SPEAKER_02 0:37

Hello, you're listening to the Philanthropisms Podcast. This is the podcast where we try to put philanthropy in context. I'm your host, as ever, Rod Davis. And this week we've got a conversation with Michael Thatcher. Now, Michael is the chief executive of Charity Navigator, the US Charity Nonprofit Rating Service. And Michael and I sat down a couple of weeks ago for a really interesting conversation all about how non-profit ratings work. So we talked about how Charity Navigators' own rating systems work, how that's evolved over time. We talked sort of more fundamentally about what the purpose of rating charities is, whether it's designed just to inform or whether there's some uh motive to try and shape the behaviour of donors and whether that actually works in practice. And we talked about how people actually use the information provided by Charity Navigator. We talked about the business model for providing charity ratings and kind of how you make that sustainable. We talked about the responsibilities of platforms, an increasingly interesting question about what gets put on platforms and what potentially gets left off and what the responsibility of the platform is in terms of curating that information. And then we also talked a bit about the future and how uh charity navigator might evolve in the future, what plans it had, and what the thinking they'd been doing about the potential to use emerging technology such as machine learning in order to change the way that they do charity ratings and whether it could kind of allow them to develop their services even further. So without further ado, let's go into the conversation. I'll be back at the end for the usual bit of housekeeping and tidying up. Okay, great. Well, I'm here with Michael Thatcher. Hi there, Michael.

SPEAKER_00 2:26

Hello. Great to be here.

SPEAKER_02 2:28

Yeah, great to have you on the podcast. Uh and Michael, um, as many of you might know, is the chief executive of Charity Navigator. Um, again, I'm sure lots of people listening will have heard of Charity Navigator. But maybe the best place to start is for you just to tell everyone in your own words what Charity Navigator is, what it does, and also how you came to be leading the organization.

SPEAKER_00 2:49

Sure. So uh Charity Navigators, we've been around for about 20 years. We're a website where we offer information, ratings, and tools for roughly 200,000 charities in the United States. We are focused on the US market and it's a free website, free to the donor, free to the charities. We evaluate charities on a zero to four star rating and do that to help people make impactful giving easier.

SPEAKER_02 3:19

And since you've come in, what sort of changes have you putting in place? I mean, did you are you just kind of keeping it business as usual, or are there things that have you, as you've come in, you've sort of thought needed tweaking and you've been trying to evolve the organization?

SPEAKER_00 3:31

I joined Charity Navigator almost eight years ago uh with a with a keen focus on moving our evaluations from just looking at where money goes to actually looking at what money does. And sort of to put that in slightly different terms, it's about getting to the impact that a nonprofit or a charity is creating in the world. And so a big we've we've actually been through a tremendous amount of change over the last eight years. And when I joined, we were rating about 8,000 organizations. Today we're rating almost 200,000. We were also only looking at information that came from the organization's website and their tax forms, uh, something we call the IRS Form 990 in the United States. The data now that we're using is actually we're looking at that same information, but we're also looking at the impact that the organization is creating through a cost for outcome analysis. We also look at leadership and adaptability and culture and community as measured by how do they listen to the constituents that they're serving, and what are some of their internal uh diversity, equity, and inclusion practices. So in NetNet, we have a much richer uh set of data points that we're creating our evaluations from. And we're also doing that across a much broader set of organizations.

SPEAKER_02 4:57

That's yeah, it's really interesting. And I'd love to pick up on some of that because obviously the question around how you rate things, well, particularly when it comes to impact, there's all sorts of questions swirling around, I think, in the wider world of philanthropy at the moment about that. Um, one thing I wanted to ask was in deciding on uh sort of those new expanded measures that tried to focus more on impact, what was the process of deciding which things were going to be measured? I mean, obviously there's some limitation in terms of just what you are able to measure, but also beyond that, was there a process of consultation with the organizations that you were going to be rating and measuring as well to see what they thought would be useful measures?

SPEAKER_00 5:36

I think that it's the uh the sort of the simplest answer to that is yes, yes, and um, because it's a combination of a variety of different things. One one of the biggest challenges uh as an evaluator at scale is consistency and quality of data. So, what can you get from a wide variety of really disparate organizations uh that allows you to somehow uh cast a judgment and help help uh a prospective donor or even help the individual leading the organization know that they're doing a good job in what they're doing. So part of that is data availability. And then I think the other part of your question was rooted on data applicability and what's important to one type of organization may be less important to another. So that's kind of the that's really that outlines a little bit the the challenge that we're facing. The way we approached it was thinking about, well, what do we what are we actually trying to do? Are we helping a donor discover if this is a a good organization? Is it a healthy organization? And part of health, when you think about um any any um entity, is one is you know, is it doing what it's saying it's supposed to be doing, but does it have the means to keep doing that? Well it will it make it through hard times and good times? And so that that has an effect on looking at certain uh certain financial measures are important and you know, for example, take something like um capital reserves. I think uh COVID-19 was a very good uh validation of capital reserves are a good thing, right? For many organizations, if they didn't have them, they may no longer be with us right now. Those that did were able to leverage those reserves, and then um they're still here and hopefully they've recovered and they're they're actually uh doing well at this point in time. Last point I'll make on this was we went into an extensive consultative process with the organizations that we evaluate, which is a big change from what we'd done in the past. One was we wanted to, we've we've we've set up, and this has now been in place, it's in its fourth year, I believe, uh, the consultative council of nonprofit leaders. So this is a council of a little over 30 leaders across a wide, really disparate set of organizations, both in terms of size, focus, geographic area of um, et cetera. And they we meet with them on a on a regular basis to share our thinking. We have um an expert group on nonprofit ratings, we have an expert group on diversity, equity, and inclusion, we have expert groups on product and strategy, and this is all about bringing in outside voices to help us to essentially walk the talk of what we say. In other words, if if it's important to listen to your constituents, Charity Navigator needs to listen to not just its donors, but the nonprofits that it is evaluating. So that was a mouthful. But um, we've we've really been trying to approach this from uh from a multitude of different ways. And honestly, it's gonna it's this is an endless process that we're gonna be we're engaged in.

SPEAKER_02 9:02

I was going to ask about that because obviously it's easy to sometimes think that this rating process is a one-off thing. And once you've done a rating, that's kind of it and it's set in stone. But obviously, that can't be the case because things evolve. How often do you do you kind of timetable to go back and and check in on the ratings you've already done? And also on on the process. I mean, how how often do you find that you're actually kind of changing the way in which you measure things or even expanding what you're measuring?

SPEAKER_00 9:31

So I should probably give a little bit of context because we've just come through a period of radical and rapid change. And I and maybe I should walk through the history of the last couple of years because the way we've evolved our ratings was first and foremost was not to leave the original star rating system intact. And then in parallel, we created what we called the encompass rating system, which was really a system designed around what we felt was going to be a good holistic view of nonprofits. So in 2020, we launched the encompass rating system in parallel to the original star system. So the star system was unchanged, was just looking at the tax forms and the organization's website. It was limited to large organizations, and then these the the encompass rating system, it's a four um four beacon system. We're using the we're staying in the nautical uh language motif. And so we have four beacons with which we evaluate charities under. One is um accountability and finance, which folks are used to from the from the former system, impact and results, which is looking at a cost per outcome analysis, uh, leadership and adaptability and culture and community. So as we were bringing the system online, we were looking for data sets. In some cases, we actually acquire data from other organizations. So we have a partnership with GuideStar by Candid uh for some of their data that has allowed us to rather quickly increase the quantity of our ratings. And in other cases, we we had to actually collect the data directly from the charities. So we were iterating on a quarterly basis, and then it went to three times a year, where we were actually adding new elements to the rating. That's a very fast-moving um uh rating system, and it's needless to say, tricky for organizations and donors to keep up with. Once we reached uh the two-year mark and we had all four of the beacons with some data populated in them and sort of like a V1 of that, we then worked on bringing the two rating systems together. So we had the old star system, we had the new encompass system. Those two systems were brought together in November of last year. So literally about six months ago, we unified these rating systems. Today, this is it's a long answer to your question. We're slowing things down a bit. And what we've decided is you know, changing changing what goes into the rating every every four months or every three months is is no longer needed at this point. But there will be annual iterations to the rating. And so that is, I think at this point, folks can count on we will be fixing things as we discover problems, but we will also be iterating on the on the actual ratings on an annual basis. We're trying to do this in a way that is the least disruptive to the nonprofits that are affected by the ratings. Uh, primarily don't want to be changing things as we go into what we like to call the giving season, which is the last month and a half of the year. So so we're slowing down, I guess is the the for the real takeaway for everyone.

SPEAKER_02 12:57

Yeah. No, I mean it makes a lot of sense. And and I guess just to unpick it, what what are actually the key audiences for the information that you're providing? Because I think again, it's easy to think of the archetype of the individual donor coming in and looking for information to guide their own decisions about where to give. And that's probably a big part of it. But are there also institutional funders using that information? And in what different ways are these different audiences making use of it?

SPEAKER_00 13:22

Sure. And I think, you know, the the primary audience and the audience that we are we have designed our systems for is what we're calling the everyday giver or the average American donor. We have roughly 12 million unique individuals coming to our website annually. They're they're giving modest amounts in the hundreds, not in the tens of thousands. Uh, it's probably worth noting we do we do facilitate the transaction through our website. So we have a giving basket that allows people to do portfolio giving of you know their selection of charities. And from those amounts, we can see that it's you know, this is not sort of the large institutional donors. That said, institutional donors have been using charity navigator for decades because we're free, and it's a nice snapshot of the marketplace, at least in the United States. And it's it's often we're, you know, when I speak to folks, we're sort of the first first triage, right? Where they kind of look through it's a nice, it's always been a nice rendering of the tax forms in a in a much more humanly readable uh format. The new quadrant system of beacons that we're using also gives you just some nice some nice data points to say, oh, all right, this organization does what I want, and um I want to dig into it a little bit deeper. So majority of the user base is uh individual donors, but then a a decent sized portion of um family foundations and then institutional donors.

SPEAKER_02 15:00

Interesting. And you you mentioned there that from the point of view of the individual donor, one of the you know the real uh kind of benefits is that it's it's free as a service. How do you make that sustainable? What's the funding model? Because I I know here in the UK there's been it's a relatively sort of vexed question for quite a lot of giving platforms that have struggled with the fact that people want the service they provide and the information they offer, but often are sort of unwilling to pay for what they see as core cost or administration. How have you managed to kind of square that circle?

SPEAKER_00 15:29

So it's it's um again differently over time. Um historically, when we were when we first started a little over 20 years ago, we were a private foundation. We were fully funded by our founder for the first 12 years of our existence. And then uh we grew and his wealth uh declined. And so there was a a decision made saying, wow, charity navigator's really become something significant, and we began doing our own fundraising and we converted to be a 501c3 nonprofit organization. Charity Navigator receives, I would say it's about 75% of our revenue comes from individual donations, with the average gift size being $50. So the way we've solved it is by adding value to people's lives in their giving process and then requesting that they support us. And so we are similar to Wikipedia that lives off of the generosity of the folks that are using it. That's how we've managed to really sort of create our core revenue streams, and then that is supplemented by uh a handful of institutional donors that see the value in what we're doing and are particularly interested in investing in sort of the evolution of the ratings. And so they have we've also received you know significant funding from the Bill and Mc Bill and Melinda Gates Foundation, Fidelity Charitable, the MacArthur Foundation, Google.org. And uh we were also fortunate to receive a gift from McKinsey Scott a couple of years ago.

SPEAKER_02 17:16

Interesting. I mean it's fascinating to hear you know how how all that kind of fits together and as you say, kind of just reinforces the value that it actually adds to the people using the platform. Um I just wanted to ask some a few questions about your role as a platform in the kind of wider giving space, because I think there's a lot of really interesting questions at the moment about the role of platforms when it comes to philanthropy and more widely in in society. Uh some of those are slightly more theoretical, and I want to come onto those in a moment, but I guess you know, one practical one we hear a lot about is just about how data is stored and used and and what you know, what if any challenges that brings. Do you find as an organization that is clearly dealing with huge amounts of data that you face particular challenges? And what would you say kind of the major ones that that you're aware of are?

SPEAKER_00 18:06

So I I often um refer to us in internally, I'm happy to say it here, as data scavengers. And um, because really the only way we can add value to the world is by having good data. And so we've got to find it wherever we can get it. And so what we're working with, and we are primarily focused on, is public information or information that organizations would willingly want to be known for, right? So there's we're we're less tangled up in some of the data privacy and security issues because we're not dealing with confidential information or you know, personally identifiable information. We really that's that's almost the antithesis of what we're trying to do. That said, we have all of the technical sort of difficulties of data sharing, and and just know that I spend a fair amount of my time engaged in what would almost be thought of you know in in other industries as standard setting practices. So I'm, for example, I'm a part of and I have uh two of my key leads uh participating in the Philanthropy Data Commons project that has sort of a nice conglomeration of uh players from the ecosystem from the large institutional funders, the actual change makers of the working charities, the platforms like ourselves and candid. And we're trying to agree on some data standards so we can actually more freely share the data because the flip side of your question is it's actually really hard for a working charity to keep up with the data demands that it's getting from the different foundations, the charity navigators, the candids, the everyone wants their data, and they're supposed to be doing some other kind of work, right? So there's there's there's a bit of um so how we reduce that friction to make it easier will ultimately, I think, lead to better outcomes for all of us.

SPEAKER_02 20:07

Yeah, and and I mean, I guess as the demands on data, as you say, become ever more pressing as people are seeking to use it as a basis for developing new technological solutions, which again is something I'd love to come on and ask you about in a moment. Um, I guess the the other side is the saying there of this these questions around the role of platforms that they get onto more sort of theoretical concerns, are ones about what what the role and responsibilities of those platforms are in terms of what information and particularly which organizations are able to appear on them. And it goes to the heart of this question of whether as a platform you're merely a neutral intermediary that just allows people to access information based on uh legal designations or tax designations, or whether you have a more active role in deciding that some organizations should be on the platform and some shouldn't. Have you found this to be something that you've had to face in your organization and kind of how how do you address those kinds of questions?

SPEAKER_00 21:04

It's I mean, that's a very, very rich question, and needless to say, um, quite pertinent to the the times that we live in. One of the what's been uh well, let's say today, and and I and I hope we can keep this this way, is charity navigator is not picking sides, and we are not using our platform as a vehicle uh with an agenda in one direction or another. So, to your point of sort of if it's if it's legal and if it's um legitimate in terms of you know, it has status with the IRS and it is in legally good standing, it's it's on our website. So we have a mirror, literally a direct mirror of what's called the uh business master file from the IRS. So there are a little over 1.6 million charities in our database. There is no uh special. Special treatment in one way or another, we issue ratings automatically on any or any 501c3 organization that has filed three IRS Form 990s in a row, and that's electronically filed. So, in other words, it's it's automatic. The rating happens as soon as you electronically file. The US government has mandated electronic filing as of last year. So that number will, you know, right now I say we have 200,000. That's going to grow. It probably won't go beyond about five or 600,000 because then you get into all the different categorizations of houses of worship and private foundations, and those we don't rate. So even though the full database is 1.6 million, I think the available rateable database is probably about 600,000 max. And that is we generate lists. And these lists are particularly we generate lists in times of disaster. We generate lists also around topical areas. And we have been, I would say we're we're influenced by the effective altruism movement and to a certain extent. And so in the lists, we may favor organizations that we feel have an intervention that is more effective than other interventions within known cause areas. So whether that's uh to do with um poverty, uh life preservation in you know, in in areas of extreme poverty, I'd say that there's um when we see something that works, we're gonna want to favor that, but it we do not change our rating, it would be more in terms of who makes it onto the list.

SPEAKER_02 23:56

Yeah, that's that's really interesting to hear um about you know all of those. And I guess there's a few things to unpick there. I mean, one is you mentioned that you even if you remain sort of neutral in terms of the question of what organizations are on the list, you're able to put emphasis in different ways depending on um assessments of effectiveness or specific cause areas if there is um either a kind of uh disaster or crisis or a thematic reason to do that. Um just picking up on the disaster and crisis giving, um, obviously that tends to be a time when you get a lot of reactive giving happening. Um, how do you see charity navigators' role in that? I mean, is it just providing an easy place where people can find information about how to give to organizations that are addressing a particular um uh problem uh immediately? Or do you think it's also about kind of playing a role in trying to ensure that um there's a minimization of fraud and charity scams? Because I know that's something else that tends to cause a lot of concern around times of crisis.

SPEAKER_00 25:00

It's a little bit of both. And in the sense that um, well, first of all, I think we've been putting together disaster lists since before I got to the organization. So it's probably about 10 years old, but it's just it, they're they're magnets. And when something terrible happens in the world, the what's beautiful is that people respond. And people often respond, and they that's when we come into our we really come into our strength because a lot of times, you know, take something like the earthquake in Syria and Turkey, or uh the conflict in Ukraine last year that's still ongoing. These were situations that people didn't, they wouldn't have fit into anyone's ordinary philanthropy. And so having a list of highly rated organizations that have actually have a the way we build our lists for a disaster list is that one, it's a highly rated organization, so a three or four-star charity. Two, uh, it has a dedicated fund. So the money is actually going, it can be allocated to the specific crisis in question. And three, they have feet on the street that are actually doing work in the cleanup. So it's not just a dedicated fund, but they're actually there, right? So that's a level of um uh assurance that we provide the donors that your money really is going to go to that um that situation. That does two things. One, it does get the money to where it's needed, and then two, it helps avoid fraud. There is a tremendous amount of fraud, and and ironically, I'm I'm often asked to speak with sort of mainstream media on on fraudulent issues. I wish it was more about good charities, but it's usually about you know how to protect yourself against fraud. And the there are two things we do on that. One, we we have the list which really help. The giving basket that actually for the transactions, the giving basket, the way it's actually configured, it won't let you give to a fake charity. It'll let you give to any legal charity, but it won't let you give to a fake one. And what we've noticed is that a lot of the fraud comes in as look-alikes or similar similar but slightly different name spellings, typical phishing and or you know, different email approaches to help you think you're giving to the right organization, but you're not. And so what we're trying to do is sort of say, hey, give to a legitimate organization and use an intermediary platform. We don't take, we don't make any money off of this, we just do it that's part of the service we provide. So we're really pushing that um to try and help people there. The last thing we do around fraud, um, and this is where more when either bad things happen or there's a perception that bad things have happened, is that we have an alert system uh within our database so that if um something were to happen, let's say there was an attorney general's investigation of an organization that we that's in our database, we'll let the donors know. That way they have a little bit of additional information that they can do additional homework. The only times we would block someone from giving to an organization is in the situation of um a nonprofit's gone out of business. They're still listed in the IRS business master file, they're still actively soliciting, but we know that they are no longer dead and gone, right? And at that point, we'll actually, you know, we'll we'll block the um we'll block the transaction because we know it's no longer in existence.

SPEAKER_02 28:38

Yeah, and and really interesting to hear about this whole question to do with sort of fraud and scams, because I guess it's tied into the broader issue around trust in in nonprofits, which I know is a big issue here in the UK and I'm sure you know is also in the US, and what impact that has on people's giving behavior? And and in a way, what you're doing by addressing it is obviously should be something that really kind of boosts trust. But you know, paradoxically, I guess the more that you make people aware that there are some of these issues, the danger is that they become more cynical. Do you find that a sort of challenge in terms of talking about these issues, in that you you want to reassure people and make them aware that you're doing work on it, but you you don't want to give the perception that all nonprofits, you know, are sort of questionable or shouldn't be trusted?

SPEAKER_00 29:24

It I mean, this is a this is a really tough one. And you know, yes, we're really trying to we're trying to share the story that, and again, our experience and our ratings actually indicate that the vast majority of nonprofits are doing good work, well-intentioned work. Some are more effective than others, but there's very little outright fraudulent work. And just some pure numbers. We have the 1.6 million charities in our database. We issue alerts on all, whether we rate them or not, but any any legally registered charity, so out of that 1.6, on average, there are about 450 alerts um that are live at one point in time. So 450 out of 1.6 million, that's those are the the odds are in your favor that you're giving to a decent organization. The other part of the challenge though, and this is um and this this is international, right? Um, the the distrust. This is not a, you know, it doesn't just manifest in the US, it you know, and I I know you're experiencing it in the UK. There's this misperception that, you know, I'm going down the I'm going towards overhead right now that you know, if if 80% of my dollar is going towards the program spend, somehow that's a good thing. And and I think this has created a huge um challenge for us. And and one of the things that charity navigator is working on, it's going to be a slow uphill climb for us, but it's really changing this nonprofit narrative because knowing that 80 cents on the dollar is going to your program does not tell you that the program is making a difference. It just tells you where the money went. It doesn't tell you what the money did. And getting to a place where we can actually articulate what the money did is not simple. And it's not as it's not as it's not a financial ratio, right? And so I think that's the we're gonna have um, this will be a lengthy um endeavor that I think many of us have to take on in figuring out how we help organizations establish their value without just talking about how much money gets spent here versus there.

SPEAKER_02 31:43

Yeah, absolutely. And I drew, you know, that overhead uh ratio um perception is I know something that lots of people have have found very problematic. And I guess it goes to your point that actually if what was missing is the ability to have a more meaningful measure of impact or what's being achieved, understandably people reach for the information that is available, and if that's just a simple ratio of of what's spent on overheads or administrative costs, then that's what people go with. And that's unhelpful, but people need to be both educated and given better measures. Um I just wanted to pick up also on what you were saying um before about the the fact that you're thinking in some areas would be influenced by effective altruism. Is that in the sense, you know, because effective altruism, I think, is is a relatively broad church these days, and and the kind of pure form of EA, which is all about taking a cause neutral approach and actually being able to measure the effectiveness of different cause areas rather than just different organizations, is is that something that you do? Do you actually kind of assess cause areas against each other? Or is it more that when you come to a particular cause area that you kind of acknowledge will have been chosen by the donor, then within that cause area, EA provides useful tools that you can use to rate organizations uh against each other?

SPEAKER_00 33:02

I think it's more the I think it's more the latter in this in the way you're describing it, and it's really sort of leveraging the tools that um that have been provided. Because the at the end of the day, I you know, I think in its purest form, that's not something that um that we're aligned with, but it's more within, and particularly when when you have good literature that shows you that certain interventions are more effective than others, I think that's there's a you know, it's kind of like pay attention, right? Yeah. It's like it's it's nice that you may want to do things a different way, but let's let's let's learn from the research, because at the end of the day, you know, there's so much, there's so much need in the world. And if we could be more effective in how we're addressing that need, maybe we actually take a dent into it, you know, make it reduce it. And so I think that's that's that's what's behind it for us.

SPEAKER_02 33:59

Yeah. Um and and another thing I really wanted to ask, actually, sort of looking ahead to the future in a way, is it feels at the moment as though there's increasingly a kind of focus on people giving in slightly non-traditional ways, whether that's giving to kind of new forms of online uh social movements or to kind of unregistered grassroots organizations, or even increasingly just to individuals via crowdfunding and payment platforms. Have you is that something you've started to think about in terms of your work, you know, either in terms of how you present the value of what you do in that wider context, or even that you might think in the future about whether to expand your ratings to include some of these other potential avenues for people to give?

SPEAKER_00 34:43

It's it's tricky for us right now. I would say that there are two things that we're doing sort of that I that are, let's say, measurable differences. One is that we've added we've added to the concept giving, it's giving, it's more we're trying to move to uh what I would call turning intent into action. And action doesn't necessarily mean writing a check or giving your credit card. And we have a partnership with Golden Volunteer, which enables people to sort of search on Charity Navigator, find what they're looking for, and then find a volunteering opportunity where they could actually engage directly in doing something around the causes that they care about. We also have a partnership with Grapevine, which is looking at giving circles and sort of trying to create community around giving. So we're looking at that's sort of um a little bit stretching our boundaries, but in terms of giving to our our giving basket today is fairly rigidly set up to only give to 501c3 organizations. So that one's tricky for us in its current iteration. Where I see us going beyond the boundaries of um what I would call US limitations is is a really strong curiosity and desire to bring some of what we do internationally. And whether that would mean Charity Navigator itself or it would mean somebody overseas coming to us and saying, Hey, I want to can can we work together to create something like Charity Navigator in our country, that's actually a that's a conversation I have several times a year and with folks in different parts of the world. The reality is we are we already have more to handle than we can within the United States. And so it's it's would love to do it, but just don't have the energy. So if someone came with a lot of energy and the resources to do it, then it might happen. But um because we're also a charity and we are limited in our in our capabilities and resources, uh, we're gonna be slow on this one just because we're we're not funded for it.

SPEAKER_02 36:56

And I think that's perfectly reasonable, as you say. You've got plenty on your plate already. Um and again, just thinking sort of uh about the future in a different sense, it obviously is a lot going on at the moment in terms of a whole load of new and kind of emergent technology um starting to have a real impact on people's lives. Have you at Charity Navigator kind of thought about or experimented with using things like machine learning and and kind of how they might be relevant to your you in the future and how they might kind of expand your capabilities or or make you know what you already do more efficient?

SPEAKER_00 37:32

So I think the there's we've dabbled at this. I also think there's there's an area where machine learning, there are a couple of areas. One is we get a lot of data, we're not always able to validate all of that data. So automation, machine learning can actually help you find anomalies in your data sets, could trigger fraudulent behavior or errors in the errors in the in the data submissions. And so we've we've done some experimenting around that. There's also looking at how you help an organization. So we're rating 200,000 organizations. It's probably worth noting that charity navigator consists of 35 human beings, right? We're we're a small organization, which means we're not able to do a tremendous amount of hand holding. With 200,000 charities and 12 million donors, we have to find ways to help people understand things and learn from, you know, let's say we we publish something on our website that people don't understand, we'll then be overwhelmed with uh, you know, an inundation of questions or or comments or complaints. And so being able to to automate some of that response cycle is in in really in the areas of customer success. I I see a lot of work going there.

SPEAKER_02 38:50

Yeah, absolutely. And I think I mean it sounds really interesting because I guess in a way, there are some, on the face of it, less glamorous applications of machine learning that actually could be hugely impactful in the nonprofit sphere. And actually, I I often feel a lot of the focus so far is on, you know, um conversational assistance and things that people can can kind of more easily get their heads around. But actually, what might make more difference in the short term is some of the things that happen at a back office or infrastructure level. Um the just finally, um, before I let you go, Michael, I just wanted to ask you um for your perception of how a kind of wider debate that it seems to be happening at the moment about um measurement and and impact in the nonprofit sphere is is kind of informing your work. Because it feels as though for a long time over the last 20 years, the direction of travel has been people saying, well, we, you know, the more we get more good measures on impact, the better things will be and the more informed people's giving will be. And in the last few years, there seems to have been a bit of pushback from people saying, actually, maybe there's too much focus on measurement and actually it's become too rigid, and it can be difficult if it if it kind of entrenches power dynamics between donors or funders and and grantees, and some people even sort of saying that we should do away with measurement altogether. Um, I'm guessing that's very much not your point of view, but what is your perception of kind of those debates and and where charity navigator sits in within them?

SPEAKER_00 40:13

Yeah, it's a it's a rich question. And I I was um had a wonderful discussion with uh a friend uh who's at uh Stanford uh a couple of weeks ago, who was very much saying, I think we're I think we're leading people down the wrong path by getting them too worked up about impact because they're actually giving less now. And so I think that's the issue, which is uh it goes back to this whole idea of changing the uh the nonprofit narrative. Overhead's really easy, and people can sort of say, Oh, okay, 80%, boom, I'll write a check. Getting into counterfactuals and um all these other intricacies of real impact measurement and longitudinal studies, and people fall asleep before you even finish saying the words, right? And so there's an art between well, at Charity Navigator, we're again we're we're dealing with the average American donor. We have a zero to four-star rating system, which is intended to let you know you can give with confidence when you've got you know three or four stars, you know this is a good charity. There's two percent of our population that dig under the covers and really tear it apart and want to know all that information. I can't tell you today, and I should I should actually be able to answer this. I wish I could and I can't. Is that 2% giving more or is it giving less? Right? The ones that really dig under the covers and get into the details of the ratings and want to understand understand the intricacies of our impact assessment and all of that. I don't know that they're actually more generous. I know that they're very rigorous. And so I think part of the art is having the rigor, but then also having something that's accessible that gives someone a clear signal it's okay to give here. And so that's really what we're striving for with the we've kept the star system. We had a huge debate internally over the last couple of years. Do we go to a numeric score? The original encompass system was, you know, between zero and a hundred, and very quickly realized that, you know, what's the difference between a 97 and a 95? Is it meaningful? And so we we're we realized you had to keep it, you had to keep it simpler, but you had to have the um, you had to let people dig in if they wanted to, but then make it accessible. And so the the philosophy around the ratings design was this idea of nibble, bite, and full meal, right? So most people are going to be happy with the nibble. Some people want to really bite into it a little bit more, and then every now and then you'll have someone who wants the full meal that really is going to take apart every element of the rating and try and understand it. I I like that very, very much.

SPEAKER_02 43:00

I think that's a really good way of characterizing it. Listen, Michael, um, I'll I'll let you go at this point. Just remains to say thanks ever so much for finding the time to come on the podcast. Um, I'll put links in the show notes to to places where people can obviously find Charity Navigator. Are there any things that you've got it coming up or any kind of final thoughts that you want to leave people with?

SPEAKER_00 43:17

You know, at the end of the day, the evaluations are important, but giving is something we do with our hearts. And so for me, it's it's um the way I like to think of it is sort of, you know, follow your heart, use your head, and then make a difference. And so it's a combination of a little bit of you know, the emotion that drives you to give, don't lose that, but then use your head and find an organization that's really helping you do what you're trying to get done.

SPEAKER_02 43:42

Very sage advice, I think.

SPEAKER_00 43:44

Thanks very much, Michael. Thank you. Take care.

SPEAKER_02 43:56

Okay, great. Well, my thanks again to Michael for finding the time to come on the podcast. Really interesting to hear about the work they're doing there at Charity Navigator. Um, I put links in the show notes to places where you can find more information on Charity Navigator and on some of the things that Michael and I were talking about. If you're interested more broadly in issues around philanthropy and civil society, as ever, do check out the website at whyphilanthropymatters.com where there's all sorts of uh articles, episodes of this podcast, bits of news, things I've said and written about philanthropy and civil society. Uh you can follow me on Twitter at Rodery underscore h underscore Davis or at philiteracy if you like stuff that's a bit more about history and sort of theory of philanthropy. You can find me in other places on LinkedIn and Mastodon as well. Um, if you've got ideas for people that we could talk to on the podcast or topics that we could cover in depth, drop me a line at Rodri at whyphilanthropymatters.com. Other than that, just like, subscribe, leave us a nice review on iTunes or wherever else you get your podcasts. Do tell other people that you think might be interested so that they can check it out too, and I'll see you next time.

SPEAKER_01 45:00

Bye.