismanaging their monies and in fact, that is not the case. And so we wanna make sure that we do our part to educate donors to be asking the right kinds of questions and help nonprofits as well again to better tell their story, communicate what you're investing in, how you're positioning yourself for growth, what your mission and goals are so that donors can better understand some of the financials that they may be seeing that's often taken out of context. When it's really that tool for advocacy, you know, it's really that tool to help tell your story and to broaden your reach of investors and supporters. So I think that's, you know, critical to the knowledge is to see Charity Navigator as a partner in your success. Absolutely. So let me ask you this to kind of step back a little bit for the folks watching us live and then the thousands of people that will also find this on our show, you know, in our archives, would you recommend that like one of the first things is they go to Charity Navigator and open up an account or start their own page to get that conversation or that information flowing? I mean, what does that journey look like for the average nonprofit? So if they are filing a Form 990 tax return, we're receiving data on them. The data that we receive is automatic and it flows directly to us from the IRS. But what I do recommend wholeheartedly, yes, go to Charity Navigator, take a look and see what is being published on your nonprofit profile page. And then if you haven't done so and you are an organization that files a Form 990 because many nonprofits don't particularly small ones maybe filing an easy or some other type of tax return that wouldn't be in our catchment group. But if you are an organization that is filing a Form 990 two years of an electronic Form 990, we'll start garnering you ratings on our site. But besides that, you can engage with us right away. You can open up an account through the nonprofit portal. You can start providing us with direct responses or questions that we have about your leadership and adaptability practices. You can provide us with data. We actually partner with other peers that are collecting data. For instance, Candid right now on their site is collecting data on constituent feedback, which then we ingest and use as part of our rating system. And again, it is a way for a nonprofit to communicate their story to the general public. How are you listening to your beneficiaries and how are you using that information to improve your program supports and services? So yes, I would definitely recommend a nonprofit go visit us for their page on our site. And I love that you just mentioned Candid and the collaborative spirit that the two organizations and entities are really able to benefit from one another as well as the sector at large. So again, kudos to you. Yeah, that's amazing. So team players, we're working a lot up here organizations out there. That's great. Different initiatives. Yeah, and I think in the sector at large collaboration has really been one of the key pillars of I think the sector success. I always see us as one big puzzle piece. The community is one big puzzle and we each have a piece to put into this puzzle for it to really make the visual image that it's meant to make. So when we collaborate and put our piece with the partner at the right time. So again, I'm just really glad to hear that. You know, one of the things that I thought was interesting and we don't have much time. And like I said, we could spend an easy, a quick four hours with you. Hours, yes. So we'll have to get you back on because I have so many questions but one of the things I noticed was this giving basket concept. And I would love it if you could share some pieces of that with us because you know, so many nonprofits especially the smaller ones, they have this angst about the online donation, how they administrate it, how it is working, how it's growing and the pandemic has really pushed that forward more quickly. And so could you talk to us about what the giving basket is and how you all work that? So the giving basket is our, it's our giving platform or donation platform. It's built into our site. If you land on a nonprofits page you will see a donate button that says donate now to this nonprofit and it will take you to our platform. You can donate as much or as little as you like. The money goes directly to the nonprofit charity navigator unless you drop us a tip or donate to us directly charity navigator does not take a cut of any amount of money that you allocate to that nonprofit that you've chosen. The beauty of it actually, if you're somebody who is a major supporter of the nonprofit sector and you have lots of causes and we have plenty of donors that do, they wanna support animal rights and animal shelters but they're also keen on after school programs and maybe community centers and they're kind of spread out environmental causes whatever, so you can actually have it all in one place. You can give, you can donate, you can have a record of it in your charity navigator account so you can revisit it. You can also set up a recurring monthly withdrawal and I always say, don't underestimate what 20 bucks a month can do. If hundreds of millions of us gave 20 bucks a month it all adds up and we do have many donors that use our platform in that way. They'll set up a recurring monthly withdrawal for a particular nonprofit or nonprofits that they wanna support and then they have the necessary information that they need to write off any charitable giving. So we try to make it as easy as we can for donors to give. On the organization side, fundraiser hat here. Does the organization receive all of the contact information then for that donor? So the organization will receive the information, they will receive and I think it happens on a monthly basis, they will receive funds from the donor and the donor can share that information but we do have some privacy policies in place as well and are keen on not sharing information that donors may not feel comfortable. We have anonymous givers. Oh, yes, absolutely. I want to be known. That this was an option, I'm already thinking there's so many organizations under that million dollar and honestly, Afira like really under 200,000 that I think could benefit from this platform and having that as an option instead of maybe some of the other band-aids that are in place right now I think that this might be a better route. So I know I'm leaving today's conversation with a nugget of information to help implement in my community. So that's great, I'm gonna have to check it out. It seems like a wonderful way to tag your nonprofit into the ecosystem of charity navigator and at the same time help build credibility and then perhaps get in front of donors that are outside your community or outside your purview or that you haven't been able to reach them or communicate with them. It could be a really interesting component of building some new relationships. Yeah, I think so. Wow, well you've been, you've just got my mind racing. Afira, I'm so delighted that you would come on and share with us what you all are doing and how this really impacts our sector. As we move forward in this really critical time of the year with end of year giving and all of these things that are going on and not going on because of the pandemic this becomes really, really important. And so we are delighted, delighted that you would come and share your path and what's going on. CharityNavigator.org, check them out. The site is incredibly robust and it really does show you all of these different things that they're doing. And Afira, I think my view when I was spending some time on the site was that and you touched on this briefly but it seemed to me like it could give a nonprofit some ideas of what's important. The vocabulary, the thought leadership, the things that are, that should be part of what you are talking about with your donors. And I don't know if you, if that's strategic or if that was just my observation. No, that's exactly our goal for the sector is that they take a look at what we're evaluating what we're assessing and pay close attention to it and how it may apply to their organization or how they may strengthen some of those areas some of those domains. Because if we are rating it, if we're evaluating it then we have very good reason to believe either through analytics of what we have evaluated over the over the last 20 years of nonprofit charities and our own internal expertise or from published research and from working with peer organizations that these are elements that should be at the forefront of an organization's planning their thinking their strategic positioning for success. And what you'll note is that with the encompass rating the weights have shifted dramatically financials are not the most important thing in our view. We are definitely, we put a stake in the ground we are very committed to bringing more information on impact and results. And we know that in some cause areas and in some nonprofits that might cost more that might take longer to achieve. And so the financials do not tell the whole story. And so we are working in that direction and doing the best we can. And it is an iterative process. You're gonna see us release three times a year either new metrics, new and improved versions of our domains with an encompass we call them beacons or in some cases you may see adjustments to weights and scores. We amplify or tune down based on what the data is showing us. So it is an agile process that we are constantly refining and improving to do justice to the sector and do at the same time educate donors and bring those donors with those organizations that are most likely to be achieving results closer together and make them easier to find one another. Wow, well this has been great. I mean, this might be like one of my top top episodes for the year because what you've brought to us is something that there's just all this mystery surrounded by. As we mentioned, it's very prestigious and yet it's full of fear and just the transparency and how you've shared with us on what you all are doing is really exciting and it can only help to strengthen our sector. So, fabulous. Ophira Bondarowski, really cool to have you on and to come before us. We are super, super appreciative. Check out Charity Navigator and get yourself registered or a page with them if you haven't already. Again, I'm Julia Patrick, CEO of the American Nonprofit Academy. I've been joined today by the non-profit nerd herself. Sharon Ransom, CEO of the Raven Group. Again, we wanna thank all of our presenting sponsors. Without you, we would not be here having these amazing conversations. Charity, we're in 360 plus, plus, yes. 370, it could be 370 now. It's been phenomenal. I talked to someone yesterday and they're like, that's like two, three a week. And I'm like, that's week, like daily, you know? Like clearly you're not great at math, but that's okay. It's been daily and we are so appreciative of our sponsors to keep these conversations going and growing. I don't think 370 episodes ago we would have been graced with the presence of Charity Navigator. So again, thank you so much for coming on. I really do think that, you know, not only investors and funders are kind of that fear of the unknown, but also these platforms like Charity Navigator and Candid and others, it's just kind of like, who are the people behind these platforms? And here is one of those masterminds and rock stars in our sector. So thank you so much for sharing your time and expertise with us today. Thank you so much for having me. It's been great. It's been amazing. And as we end this episode of the nonprofit show, we want to remind everyone to stay well so you can do well. We'll see you back here tomorrow, everyone. Thanks so much.