I am a career nonprofit executive and there are a few things to consider that are more important than faulty external ratings services' opinions. You might treat giving decisions like buying an investment: No one cares about your money as much as you do, so you will do best if you do your own thinking and not rely on an advisor.
The most important thing is how well an organization aligns with your very top values. What do you want your legacy on this earth to be - in charitable form? Once you decide what is most important, whether educating the next generation, protecting the environment, medical research or any other field, get to know the leaders in the field. Next, decide if you want your impact to be local or larger scale. Make gifts to a few and see how you like the experience. Finally, after your research phase, contact the major gift or planned giving department of your favorite charity and talk to an expert about what they offer. Ultimately, they can only legally make suggestions that you and your attorney or CPA will need to implement into your plan.
Some of the serious problems with the ratings agencies include the fact they are really businesses. They rate hundreds and hundreds of charities and, therefore, their knowledge is quite superficial. They then turn around and charge the nonprofits a fee to publicize those ratings with their logo! That's their business model and I'll leave it to you whether that presents a conflict of interest. A very serious problem they have specifically created is a public perception that nonprofits should separate "operating expenses" from "program delivery expenses" and that the lower the former are, the better and more "efficient" the charity is. They have created the perception among donors that a 10-15% ceiling for operating expenses is efficient and anything above that is wasteful. Wrong. Such a broad brush standard for a massively complex and diverse field of nonprofit organizations might have superficial appeal but it ignores the real fact that a social service organization, such as a church budget, is going to be almost all operating expenses while one that builds homes or buys land is going to have mostly capital expenses.
Nonprofits have contorted themselves to fit a mythical efficiency standard created by these ratings agencies, which has damaged everyone because, big surprise, it takes money to operate an organization. Program delivery can't be done out of thin air with no staff. Lately, after excoriation, those same agencies are forming a public information campaign to try to walk back the damage they have created, which is widely known as the "Nonprofit Starvation Cycle, while trying to remain in business. But many donors and practitioners are realizing that Charity Navigator, Guidestar and their ilk have discredited themselves through their damaging and simplistic ratings industry, much like Moodys and S&P are no longer very trusted at rating private businesses.
You need to do your homework if you want to have a satisfying donor experience. Thank you for giving and good luck!
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