‘Tis the season of giving. The holiday season is upon us, and businesses and consumers who want to put more thought into their charitable giving can take advantage of several online tools, including Charity Navigator. Charity Navigator has been providing information about nonprofit organizations for years, and now the site is doing an information overhaul to provide more comprehensive information to donors.

Charity Navigator grades nonprofit organizations by using a rating system. The original grading model focused primarily on financial information to award charities one through four stars.  This left charities with higher administrative costs — but productive and useful services — with a lower rating. That system is about to change.

According to The New York Times“Over the next three years, Charity Navigator plans to add evaluations of a nonprofit’s accountability and transparency to its ratings, as well as research on its impact and research by other organizations.”

Transparency is important in the corporate world and it is only logical that this trend carried over to the nonprofit sector. Donors want to know how a prospective charity will spend donations just as consumers want to know how companies spend their money. As the business and nonprofit worlds continue to increase their transparency, consumers will be able to make more informed decisions.

While Charity Navigator’s database includes information about more than 5,000 charities, it does not provide a rating for every charity. With about 1 million charitable organizations in the nation, grading all of them would take a lot of manpower — manpower that a nonprofit organization like Charity Navigator can’t provide at this time.

So, if you are researching charities for your holiday giving and you don’t find the nonprofit listed on the Charity Navigator site, don’t despair. There are other tools you can use. One such site is GuideStar.

Through the GuideStar site, you can review a charity’s financial data, IRS Form 990s, organizational statistics and more. GuideStar has partnered with Great Nonprofits to share donor reviews of the organization. This is feedback directly from those involved with the organization, including those who have donated to the charity as well as individuals who have received services from the organization. The bulk of the information on the site is available with a free registration but more in-depth information is available with a GuideStar premium membership.

Other tools for your charity research project could include The Better Business Bureau (BBB) Wise Giving Alliance and the American Institute of Philanthropy. While it is the season of giving, it doesn’t mean you shouldn't be prepared. Spend some time researching prospective charities to ensure that the donation you make is a wise move.

Also on MNN: How can I help a charity without sending a big check?

MNN homepage photo: Devonyu/iStockphoto 

'Tis the season of giving
Charity Navigator website helps consumers research nonprofit organizations before they make a donation.