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Charity Navigator Downgrades HSUS



Whenever we point out that the independent watchdogCharityWatch gives the Humane Society of the United States a C-minus grade, HSUS usually retorts that it gets four stars (out of four) from Charity Navigator, a different evaluator. No more.

Today we learned Charity Navigator has downgraded HSUS from four stars to three. The reason? After we filed an IRS complaint against HSUS last fall, alleging that HSUS had improperly inflated its revenue for several years, HSUSfiled amended tax returns. (Independent experts, such as CharityWatch anda Minnesota tax attorney, also thought HSUS was in the wrong.) Based on this amended data, Charity Navigator has revised its rating of HSUS and downgraded the group.

Sorry,Wayne Pacelleand company.

And the Charity Navigator rating could be even lower. Charity Navigator sometimes factors inan accounting trick used by charitieswhereby the organizations classify fundraising costs as “program spending” in order to boost their perceived financial efficiency to donors. In its ratings of a number of charities, including animal groups like PCRM and ASCPA, Charity Navigator adjusts the reported expenses of the charities to reflect that the organizations use this accounting method.

But for some reason, Charity Navigator doesn't do this for HSUS. If it did, we suspect HSUS's three stars would drop to two stars.

There's one more unturned stone. We asked the IRS to fine HSUS, as permitted under federal regulations, for each day that each of its tax returns was incomplete. Did the agency do so? We'll probably never know. But it's good to see other organizations holding HSUS accountable.

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