Note for Website re: Charity Navigator, Charity Watch, etc.

The Board of Directors of World Villages for Children and its management are very conscious of the need to use the funds we receive from donors in the most effective way possible; we understand that when donors send their hard-earned money to World Villages for Children in response to appeal letters and other fundraising efforts, they have every right to expect that their funds will be spent wisely.

Accordingly, the Board believes it is essential that all possible steps are taken to maximize the amount of funds that are spent on “Program Costs”, that is, those costs that benefit the charitable purposes of World Villages for Children.  In order to achieve this end, administration costs and fundraising costs must be kept to an absolute minimum.

The Board is aware that many donors, in an effort to ensure their donations are being used prudently and efficiently, are turning for help to a variety of websites including Charity Navigator and Charity Watch, among others.  We strongly believe the increasing use of these websites is a healthy and positive development since it provides donors with much useful information and provides additional accountability and transparency for the charity sector.

However, we also believe these websites need to be used with considerable care since they generally provide a seemingly simple evaluation, for example in the form of either a familiar letter grade (A through F) in the case of Charity Watch, or a certain number of stars in the case of Charity Navigator. Because of this appealing presentation, we believe there is a natural tendency for donors or potential donors to simply compare these final scores when deciding where to direct their donations, without looking more deeply into the workings of the charity and how the funds are eventually used.

For all of these charity evaluation websites, the financial evaluation is of paramount importance and occupies “center stage” in the charity’s evaluation. The financial information used in these evaluations is taken from the Form 990 tax return that the charity submits to the Internal Revenue Service each year.  While this financial information is certainly important, a major shortcoming of this financial approach is that it focuses solely on the internal workings of the charity and there is no attempt to measure the beneficial impact the charity has on the community it serves.  The financial approach taken by these websites is sometimes referred to as measuring the value of the “inputs” (the amount of money spent on the charitable purposes, administration and fundraising), while totally ignoring the value of the “outputs” - the actual benefit that accrues to the community as a result of the charity’s charitable spending.

We at World Villages for Children believe this “financial” approach to charity evaluation does not allow donors to fully appreciate the outstanding work our funding supports; the funds we provide to the Sisters of Mary are used to feed, clothe and provide an outstanding high school education to very poor children in the developing world. We believe education is the most efficient way to bring about the eradication of poverty; and this is not just our belief - numerous independent studies have supported the view that providing education to the poor is the most effective way to lift them and their families from poverty on a permanent basis.

Our purpose here is not to suggest there are not many worthy charities tackling a wide variety of very important societal problems. However, we at World Villages for Children would like our donors to know that by donating funds to us, they are supporting the work of the Sisters of Mary which is particularly effective at reducing poverty. Indeed, donors who are lucky enough to visit any of the schools run by the Sisters of Mary return home enthusiastic, energized and transformed by what they have witnessed. For many donors, these visits are a life-changing experience.

World Villages for Children is determined to improve the financial ratings it currently receives from Charity Navigator, Charity Watch and other sites; we would like donors to know we are fully focused on improving the various financial ratios that go into determining our financial rating. However, we ask our donors to be patient since this is an effort that will take several years to accomplish. The reason for this is that, for example, in the case of Charity Navigator, five of the seven financial measures for any particular year are based on average data for the last three years. As a result, even if there is a significant improvement in the current year, the financial rating would still be dragged down by less favorable results in the previous two years.

Notwithstanding these difficulties, we understand the importance of improving our financial rating and are fully committed to this task. We feel we owe this to each and every one of our donors, the Sisters of Mary and the wonderful children in their care. We will not rest until this important objective is achieved.