Frank Parlato
I saw CharityWatch’s report on DELTA Rescue and I realized at once, the author Laurie Styron, got it all wrong. It appeared to be a hit job on a wonderful organization. This led me to wonder, what is Charity Watch?
CharityWatch presents itself as a guide for donors – an independent evaluator – grading charities for financial transparency and efficiency.
It rates a few hundred nonprofits annually—out of the 1.5 million operating in the United States – issuing grades from A+ to F.
On its website, its tone leans heavily toward criticism, often focusing on large, well-known nonprofits.
It describes itself as the nation’s strictest watchdog, a gatekeeper for donor trust. It has gained its reputation by issuing harsh ratings of high-profile organizations.
When CharityWatch issues a failing grade, headlines follow. Donors freeze. Reputations crumble.
When a donor sees a D or F on CharityWatch, they assume misconduct. Charities serving veterans, animals, or the poor who receive a bad grade can lose crucial funding in days.
In a world of measurable standards and shared accountability, one institution remains unbound.
Its selection process for choosing the few hundred charities it evaluates is unclear. CharityWatch does not explain why some are graded while others are ignored.
It does not publish a full explanation of grading calculations. No scoring system, formula, or rubric. There’s no chart, or way to trace an “F” back to its cause.
The system appears rigorous because it is punitive.
CharityWatch measures honesty. Donors believe it. The media quotes it.
Because the watchdog said so.
It is not government affiliated. It does not issue certified findings. There is no regulatory interference. There is no CPA oversight inhibiting its grading. No peer reviews hamper its findings. CharityWatch isn’t bound by GAAS or IRS protocols.
It says it speaks for the donors. The quiet millions who want their money used well.
It gives a far higher percentage of failing grades than the other, bigger watchdogs — GuideStar (Candid), Charity Navigator, and the Better Business Bureau.
Strict Standards or Selective Scrutiny?
Candid (GuideStar), Charity Navigator, and BBB Wise Giving Alliance use widely accepted data sources—IRS filings, audits, impact metrics—and subject their processes to scrutiny. They weigh mission impact, community service, and third-party audits.
CharityWatch centers its judgment on discrepancies in tax form line items.
They rarely mention impact. They don’t visit. They don’t see the work. The numbers are the whole story.
Donors Quietly Avoid
A donor with $100 and a good heart might read the F grade and walk away. They won’t call. They won’t ask. They’ll just believe that the charity is dishonest.
A person wants to help. She reads about a sanctuary, a shelter, a school. Her heart leans in. Then CharityWatch gives it a D. She folds the check, turns the page.
The donor thinks they’re smart. They checked the watchdog. They saw a grade. They chose wisely. Donors believe they are consulting a neutral guide.
You’ve just donated to a charity. It has four stars from one watchdog. Gold transparency from another. Then you find CharityWatch. They gave it a D.
A Grade Without a Grading System
Grading systems imply standards. Criteria. A structure that can be understood, debated, improved.
Charity Watch renders A+ to F without a rubric to contest, no data to verify.
Its selective scope means its influence is outsized compared to their reach. Its ratings affect only a sliver of the sector.
Often, the groups they rate are prominent—or the most likely to generate controversy.
CharityWatch doesn’t look at all the charities. It picks a few. Imagine a ratings agency that claims to guard the public but inspects 0.02% of the field.
You read its criticisms and think, “Maybe they’re right.” Then you look closer.
No comments. No rebuttals. No transparency about their own governance.
You look for how they know. There is no formula. You look for who they are. No funding trail.
There is no panel of peers. No open debate. No rules of evidence. Yet, its decisions stick. In donor inboxes. In press clippings. In reputations, bruised.
It is a strange thing—to wield so much power from such a private place.
One Woman, One Platform, No Accountability
Few people realize it, but CharityWatch is just a one-woman organization.
Laurie Styron is the executive director and chief analyst.
One woman, a pen, and a platform. No active board. No CPA license.
You ask how she got the authority? She took it. Her authority to grade is self-appointed.
How does Styron decide the grade? She doesn’t say.
She does say, “We’re the only watchdog that tells the truth.”
A blog. A woman. No guidebook. No chart.
She writes a letter grade. Media echoes it. Donors panic.
CharityWatch tax filings do not disclose any staff. It does not say how much Styron makes out of the half a million CharityWatch takes in annually. It does not say how much Styron makes from her private consulting business – and if there is any conflict with the two as for instance a charity getting a higher rating if they learn how to improve with Styron’s consulting.
Absent any staff one can assume Styron gets most or all of the reported $325,000 salary expense, plus likely a significant expense account as indicated in its tax forms.
It’s quite something, really. One woman handing out verdicts with no cross-examination and the fate of a nonprofit hangs in the balance.
A charity might serve thousands. Feed the hungry. Shelter the sick. But if it displeases the woman in the Chicago office, it earns a public shame.
Styron says, “We’re tougher than the others.”
Never mind the people who go without because a donor read her bad review and turned away.
Somebody spends 45 years rescuing dogs – like DELTA Rescue, and CharityWatch drops a bad grade. No explanation.
People don’t ask how the bad grade got there. They don’t ask what the label means. Donors just walk away.
And somewhere, a shelter closes. A food line shortens. Nonprofits with spotless missions are discredited—without being heard.
Punishing the Good, Rewarding the Anonymous
Saving animals. Feeding kids. Keeping the lights on for someone who’s got nothing.
The self-appointed “expert” is focused, intense, and destructive.
A lady with a spreadsheet and no CPA license. She gives you a D. Donors don’t realize her guidance is based not on audits, verified impact, or certified financial review—but on undisclosed metrics, a sample size that barely scratches the surface and her opinion.
When she calls your nonprofit “wasteful”? The damage is done before anyone checks the facts. But the grades she assigns can alter the public image of a charity overnight. Her grades shape stories. Shape perceptions. Shape funding.
What’s remarkable isn’t how the grades are given—but how people believe in their fairness. A single individual rates others for transparency, yet operates without it herself.
And people treat it like gospel.
Styron cherry-picks big names, reduces complicated accounting to a scandalous headline. The model thrives on spectacle.
She says she speaks for the people—but she listens only to herself. She claims to reveal truth—but never explains how she found it.
The Final Irony: No Oversight for the Oversight Queen
Styron presents CharityWatch as a national authority on nonprofit accountability.
Yet IRS records and public filings show a tiny operation. Its annual revenue is modest—about half a million dollars. Its infrastructure is minimal.
No research department. No team of analysts going over forms. No investigative staff. No forensic accountants. No newsroom. No auditors. No review panel. No cross-checking.
Laurie, and maybe one or two clerical helpers, maybe a junior assistant gofer analyst, depending on the year.
You won’t find a funding breakdown. Still she’s seeking donations.
Still, the grades keep coming. The press still quotes them.
Pulling in half a mil a year. It’s a nice little business. A desk. A laptop. And Laurie. And we’re supposed to pretend it’s an agency with reach and rigor?
Only a woman and her mandate—self-appointed, undisputed, unelected. With a consulting business on the side.
Her CharityWatch website looks official. It’s just a blog with a letterhead.
Candid—formerly GuideStar—draws on teams of data scientists, analysts, and policy experts to inform its public evaluations. Candid builds data hubs.
Charity Navigator employs a full staff and maintains a dynamic, tech-based database of over 200,000 nonprofits. It has engineers and analysts and builds algorithms.
They have teams. They have offices, boards, audits and standards. They review hundreds of thousands of organizations.
CharityWatch?
It’s got Laurie. She reviews a few hundred organizations.
Despite this, CharityWatch’s grades are often quoted in media as if they carry institutional weight.
It’s a blog. A one-woman grading service. A desk. A domain name. A brand built on inference.
It doesn’t watch. It judges.
You ever hear of a regulator with no rules? A referee with no league?
Meet Laurie Styron. Meet CharityWatch.
You want everyone else to be honest, Laurie? Here’s an idea: go first.
Frank Parlato is an investigative journalist, media strategist, publisher, and legal consultant.
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If her reviews were true to cause than why not post the 990 or whatever else forms from irs. Don’t buy any of the backscratching reviews without data.
[…] This piece by renowned investigative journalist Frank Parlato is the first in a series available on FrankReport.com. We are reviewing his findings and have joined in the investigation of CharityWatch and Laurie […]
Laurie Styron is a psychpath
Can’t talk charity fraud without mentioning the United Way. If you served in the military, or worked in any local, county or state government occupation, each year you’d be required to sit through their tear-jerking presentation of a cheerful local rep showing you a video of some dreadful accident, like a teen paralyzed after being shoved into a pool. You’d receive their donor form, with your name and personal information pre-printed, and you were required to hand-deliver it back to your supervisor. If you returned it with Zero as the contribution, the supervisor would give you the side-eye and say you were ruining the chances our squad or unit being the top donor. After 70 yr. old United Way CEO William Aramony was arrested and indicted for fraud and for flying his 17 year old girlfriend across the country in the private jet (Belechik eat your heart out) fewer people in our office donated.Besides, after working many yrs in government, I’ve never seen one homeless outreach program or drug, suicide, unwanted pregnancy program that received one dollar from United Way. I guess they fill a lot of backpacks for kids who parents are too lazy to spend $40 for school supplies.
It’s good for parents to be able to save on school supplies, even though they can afford it, if they know that there are United Way and other organizations that will take that expense off their hands. Charity for all without control. This leaves less money for the truly needy. Charity as a social exercise allows for a clear conscience without actually changing anything about the causes.
I don’t believe the BBBs ratings of charities are legitimate. This is based on their reputation as a pay-to-play fraud. Each chapter is independently owned and operated, much like a franchise. The L.A. Chapter of the BBB gave a A+ rating after a group called Hamas paid them $425. My small business would receive voicemails from the Buffalo BBB, urging me to return their call immediately.Thinking it was a customer complaint, I’d call only to find out It was a shamless ploy to lure me into their scam. Large corps like Walmart, Lowe’s and Home Depot continue to pay tens of thousands to display their placard. It’s also strange how quickly these corps respond to BBB complaints. As a consumer, I’ve found their dispute resolution is superior to the NYS AGs Office. The trick is to file a complaint against the corporations home office.
Wikipedia
CharityWatch
CharityWatch: Formation1992; 33 years ago
Founder: Daniel Borochoff
Type: Nonprofit corporation
Tax ID no.33-0491030
Legal status: Active
Purpose: Charity ratings
HeadquartersChicago, Illinois, U.S.
Official language: English
President: Laurie Styron
Main organ: charitywatch.org
Revenue: $605,768
Staff: 5
Website: http://www.charitywatch.org
Formerly called: American Institute of Philanthropy (1992–2012)
( …)
https://en.wikipedia.org/wiki/CharityWatch
algorithms whose rating systems can easily be gamed by charities.[14] CharityWatch assigns low ratings to charities that have high fundraising costs and low program spending in cases where other charity raters have assigned the same charities perfect scores.[15] CharityWatch has also assigned high ratings to nonprofits with more complex accounting cases where the simplistic systems of other raters produced unfairly low scored for the same charity.[16]
CharityWatch also investigates ethical issues surrounding charity spending, including salaries and payouts, financial reporting, telemarketing and direct-mail solicitation campaigns, and governance. It shares the results of its research with the media and government agencies and works closely with these parties to educate the public about informed giving. CharityWatch founder Daniel Borochoff has testified before Congress about veterans charities,[17][18][19] the aftermath of Hurricanes Katrina and Rita,[20] and the philanthropic response to the 9/11 attacks.[21]
CharityWatch’s ratings have received exposure from Congress and the media; including an appearance on the front page of The Washington Post.[22][23][18][24]
Governance and operations
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CharityWatch founder, Daniel Borochoff, retired from his role as president in 2020, but remains on the charity’s board of directors. Laurie Styron, a former CharityWatch analyst, was appointed executive director in his place in February 2020.[25] In 2019, CharityWatch spent $615,950, of which 83% ($510,140) was spent on programs.[26]
Reception
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In 2005, prior to making all of its ratings available on its website, the then-named American Institute of Philanthropy (AIP) was criticized in a study on rating nonprofits published in the Stanford Social Innovation Review for having a “gotcha” mentality and limited explanation for their ratings. The study criticized several nonprofit watchdog organizations for relying heavily on financial data that is not adequate for evaluating a nonprofit organization and may misguide the public, although the study noted that AIP “recognizes the limitations of the [IRS Form] 990 and thus develops its financial health ratios by analyzing a charity’s audited financial statements”.[27]
CharityWatch does not take charities’ financial reporting at face value even when Generally Accepted Accounting Principles (GAAP) allow charities to include in-kind goods of questionable value in their financial reporting, or allow charities to include telemarketing or direct mail costs in their reported program spending.[28] Many in the nonprofit space have taken issue with this approach.[29][30][31]
Great job simplifying something so complex.
You clearly know your stuff. Great job on this article.
This was easy to follow, even for someone new like me.
What a helpful and well-structured post. Thanks a lot!
Who self-reported CharityWatch to GuideStar as “the only independent charity watchdog in the United States”?
https://www.guidestar.org/profile/33-0491030
What a scam! Lesson to all of those- myself included- who assume there is oversight.
She captured a great name and logo and then decided who would be praised and who would be destroyed. I’m sure there’s more to it and believe FR will fully expose this con artist. Well done Frank.