4 self-regulations and ratings for your organisation

Ratings and self-regulation guidelines are meant to help nonprofits become better organisations. This article gives you some examples and presents criteria to select the right certificate for your own organisation.

Self-regulations and ratings for your organisation

One of the major drivers of normative isomorphism among nonprofits are ratings such as Guidestar or Charity Navigator.

They provide donors and other relevant stakeholder groups with helpful information to decide on which organization they want to support.

Additionally, regulations and guidelines of self-regulation such as governance codes have emerged throughout the past two decades. Both methods, ratings and self-regulation guidelines, aim to develop and professionalise the sector.

Positive aspects of self-regulation

AbouAssi and Bies (2017) name several positive aspects associated with self-regulation:

• Strengthen legitimacy of nonprofits through transparency and accountability
• A mechanism for learning across the NPO sector and within individual nonprofits
• A means to prevent strong government action and restriction
• A supplement to government concerns
• Strengthen the moral commitment of a NPO.

In the following, you will find examples of ratings and self-regulation guidelines. Some of them are very prominent, others are less known in public, but of high relevance to nonprofits.

1. Charity Navigator

On their website Charity Navigator describes their organisation like this:

Founded in 2001, Charity Navigator has become the nation’s largest and most-utilized evaluator of charities. In our quest to help donors, our team of professional analysts has examined tens of thousands of nonprofit financial documents. We’ve used this knowledge to develop an unbiased, objective, numbers-based rating system to assess over 9,000 of America’s best-known and some lesser known, but worthy, charities.

2. Guidestar

3. GiveWell

GiveWell is a nonprofit dedicated to finding outstanding giving opportunities through in-depth analysis. Thousands of hours of research have gone into finding our top-rated charities. They’re evidence-backed, thoroughly vetted, and underfunded.

The aim of GiveWell is to go beyond financial statements in their evaluations of nonprofits and provide evidence-based results.

They follow a utilitarian approach and look for organisations that help as many people as possible with a given amount of resources. Thus, it is not surprising that all of their ‘top charities’ work in the field of malaria prevention or deworming.

4. Swiss Foundation Code

The Swiss Foundation Code is representative of many governance codes developed specifically for nonprofits. These codes offer recommendations on transparency, checks and balances, and efficiency of nonprofits, especially for management and board.

Contrary to the aforementioned rating systems, a governance code is a tool of self-regulation with no public rating.

Thus, the aim is not to surpass a given level of acceptance or to compare your organization with others, but to apply the recommendations in the best way in your organisation in order to better fulfil its mission.

Checklist: Criteria for selecting the right certificate

Before applying and adopting guidelines or certificates, one should check the following questions:

• What is the principal aim of the guidelines or the rating?
  This can be donor orientation, governmental acceptance, or simply public transparency.
• Which quality criteria have to be met?
  Do these criteria cover your own expectations and values?
• How high are the financial and temporal expenses for your organisation?
  You should check for costs of accreditation, costs of renewal, etc.
• Is there a governmental minimal expectation of self-regulation?
  In some countries, governmental institutions expect specific certifications or acceptance of guidelines in order to collaborate or fund a nonprofit organisation.
• Which constituents do you want to address?
  Internal constituents expect other forms of self-regulation than donors or clients.

References

Khaldoun AbouAssi & Angela Bies (2017): Relationships and Resources: the Isomorphism of Nonprofit Organizations’ (NPO) Self-regulation, In Public Management Review, DOI: 10.1080/14719037.2017.1400583.