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 ratings, we align our rating scales to the industry standards we see from reviewing charities.
Summary
These Overall Ratings are made up of several metrics which obtain individual ratings, based on the following criteria:
| Rating | Qualitative | Description |
|---|---|---|
| ★★★★★ | Excellent | Exceeds sector standards and outperforms most charities for this metric. |
| ★★★★ | Good | Meets sector standards and performs better than most charities for this metric. |
| ★★★ | Average | Nearly meets sector standards and performs as well as most charities for this metric. |
| ★★ | Needs Improvement | Fails to meet sector standards and performs below most charities for this metric. |
| ★ | 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 outlines how we measure the individual metrics for the Financial Health category:
Financial Health Metrics:
- Late in Submitting Accounts - Average number of days over last 5 years
- Working Capital - Working Capital / Latest Year's Total Expenses
- Expense Growth - Change in Total Expenditure over 3 years
- Total Net Expenditure / Total Income - Administrative Expenditure for Latest 3 Years / Total Income
Accountability & Transparency Metrics:
- Board composition and independence
- Audit committee effectiveness
- Conflict of interest policy
- CEO/Chair evaluation
- Board meeting frequency
Accessibility Metrics:
- Website quality and information availability
- Contact information accessibility
- Annual report availability
- Financial statements accessibility