The Battle for the Soul of the Nonprofit Sector

Abstract

Although many in the nonprofit sector have been unaware of it, skirmishes in the battle for the soul of the nonprofit sector have been taking place over the last few decades. While most of us kept our heads down, doing what we think is “good work” and donating, volunteering, organizing or advocating, the sector’s “thought leaders” have been thrashing it out over the two most important questions ever to face the sector: how to define the value of all the work we are doing, and how to measure that value.

Had the economic realities of both our sector and the nation’s larger economy not changed, it is probable that this battle would continue to have raged all but unnoticed.  However, as money has gotten tighter and public skepticism has increased, the battle has not only begun to heat up, but has commanded an entirely new profile and prominence that no one in the sector can either dismiss or ignore.  An important flashpoint in this clash of ideologies, approaches and value systems has been Charity Navigator’s announcement that it would begin rating charities’ effectiveness as well as their fiscal soundness and accountability.

Recently termed the “most visible” of the nation’s charity rating services (Cohen 2010), with more individual donors using our site than any other in the world, Charity Navigator (CN) has been at the forefront of making judgments regarding the performance of charities.  However, critics have correctly observed that CN’s fiscal rating system is one-dimensional and does not tell the whole story of a charity’s value, and therefore can cast in a negative light some nonprofits that are, in fact, doing effective work.