How do we rate charities?

We believe our ratings dramatically improve the quantity and quality of information available to donors.

Our ratings provide clear, objective, and reliable assessments of financial health, accountability and transparency and accessibility of charities. By utilising Charity Clarity, donors can learn how a charity compares on these metrics with other charities throughout the sector.

As we continuously improve our charity ratings, we align our rating scales to the industry standards we see from reviewing charities. This table shows how we display our Overall Ratings.

Charity Overall ratings

These Overall Ratings of Charities are made up of several metrics which obtain individual ratings, based on the following criteria.

Numerical Rating Qualitative Rating Description
Five star Excellent Exceeds sector standards and outperforms most charities for this metric.
4 star Good Meets sector standards and performs better than most charities for this metric.
Three star Average Nearly meets sector standards and performs as well as most charities for this metric.
2 star Needs Improvement Fails to meet sector standards and performs below most charities for this metric.
One Star Poor Performs far below sector standards and below nearly all charities for this metric.

Our rating methodology is very much inspired by this TED talk by Dan Pallotta.

Detailed ratings for metrics

The following table outlines how we measure the individual metrics for the Financial Health category.

Category Metric Description  Rating-0            1             2     3 4                  5
Financial Health Late in Submitting Accounts Average number of days over last 5 years* More than 73 days More than 50 and less than or equal to 73 days More than 25 and less than or equal to 50 days More than 5 and less than or equal to 25 days More than 0 and less than or equal to 5 days 0 days
Financial Health  Working Capital For General including Religious ActivitiesFor Schools and High Trading Income Organisations

For Makes Grants to Individuals and Organisations

Working Capital  / Latest Year’s Total Expenses

Less than minus 1—

Less than 0.5

Less than 1

More than or equal to minus 1 but less than 0.2—

More than or equal to 0.5 but less than 1

More than or equal to 1 but less than 2

 

More than or equal to 0.2 but less than 1—

More than or equal to 1 but less than 2

More than or equal to 2 but less than 3

 More than or equal to 1 but less than 2—

More than or equal to 2 but less than 3

More than or equal to 3 but less than 5

More than or equal to 2 but less than 5—

More than or equal to 3 but less than 6

More than or equal to 5 but less than 8

More than or equal to 5—

More than or equal to 6

More than or equal to 8

Financial Health  Expense Growth (Total Expenditure for latest year – Total Expenditure for 3rd Latest Year)/Total Expenditure for 3rd Latest Year** More than 100% More than 50% and less than or equal to 100% More than 25% and less than or equal to 50%  More than 0% and less than or equal to 25% More than minus 30% and less than or equal to 0% Less than or equal to minus 30%
Financial Health Total Net Expenditure / Total Income For Makes Grants to Individuals and Organisations
(Total Expenditure – Grants Made) for Latest 3 Years / Total Income for Latest 3 Years—For all others Administrative Expenditure for Latest 3 Years / Total Income for Latest 3 Years
More than 90% More than 75% and less than or equal to 90% More than 50% and less than or equal to 75%  More than 1/3 (i.e. one-third) and less than or equal to 50% More than 20% and less than or equal to 1/3 (i.e. one third) Less than or equal to 20%
Financial Health  Employees over 3 year average income Number of Employees/3 Year Average Income * 1,000,000 More than 10 More than 5 but less than or equal to 10 More than 2 but less than or equal to 5  More than 1 but less than or equal to 2 More than 0.5 but less than or equal to 1 Less than or equal to 0.5

*Current year figure taken at time of calculation. ** Adjusted according to years’ data available.

The following table outlines how we measure the individual metrics for the Accountability and Transparency category.

Category Metric Description Rating – 0 1 2 3 4 5
Accountability and Transparency Clarity over Trusteeship Process Interpretation of information taken from published documents Unavailable in documentation. Process, length and associated details unclear from documentation. Process, length and associated details somewhat unclear from documentation. Process, length and associated details maintain a basic level of clarity. Process, length and associated details largely clear from documentation. Process, length and associated details clear from documentation.
Accountability and Transparency Number of Trustees Number of Trustees** More than 15 trustees
OR
1-2 trustees
12-15 trustees 10-11 trustees 8-9 trustees 6-7 trustees 3-5 trustees
Accountability and Transparency Female Representation (Number of Women as Trustees or in Senior Management)/(Number of Trustees + Senior Management) 0% More than 0% but less than or equal to 10% More than 10% but less than or equal to 20% More than 20% but less than or equal to 30% More than 30% but less than or equal to 45% More than 45%
Accountability and Transparency
Number of Additional Boards the Trustees Serve On (Total Additional Boards Served on by all Trustees)/Number of Trustees Zero
OR
More than 1
More than 0 but less than or equal to 0.1
OR
More than 0.9 but less than or equal 1
More than 0.1 but less than or equal to 0.2
OR
0.8 but less than or equal to 0.9
More than 0.2 but less than or equal to 0.3
OR
0.7 but less than or equal to 0.8
More than 0.3 but less than or equal to 0.4
OR
0.6 but less than or equal to 0.7
More than 0.4 and less than 0.6
Accountability and Transparency Social Impact Reporting Extent to which social impact is measured and reported No social impact measurement or reporting Very little social impact measurement and reporting Some social impact measurement and reporting Social impact measurement and reporting available but incomplete Social impact measurement and reporting largely available Excellent and comprehensive social impact measurement and reporting
Accountability and Transparency Public Relations Assessment of public relations and communications Multiple issues which significantly negatively impact upon public perception Some issues which negatively impact upon public perception Afew small issues which negatively impact upon public perception No issues either positive or negative Largely positive stories which positively impact upon public perception Systematic and regular evidence of significant positive public perception
Accountability and Transparency Revenue from Trading Activities Trading Revenue/Income 0% More than 0% but less than or equal to 2% More than 2% but less than or equal to 5% More than 5% but less than or equal to 20% More than 20% but less than or equal to 60% More than 60%

**Director, instead of Trustee, where relevant. ***Unless charity objectives require all-female team.

The following table outlines how we measure the individual metrics for the Accessibility category.

Category Metric Description Rating – 0 1      2 3 4 5
Accessibility Contact Details Available Assessment of how easily relevant phone, email, other contact details are available publicly No relevant information available Very little relevant information available Some relevant information available Information available but partly incomplete Information is largely available Well maintained, high quality and easily accessible information available
Accessibility  Clear and Accessible Information Assessment of how easily available information is publicly No information easily available Very little information easily available Some information easily available Information easily available but partly incomplete Information is largely available Well maintained, high quality and easily accessible information available
Accessibility Recently Updated Assessment of how recent the publicly available information is No recent information available Very little recent information available Largely irrelevant recent information available Recent information available but partly incomplete Recent information largely available Well maintained, high quality and easily accessible information available
Accessibility Sentiment Analysis Sentiment Analysis uses natural language processing, text analysis and computational linguistics to identify and extract subjective information from the internet. Currently, we track positive, negative and neutral Facebook and Twitter presence and standardise it on a continuous rating scale of 0-5.
Accessibility Google PageRank Google PageRank number on a scale of 1-10 0 1 2 3 4 5 or above
Accessibility Vision and Strategy Assessment of availability and efficacy of news and press information publicly No relevant information available Very little information available Largely irrelevant information available Relevant information available but partly incomplete Relevant information largely available Well maintained, high quality and easily accessible information available

 

Charity Clarity membership packages

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These packages bundle together our services to cater for charities and social enterprises of all sizes. Charity Clarity works with charities and social enterprises to help them build a roadmap to success and achieve their social goals.

To find out more, contact:

Cormac at +44 (0) 20 7993 6851 or ujani@economipolicygroup.com

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