I assume that every reader knows about the many online rating services that look at nonprofits' 990 forms and come up with a rating scale. Donors and reporters use these sites to take a first (and sometimes only) look at a nonprofit.
The National Council of Nonprofit associations and National Human Services Council has a paper out on Rating the Raters that I highly recommend you read.
You can find it here.
In the summary introduction to the paper, the authors note:
Our concern, as responsible nonprofit organizations, is not with the concept of ratings or rankings of Charitable Nonprofit Organizations (CNOs), since we agree that donors should be well-informed about the CNOs they are considering as recipients of their donations. Our primary concern is that donors fully understand the information they are receiving from such ratings and rankings so they can make well-informed judgments and not be misled and/or misinformed. There is great potential for these ratings to be misinterpreted and misused, which would cause more harm than good to both donors and CNOs. In the worst case scenario, donors could withhold vital contributions from a worthy organization based on inaccurate, incomplete or misunderstood information they received from an evaluator.
They go on to list a number of excellent findings (some of which are scary) and make eight very solid recommendations on how to fix the system.
Worth your time.
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