After the Corps - Alumni - One Day: Teach For America Alumni Magazine

Helping Do-Gooders Do Better At an April 2001 New York Historical Society fundraiser, John P. Dugan, a New York businessman and philanthropist, struck up a conversation with Trent Stamp (E. North Carolina ’93). Dugan was still fuming over the newly uncovered embezzlement scandal at Hale House Center, a revered Harlem children’s charity where he had been a donor.

“If people like me are giving to organizations where they are flat-out stealing,” Stamp recalls Dugan saying, “what’s happening to the people at the lower end of the giving spectrum? How do they know?”

Stamp was intrigued. “We live in a society where we evaluate and rate everything,” he says. “Before you send your kid to college or buy a new car, you can hop online and make sure it’s a good fit for you. But we weren’t really doing that with charities.” Before the evening was over, Dugan offered Stamp a new job.

With Dugan as the angel investor and Stamp as president, Charity Navigator, a nonprofit independent charity evaluator, was born. Kyle Waide (L.A. ’98) and Tim Gamory (N.Y.C. ’95) joined Stamp to help build infrastructure and technology systems and hit the ground running.

The first step was creating Charity Navigator’s rating system to evaluate charities based on their financial health. It needed to focus on two things, Stamp explains: short-term efficiency (“If I give you a dollar, how will you spend it today?”) and long-term capacity (“Are you going to be around for the long haul, growing your revenues and programs?”).

Waide set to work developing a four-star rating system that grades organizations on seven key budget and performance areas, from administrative expenses to fundraising efficiency. (He left Charity Navigator in 2004 and is now senior manager of community affairs for Home Depot.) Legally, the information Charity Navigator needed—the nonprofits’ tax returns—was public record, but getting them to provide it was another story.

“Some charities really resisted,” says Gamory, the company’s chief information officer. “There were even phone calls threatening us with legal action, which had no basis. The idea that we would rate them was just so threatening.” In the end, they began requesting the forms directly from the IRS.

On April 15, 2002—tax day— Charity Navigator launched with ratings of 1,100 charities. “We highfived and jumped up and down,” Stamp says. “Twenty minutes later there was one person on the site. The phone rang, and it was my dad calling from California to say, ‘Hey, I’m on your site!’ ” Traffic was slow in the early months, with only a few hundred visitors. To stir up interest, Stamp and his team advertised on Google and bolstered their brand by creating graphic Charity Navigator “badges” for four-star organizations to post on their websites.

Still, it wasn’t until 2004–05— when hurricanes Katrina and Rita and the Indian Ocean tsunami hit— that the site saw a significant boost in traffic. With donations pouring into relief organizations, con artists and scammers began preying on the goodwill of donors. Hits to Charity Navigator increased tenfold, and news programs across the country invited Stamp to name trustworthy charities and give tips on how to spot a fake. “[After Katrina], I did all three morning shows within 10 minutes of each other,” he recalls.

Soon, featured charities noticed a change. “We were surprised how much of a difference it did make,” says Carol Norton, the associate director for Forest Guardians, a nonprofit that protects wildlands in the Southwest. “People give because we have a high rating, and people who already give to us really like that we have a four-star rating—it increases their loyalty.”

“The horse was out of the barn, and this became the new level of transparency,” Gamory says. “The charities had to deal with it. Donors were contacting charities, asking them, ‘Why is your rating this?’ and ‘Why are you spending that?’ It was time for the new, savvy donor.”

To cater to its growing clientele— 5 million visitors in 2007—Charity Navigator now evaluates more than 5,300 charities (including Teach For America, which receives a four-star rating) and has added a plethora of new features, such as direct donation, an annual holiday-giving guide, top-10 lists, and Good Cards, which are gift cards that recipients can use to donate to any charity on the site.

Though Stamp left the company in February to become executive director of the Eisner Foundation, Charity Navigator continues to grow. The site influences close to $2 billion dollars in donations each year. Time named it one of America’s 50 Coolest Websites for 2006, and the company was recently inducted into Business Week’s 2007 Philanthropy Hall of Fame. Of the 15,000 requests to add new organizations that Charity Navigator has received since 2004, 3,000 are from thecharities themselves, Gamory says.

“It’s really raised the bar for us,” says Norton. “Now that we have the four stars, we don’t want to lose it.”

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