We often start our workshops and training sessions with examples of Charity Navigator’s nonprofit ratings data. We compare an organization with a four star rating to one with a one star rating and based on the data and ask the group to select the organization that should receive a $10,000 grant.

Needless to say, in the absence of better information, the majority of the group selects the organization with the four star rating. We then present notional data on each organization’s cash reserves and endowment along with specific, quantifiable information about the results that the organization generates and ask the group to reconsider which organization should receive funding. The organization with the four star rating ends up with unremarkable results and questionable financial standing and the organization with the one star rating demonstrates impressive results and a strong financial picture.

Not surprisingly, the group’s answers change.

While there has always been value in understanding the way that organizations organize their resources, it is really a small piece of the puzzle. It is great to see that as funders and organizations have become more focused on measurable results, so has one of the field’s most public “evaluators”. As Charity Navigator expands its focus to include accountability, governance and outcomes, there is a very public opportunity to help focus individual donors and institutional funders on what matters most, results.