In Part I of this two-part article, we summarized the features and criteria of six of the best known "charity raters" including Charity Navigator, Better Business Bureau, and others. Many readers added thoughtful comments and noted lesser-known raters as well; we encourage you to read Part I and the posted comments.
Here in Part II, we offer advice to nonprofits on managing their ratings, and comment on the impact of the raters as a whole.
Just two weeks after we published Part I, an unusual three-some of Guidestar, Charity Navigator and the Better Business Bureau issued an unexpected but welcome joint statement " denouncing the "overhead ratio" as the sole measure of nonprofit performance." (emphasis added) (overheadmyth.com) The statement also defends overhead to an extent: "Overhead costs include important investments charities make to improve their work: investments in training, planning, evaluation, and internal systems -- as well as their efforts to raise money so they can operate their programs. When we focus solely or predominantly on overhead . . .