Search for the best carbon offset nonprofits and you’ll get lists. Most of them don’t tell you how they were made. Some are sponsored, some are ranked by gut feel, and a few quietly mix charities with companies that sell credits for profit. Starting this week, we’re publishing a ranking of our own on Thursdays. Before we put a single organization above another, we want to show the method, so you can check our work and argue with it.
The ten we track
Our list is ten organizations that keep showing up when people look for ways to cover their footprint or fund climate work: Cool Effect, atmosfair, myclimate, American Forests, the Arbor Day Foundation, The Nature Conservancy, One Tree Planted, Trees for the Future, Carbonfund.org and Climate Vault.
They aren’t one kind of thing. Some sell offsets per tonne, some plant trees per dollar, and some fund projects without promising a tonnage at all. They don’t all sit under the same rules either. Climate Vault, for example, states that it is a nonprofit, tax-exempt organization under Section 501(c)(3) of the U.S. Internal Revenue Code. myclimate describes itself as a Zurich-headquartered non-profit organisation with Swiss roots, so U.S. tax filings won’t tell its story. And when we loaded carbonfund.org this week, the site was titled “ClimeCo - Buy Carbon Offsets | Plastic Offsets”. We’ll keep the name you’d search for on the list, but we’ll note the branding change and look into who’s behind it before we score it.
A fair ranking has to say which yardstick fits which organization, and say plainly when one doesn’t fit at all.
What we read: public filings, not marketing pages
For U.S. charities, the backbone of our method is the IRS Form 990, the annual return most tax-exempt groups file. ProPublica’s Nonprofit Explorer makes these free to browse. It explains that most organizations recognized as tax exempt by the IRS have to file the Form 990 every year, unless they make less than $200,000 in revenue and have less than $500,000 in assets, in which case a shorter form applies.
The part of the 990 we care about most is Part IX, the Statement of Functional Expenses. The IRS instructions lay out its columns as Total, Program Services, Management and General, and Fundraising. That split is where an overhead ratio comes from: how much of every dollar spent went to the mission, and how much went to running the organization and raising more money.
Homepage counters, impact claims and testimonials are useful context, and we’ve read all ten sites. But a number a charity reports on a page it designed isn’t the same as a figure it signs on a federal return. When we can, we use the return.
Overhead ratios: a clue, not a verdict
Overhead is the number donors ask about most, so we’ll report it. There are published benchmarks to compare it with. The BBB Wise Giving Alliance standards ask that a charity spend at least 65% of its total expenses on program activities and spend no more than 35% of related contributions on fund raising.
Two caveats keep us from treating that ratio as the whole answer. First, the split is partly an accounting choice. The IRS instructions say that if an organization’s accounting system doesn’t allocate expenses, the organization can use any reasonable method of allocation. Two groups doing identical work can report different ratios. Second, low overhead doesn’t prove high impact. A charity can spend 95% on programs that don’t remove much carbon, and a charity that invests in measurement and verification can look worse on paper for doing exactly what a careful donor wants.
That’s why the big evaluators have moved past overhead alone. Charity Navigator rates across several areas. Its Accountability & Finance area asks whether a charity is accountable, transparent and financially efficient and sustainable, and its Impact & Measurement area asks how well the charity’s program(s) performs relative to cost required to run it. It also only rates charities with a track record: three years of IRS Form 990 filings. We’ll link to outside ratings where they exist, but we won’t just copy them.
Our scorecard
For each of the ten, we’ll publish:
- Financials. Program, management and fundraising shares from the latest filing we can find, with the filing year and a link. Where there’s no U.S. filing, we’ll say so and use the organization’s own audited reports if they publish them.
- What a dollar buys. Whether the organization promises tonnes, trees or something else, and what standard or registry, if any, backs that promise.
- Transparency. Whether projects are named, located and independently checked, and whether you can trace your gift to one.
- Attention. Traffic and search trends, so you can see who people are actually looking for. We’ll only include these where we have a source we can name.
What we won’t do
We won’t invent numbers. If we can’t find a figure from a source we can link, the cell says “unavailable.” Right now, before our first data pull, that’s every cell. We’d rather publish an honest blank than a confident guess.
We won’t take payment for placement, and none of the ten has asked. We’ll date every figure, because nonprofit finances change year to year, and we’ll refresh the ranking monthly and say what moved and why.
We also aren’t neutral about one thing: we’re building our own carbon footprint calculator. Its checkout is a prototype. No real credits are sold or retired through this site today, so nothing in this ranking is steering you toward something we sell.
What’s next
Next Thursday we’ll dig into overhead ratios, including what admin costs actually pay for and how to read Part IX yourself. After that come head-to-heads, starting with three very different models of carbon giving.
Before you pick an organization, know what you’re trying to cover. Calculate your footprint. It takes about three minutes.