As Chair of Galapagos Conservancy’s Board of Directors, I would like to share some background information regarding our Charity Navigator ratings since 2009. We feel strongly that these ratings unfairly and inaccurately reflect the organization’s efficiency and effectiveness.
In 2009 we were surprised to learn of a sharp drop in our rating following what we considered to be a strong year and consistently high scores in previous years. In 2010, we were equally surprised that our rating did not increase to at least three stars, despite the fact that overall revenue growth increased by 7.4% (grants and donations received actually increased by 11%) and our programs grew by 7.2%.
What caused the decrease in 2009? Charity Navigator automatically calculates ratings based on information contained in Form 990’s filed with the IRS (and available on our website). To earn and maintain high scores, organizations must consistently demonstrate annual increases in revenue (which is challenging in the recent economic environment) as well as annual increases in program expenses. In 2009 our score was negatively affected by:
--The planned phase out of a program through which Galapagos Conservancy previously administered funds raised aboard several Galapagos tour ships. This change in our operations, resulted in a drop of about $500,000 in our annual revenues and program expenses, compared to earlier years. It is important to note that contributions made directly to GC actually increased between 2008 and 2009.
--An extraordinary program expense in 2008. During that year Galapagos Conservancy disbursed $730,000 raised over a number of years for the Galapagos Invasive Species Fund (a component of the Project Isabela Island Restoration Program). This one-time disbursement inflated our program expenses in 2008, making our 2009 program expenses appear to shrink significantly. In reality, our 2009 program expenses were consistent with pre-2008 levels.
Why did the score not increase to at least three stars in 2010? From 2009 to 2010 we experienced significant growth in both fundraising and programs (the two key figures for Charity Navigator calculations). Using year-to-year growth figures in the Charity Navigator formula (7.4% growth in overall revenue and 7.2% growth in program expense) Galapagos Conservancy would receive a three star financial rating in 2010. However, Charity Navigator uses figures averaged over the past three to five years. So the one-year, planned phase-out of a program will continue to have a strong negative effect on our rating for several years, despite our continued strong performance.
What is GC doing to change the rating? We have been dissatisfied with Charity Navigator’s response to our inquiries. Charity Navigator provides no means for appealing ratings or to explain extenuating circumstances. Our score will be affected for several years. We will continue to work to grow both our revenues and programs, but these efforts will not be immediately reflected in our score.
How else can a donor judge Galapagos Conservancy’s effectiveness? It is important for you to know that we work hard to be excellent stewards of donor funds. For example:
• Galapagos Conservancy is accredited by the BBB Wise Giving Alliance
• We have always invested at least 75% of what we raise on program activities
• Our fundraising efficiency is excellent for an organization of our size
• We are audited annually and our audits have always been unqualified
• Until the recent economic downturn we have been able to generate increased revenue each year
Our Form 990s and most recent audit are available at www.galapagos.org. Our staff would be happy to respond to any additional questions you have.
With my thanks and best wishes,
Richard Wood
Chair, Galapagos Conservancy
Review from CharityNavigator
I think its a bit unfair that GC has such a low rating with Charity Navigator. They are the only organization that I know of doing very critical work to preserve the incredible ecosystem that exists in the Galapagos. I think their review is solely based on their expenses vs. program spending, which may be unfair based on their accounting practices vs. other organization or due the the smaller size of their organization.
Review from CharityNavigator