Charity Navigator has gotten a lot of press lately for a laudable revamp of its system of grading nonprofits, focusing more on outcomes and less on the totally useless metric of administrative percentage. Good for them, and I hope other online watchdogs as well as foundations and government funders pay attention to Guidestar's process and what they decide to look at.
Here's a New York Times story from yesterday on the subject.
Measuring true outcomes is often very, very difficult; something more funders need to both recognize and fund. Fewer and fewer charities are playing the old game of "we're doing good, so give us money and trust us". Some are still trying to sell their activity levels "we saw 300 people this month as opposed to last month", but more are concerned with outcomes, as in "we got 23 people living wage jobs this month that will help them become more self sufficient."
This is an issue all of us need to keep up on.