Why Charity Navigator Isn't One-Size-Fits-All, Especially for Social Enterprises

why the assumptions charity navigator makes about responsible financial management are misleading

Part of the Complexity Series

Charity Navigator advertises itself as the authoritative source on responsible nonprofits. By combing financial data and assigning a score for things like fundraising, administrative, and marketing costs, along with transparency standards, it ranks nonprofits in order of best to worst.

This sounds really good on its surface, and it is a useful way to compare the efficacy of large scale nonprofits. After all, if you're donating your hard earned money to a charity, you want to know that it's going to programs that support the stated goals of that charity, not to CEOs and fancy business cards.

But there's a big problem with the way that Charity Navigator calculates financial health, and it perpetuates a damaging misconception about charities at large: nonprofits receive a better score the less they spend on management, labor, and advertising costs.

While differences in industry are accounted for (food banks, for example, are thought to require less overhead than nonprofit radio, and the 1-10 scale accounts for this to some extent), you will always receive a higher score if you have less overhead than competing nonprofits.

And while this makes sense if you're comparing apples and apples (two food banks with similar outputs but drastically different overhead costs, for instance), it gets weird when you, a site user not familiar with the inner working of nonprofits in general, peruses nonprofits across categories or clicks through one of Charity Navigator's multi-category lists.

How Charity Navigator Penalizes Small Nonprofits

When the primary metric ingrained in your head is "lowest possible administrative costs," you're simply not going to see the big picture.

One reason is that, if the nonprofit in question is small enough, it's very likely that they'll be penalized by Charity Navigator for having "high" overhead costs even if they're only paying a modest salary for a single employee. I'll use myself as an example. My salary makes up almost half of annual sales at the thrift shop where I work, and this isn't because I'm making bank. In fact, I make at least $5,000 less than the average, lowest paid nonprofit worker in my area, according to a recent report by the Center for Nonprofit Excellence in Charlottesville.

Now, it might be a fair assessment that our charity model is, holistically, not healthy. But in many ways, we're more like a food bank - dealing in goods more than monetary funds - than a big nonprofit like the ACLU. So every dollar we bring in after expenses is donated to local agencies and we're able to completely support ourselves without outside funds. We also give away thousands of dollars in goods to low income families each quarter. According to Charity Navigator's assessment, we should be running with administrative costs making up only 3% of our budget in order to receive a perfect score. This would mean that we'd need to be almost 100% volunteer-managed, and that would be ok in the short term, but it gets really hard to create a consistent environment running on multiple, overworked volunteers.

"Administrative Costs" are People

You might be thinking, "Yeah, Leah, but your nonprofit isn't going to be listed on Charity Navigator, so why does this matter?"

It matters because this mindset that administrative and marketing costs are bad affects all nonprofits, big and small, and potentially gets in the way of raising more funds and effecting more change. 

According to an article published in 2016, changes to overtime pay requirements under the Obama administration left nonprofits scrambling because it meant they were no longer able to pressure their salaried employees into working long hours without pay. The reason? Due to oversight agencies like Charity Navigator and larger individual and corporate donors, nonprofits can't simply put more funds into overhead, and this means they actually had to reduce staff, rather than hire more employees, to make ends meet. If you're a Republican, you may be shaking your fist and saying, "Thanks Obama," but if you're at all interested in fair trade standards, you'll recognize this as a travesty. Nonprofit employees should not have been working for free in the first place.

A few years ago, I read a blog post written by a nonprofit employee about another barrier to fair pay in nonprofits (the whole site is a great resource). The author said that donors, across the board, don't want to hear that their funds are going to hire staff. Instead, they want to hear that it's benefiting a special project or going "directly to [insert person in need here]." But you can't run an organization without competent, knowledgeable, engaged staff. Not to mention that the organization is significantly more likely to mishandle funds or even fail if it has high turnover or incompetent employees.

This is all to say that an "administrative costs" line item on a transparency report is really just code for people, the people who make things happen, sign your donor letters, and write effective advertising. Insisting on the lowest possible cost puts all nonprofits at risk of grossly underpaying their employees, and that goes directly against fair trade principles.

To their credit, Charity Navigator is aware of the issue. In collaboration with GuideStar and BBB Wise Giving Alliance, the organization wrote an open letter on the "Overhead Myth" in 2014, but the public bias against overhead costs persists.

"We Don't Advertise Because We're a Nonprofit"

I hear this all the time from well-meaning fair trade agencies and social enterprises looking for some coverage on my blog. They've been convinced by the predominant rhetoric around charity - further legitimized by sites like Charity Navigator - that it would be irresponsible to monetarily promote their goods or services.

Charity Navigator penalizes organizations that dedicate a large part of their budget to advertising when, in fact, advertising is really the sole vehicle by which funds and other donations are generated.

Whether that advertising is word-of-mouth, slapped on a flyer, or paid for in a marketing campaign, it all counts. Again, comparing apples and apples, the organization that can most effectively garner funds without major advertising costs is more responsible. But it's easy, if you're not considering scale, to think that 1 million dollars, for example, is too much advertising even if the dividends are double or triple that.

Especially when you're growing a nonprofit, you need to invest heavily in both advertising and labor. As the structure stabilizes, hopefully you'll be able to build more efficiencies into the system so that your actual programs receive a higher and higher proportion of donated funds.

Nonprofit social enterprises need to understand that part of running a healthy organization is strategically investing in skilled labor and appropriate advertising mediums to ensure that the organization can thrive. That means that it's not always important to meet rigid budgeting criteria. Instead, nonprofits should be measured both individually and in comparison only to similar size, similar mission organizations. When internal structures and goals differ, as they do across every well-meaning organization, it's hard to build a one-size-fits-all assessment system.


Ultimately, this post is not meant to deter people from using Charity Navigator when deciding to whom they should donate. Because the site primarily compares large, multi-national NGOs and nonprofits that have the resources to ensure sustainability in their financial goals and budgets, the standards are, in most cases, fair.

But it would be a mistake to hold every organization to the same rigid metrics, especially if that comes at a cost to providing living wage jobs to overworked nonprofit workers or using advertising dollars to achieve exponential growth.

  • Potential donors should consider the holistic story of the organization before taking the easy way out, and remember that the long term viability of any business or nonprofit has to do with taking on the right investments, never sacrificing worker welfare for the sake of an impressive financial report.

  • Nonprofits and social enterprises who create and/or sell physical goods should consider that they're a hybrid business-charity and thus their business model must be adapted to compete in a crowded retail marketplace. Without investing in advertising, they won't be able to sustain the business for the benefit of their artisan partners. And there are few things worse than promising a marginalized community you can change their lives and then not following through.

I'm curious to hear from other nonprofit workers or social enterprise owners on this topic. Anything you would add?


why the assumptions charity navigator makes about responsible financial management are misleading

How the Cruelty Free Label Oversells Veganism

cruelty free isn't the same as vegan

This post is part of the Complexity series: posts intended to explore social justice and ethics issues with nuance, understanding, and ultimately hope. I will bring in several guest writers throughout the series, so stay tuned.

Written by Stephanie Villano and originally published on Here & There Collective. Reposted with permission.

Even if you aren’t vegan, you’ve probably noticed that veganism has been gaining a lot of momentum in the last year or so, and seems generally accepted as more of a mainstream lifestyle instead of a fad. 

With so much more visibility, you’ve probably also heard the lifestyle referred to or promoted as “cruelty free.”

The unofficial mantra of the ethical vegan movement, the phrase is proudly emblazoned on vegan apparel and handbags, or hashtagged in social media posts promoting the lifestyle.

Ethical vegans abstain from consuming or using any products made from or tested on animals with the goal of willfully causing as little harm to other living beings as possible. By refusing to participate in industries that exploit and commodify animals, many ethical vegans bill their lifestyle as one that is free from cruelty.

As someone who has been keen to shed labels as of late, I would still identify as an ethical vegan if pressed to describe my philosophical beliefs - they’re by and large in line with the ethos of the movement.

But, labeling an entire lifestyle as free from cruelty is misguided

I can understand the impulse and the appeal of using the phrase "cruelty free" in the context of describing the conscious choice to eschew products made from harming animals - living a life without harming bringing intentional harm to other living beings is the very essence of living a cruelty free life, after all. And I am certainly guilty of using the term “cruelty free.” But, I’ve been trying to become more aware of when and how I use it and honestly think the movement should let the phrase go entirely.

Words matter.

So does context.

And I think it’s important to consider the ways in which labeling an entire lifestyle “cruelty free” as inaccurate and actually undermines the overall message - which is to live a life intentionally and consciously, with kindness.

Here’s why.



Honestly, unless you’re eating hyper local, package free, organic, in-season whole foods, making your own clothes, or buying second hand - well, your lifestyle isn’t cruelty free. (and congratulations if you’re able to live up to that standard- but I would imagine that it’s not practical or possible for the lot of us)

I realize that the focus of the ethical vegan movement is to promote the idea that animals are not ours to use or consume, but a lifestyle that is supposed to be about compassion toward all living things should consider human beings as well.

So even though your vegan meal might be absent from intentional cruelty to animals, there might be some ingredient that involved cruelty to people at some point in its supply chain.

For example, how did the bounty of fruits and vegetables get to your local grocery store?

cruelty free isn't the same as vegan

From tropical fruits like mango and dragon fruit piled high in bins in markets in New England, to bright red tomatoes of all shapes and sizes available to shoppers in Chicago in February, we’ve grown accustomed to enjoying a veritable cornucopia of whole foods all year long.

Each and every piece of fruit and vegetable we enjoy was picked, packed, and processed by a human being. If out of season, those same fruits and vegetables were shipped many miles to reach the produce section of your local market, adding to its carbon cost.

And while we might envision idyllic family owned farms brimming with succulent fruits being happily picked by farmers, the sad truth is that the industrialized agricultural industry is rife with human rights violations and what is tantamount to modern day slavery and debt bondage.

No one knows the extent to which modern day slavery is prevalent in agricultural work, but it is certainly a known problem and the most at risk are seasonal workers who are tasked with the grueling and laborious job of harvesting, enduring long hours in harsh conditions.

If you’ve ever enjoyed fruits or vegetables out of season, there’s a good chance they came from Mexico. As the United States’ largest exporter of fresh produce, Mexico is responsible for much of the fresh fruit and vegetables we find, year-round, in our grocery stores.

In 2014 the Los Angeles Times uncovered cruel and inhumane living and working conditions endured by thousands of workers across farms in Mexico. Laborers were found crammed into dirty, rat-infested housing units, many of which lacked beds, and some which lacked functioning toilets or a reliable supply of water.

Wages were often illegally held from workers to prevent them from leaving during peak harvesting periods. There are many reports of workers who attempt to leave, but are subsequently captured and beaten.

Furthermore, as seems to be common in the agricultural industry, workers were forced to pay inflated prices for necessities at company stores, which often put them into debt. Many workers end the season with nothing to show for it because their entire pay goes to paying off their debt. The inability to save despite working long hours is part of what keeps many of these laborers in cycles of poverty. And this is just one investigation. There are countless other examples of exploitation, forced labor, child labor, and wage disputes happening all over the world, including in the United States, on farms where our fruits and vegetables are grown.

Not All Vegan Diets Are Created Equal

cruelty free isn't the same as vegan

You might be the vegan who eats exclusively plant-based whole foods, but you also might be the vegan who subsists on Fritos, Doritos, Oreos, fast-foods, meat substitutes, and other unhealthy, heavily packaged, processed, unsustainable palm-oil laden delicacies.

We all know that plastic is a major environmental pollutant, so one can hardly call their lifestyle cruelty free if it actively contributes to our collective plastic problem.

We also know that unsustainable agricultural practices, most notably palm oil production, are destroying entire ecosystems and displacing and endangering the futures of the species who live in them. In the last twenty years, orangutan habitat has decreased by 80% in Indonesia, where much of the world’s palm oil is grown. Other species, like elephants and tigers, are also at risk.

There are ethical vegans who might take issue with all the above by raising the point that while crop farming might be exploitative to workers and destructive to the environment, it is not an inherently cruel industry. With major overhauls and proper legislation, work can be done to find solutions to these problems. And, as ethical vegans will tell you, animal agriculture is , on the other hand, inherently cruel, because there is no humane way to take the life of another living being.

And that brings me to my next point.

Calling One's Lifestyle "Cruelty Free" Can Lead to Moral Licensing

The smug self-satisfied vegan is a well worn stereotype. I think the majority of vegans would fall outside of this stereotype, but it does have its merits. Beyond the stereotype, it’s easy to imagine that one might use their so-called cruelty free lifestyle to excuse, or license, other potentially negative or harmful behaviors and actions they might choose to engage in. “I haven’t eaten meat for like 20 years so it’s okay if I occasionally use products containing unsustainable palm oil.” or “I am making better choices for animals and the planet every single day, so it’s okay if I occasionally buy clothing made from unsustainable materials.”

Also related to this is the notion that one’s “cruelty free” lifestyle is morally superior to anyone who isn’t living “cruelty free.”

This ignores the fact that not everyone has access to healthy vegan foods, and may lack the resources to regularly buy them - especially in the United States where farm subsidies aren’t offered to specialty crops- which includes most fruits and vegetables. As a result, the prices of fresh fruits and vegetables are higher in comparison to other foods like dairy, processed meats, and corn-containing products.

Regardless of how we all identify or characterize ourselves, we should never become complacent and ignore any of the consequences our choices have on a much larger scale. Calling for the end of using “cruelty free” to describe veganism might sound nit-picky. But as someone who wants to promote the benefits of veganism for all its wonderful attributes, it’s important we acknowledge its shortcomings.

Only then can we truly begin to make progress toward a more compassionate and sustainable future for everyone.

Swords Into Plowshares: Rising Above The War Metaphor in Social Justice Work

social justice and war language complexity

Welcome to the Complexity series: posts intended to explore social justice and ethics issues with nuance, understanding, and ultimately hope. I will bring in several guest writers throughout the series, so stay tuned.


The US political climate in the Trump age is burdensome to say the least.

Fear yields anxiety yields rage yields exhaustion.

We are traumatized, the systemically and personally vulnerable among our population especially so.

We are confused, and the President and his allies continually sow more confusion.

We feel hopeless, because every small thing we


do feels meaningless in the face of a multitude of new human rights abuses and uncertainties.

Desperation and Prophetic Imagination

I wake up most mornings feeling a weight on my chest,

trying to navigate a world that's not necessarily worse than before but with "solutions" that feel decidedly less clear-cut.

I, and I suspect many of my fellow Americans, have short circuited to the point that we've lost our sense of what theologian Walter Brueggemann calls our "prophetic imagination," the ability to see hope beyond the hazy horizon.

A few weeks ago I sat down to watch a film that had been described to me as "the story of a pastor serving a church with declining attendance." That sounds quaint compared to the reality. Instead,

First Reformed

dealt with existential dread over climate change

, the mood becoming darker and darker as the story trudged on. The main character - yes, he was a pastor at a small church - desperately tried to cling to paradoxical hope in the face of certain disaster, but the realities of the world and his inability to find meaning led him to only two choices: commit violence against perceived enemies or commit violence against himself. The ending is surreal and confusing, but it got its point across.

I didn't know whether to weep or dig in my heels in determination and commit to find joy.

War Language and "Us-versus-Them"

But let me get back to that ending, because I think it tells us something about the way overburdened and scared people see the world. In the face of certain doom, everything is a hell scape. You either defeat or get defeated, kill or get killed. Shoot first or suffer the consequences.

Too much of the social justice rhetoric in this country is operating from a place of certain doom. But if you're dying anyway, if the whole world is about to blow up, what are you fighting for?

To contextualize this further, I am specifically speaking to a kind of purity culture or ideological fundamentalism that occurs in spaces where people don't know each other very well, particularly on social media, a decontextualized soap box that,

by design

, turns us into our worst selves. Like "the enemy" in traditional warfare, it's easy to flatten out people so that you don't have to feel guilty about metaphorically "beating" them.

In a recent Grist article entitled

War of Words

, climate journalist and (former?) Mennonite - a Pacifist Christian tradition - Kate Yoder asks the question, "Can we save the world from climate change without declaring war?" She draws on the work of linguist Deborah Tannen, who wrote a book on the subject 20 years ago. Here's the gist of her argument, taken from the article:

There’s a “pervasive warlike culture” in the U.S. that leads us to approach just about any major issue as if it were “a battle or game in which winning or losing is the main concern,” she wrote. It’s a deeply entrenched cultural tendency that has shaped politics, education, law, and the media.

Because much of language is metaphor - for instance, to say we must "defeat the enemy" in the context of debate is not a literal statement and operates in some ways as hyperbole - which metaphors we choose to use matters. Language, in a sense, can be


, but even that is a kind of war metaphor.

Contextualizing political, social, and moral debates within a linguistic system that heavily draws on war narratives not only reinforces a kind of violence, it also creates a false dichotomy, an "us-versus-them" format, that disguises complexity, and thus ultimately disguises and manipulates truth. 

Human Psychology

But this isn't just a problem on a philosophical level. It affects our ability to change people's minds. According to Yoder, psychologists call this an "intractable conflict," saying:

An us-versus-them narrative turns people away from logic and into the realm of emotion and values. As the conflict drags on without resolution, partisans become increasingly bewildered by the other side’s beliefs and actions.

So even if I believe in my heart of hearts that the best way to deal with someone I disagree with is a full-fledged public take-down, it is a psychological reality that I'm making the problem worse. But maybe I'm not concerned about the long game, content to sow havoc and reap discord?

Maybe some people see the take-down as a kind of necessary reckoning, but I question how often people


anticipate both the broad and deep repercussions of their debate strategies. Whether we like it or not, we - "the good guys" - are just as likely to fall prey to the emotional pull of the false dichotomy as our "enemy" (what's wild about writing this is that I cannot escape violent metaphor even as I object to it). It is more satisfying to categorize someone in one of two distinct camps - an us or a them - than to take the space to acknowledge our own biases before responding (I have to admit I have made missteps on this point, which I'm only now fully understanding).

Now We See in a Mirror Dimly

But how does war language propagate in social spaces and ideological camps? To my mind, in at least three ways:

  1. False narratives of scarcity: the largely unfounded myth that there is not enough intellectual and empathetic "space" to go around so we must take it from others

  2. Charismatic leaders: individuals who craft compelling and even empowering narratives that, nevertheless, aren't quite true

  3. Predominant ideological frameworks: those powerful, invisible idea-maps that often have more to do with power and profit than with collective flourishing

Having grown up in a religious culture that bordered on fundamentalism, I am extremely sensitive to the signs of ideological manipulation and believe very strongly that even compassionate and just ideas can rot on the vine if not fostered carefully.

Because of this, a healthy skepticism is always warranted. We must ask more questions!

It is easy to think that the world as we see it is

the whole world

, but this goes back to the problem of losing our prophetic imagination. There's a way to honor people's lived experience while resisting universal truth claims that don't properly amalgamate other, potentially disparate lived experiences.

The truth is often buried deep within the data. What we know is not everything. And we will never know enough. 

Keeping that in mind provides the kind of humility that allows us to hold our heads high at the same time that we unclench our fists, and this is precisely the orientation we need to work through complicated, seemingly insurmountable issues.

So, what do we do now?

Let me be clear, or as clear as I can be. People have a right to feel their feelings, and a right to speak them. People have a "right" to free speech, too. But it would be disingenuous to act as if what we're


justifies any and all actions. And beyond that, our implied or explicit roles as activists and educators requires more of us, if only because our stated goal is progress, and progress means we don't always get to while away in sackcloth and ashes. There is work to do.

And work requires crystal clarity, not getting distracted by scarcity models of self-defense, narratives that require an antagonist, infighting that sows confusion, and circular arguments that lead to an active minefield of intractable conflicts.

For those of us who have placed the mantle of educator-activist on our shoulders, our responsibility is broader and deeper than a battle cry. We are moderators, guardians, and colleagues to our students, and we have an obligation to keep the doors wide open.

Which means, above all, that we must put down our own weapons of violent language and false dichotomies. We must beat our swords into plowshares, making way for new growth, because as they say in the musical, Rent,

"the opposite of war isn't peace, it's creation."

We are cultivators of complexity, prophets of abundance.

After a month of stewing over an incident that occurred to me online (and admittedly, having to realize and begin to seek treatment for a mental health issue I had been trying to self-treat for the last year), I heard myself saying that I would get over it "if I had a chance to defend myself." I was in the middle of thinking over this piece, and I realized that

I was using war language,

 because building a defense is a product of "us-versus-them" thinking.

But I don't want to do work that forces me to adopt the predominant rhetorical strategy without a second thought. I don't think we make a better world using the same ineffective methods.

I don't know what that open field of abundance looks like and I'm not sure how to get there, but there's no question in my mind that we are creating enemies because we think we have to, that we are


ourselves in a model of doom and destruction because it didn't occur to us that there was another way.

As for me, I am leaning on paradoxical hope, hope in the face of whipping winds and children's cries and smoldering cities. A hope that resists the impulse to categorize and conclude, because it knows that


is not the end game.

I hold onto a vision of equity and thriving, not because I always believe it is possible or see the path clearly in front of me, but because I know that to abandon it is to abandon everything.

So, if we disagree and things get heated, this will be my response to you: "This is not a war and you are not my enemy. How do we fix this, together?"

Additional Reading 

Working Through Environmental Despair by Joanna Macy

 (I found this life-changing)

From the systems perspective, this patriarchal notion of power is both inaccurate and dysfunctional. That is because life processes are intrinsically self-organizing. Power, then, which is the ability to effect change, works from the bottom up more reliably and organically than from the top down. It is not power over, but power with; this is what systems scientists call "synergy." Life systems evolve flexibility and intelligence, not by closing off from the environment and erecting walls of defense, but by opening ever wider to the currents of matter-energy and information. It is in this interaction that life systems grow, integrating and differentiating...

We may well wonder why the old kind of power, as we see it enacted around us and indeed above us, seems so effective. Many who wield it seem to get what they want: money, fame, control over others' lives; but they achieve this at a substantial cost both to themselves and to the larger system. Domination requires strong defenses and, like a suit of armor, restricts our vision and movement. Reducing flexibility and responsiveness, it cuts us off from fuller and freer participation in life. Power over is dysfunctional to the larger system because it inhibits diversity and feedback; it obstructs systemic self-organization, fostering uniformity and entropy.

war language intractable conflicts social justice