Better Business Bureau

Standard 6: Board Policy on Effectiveness - Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

• FAP does not meet this Standard because the board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.

Standard 7: Board Approval of Written Report on Effectiveness - Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

• FAP does not meet this Standard because the organization has not completed an effectiveness assessment and does not have one planned for the near future. 

Standard 13: Accuracy of Expenses in Financial Statements - Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

• FAP does not meet this Standard because, in the Alliance's opinion, the organization's audited financial statements for the fiscal year ended August 31, 2008 do not accurately report the organization’s fundraising and program expenses.
   
  In reaching this conclusion, we reviewed the activities of FAP’s fiscal sponsorship of artists, which the organization considers to be entirely program-related.  In the fiscal sponsorship program, artists raise funds for their own projects via personal appeals, grant proposals, etc.  Donations are made to FAP, and the artist then receives the money from FAP, minus a 6% fee kept by the charity.  The organization places limits on how the funds are expended by the artist to ensure they are used for an art project.
   
  The Alliance disagrees with the allocation of the cost of these activities solely to programs because, along with assisting artists to raise money for their own projects, the organization is also performing a fundraising activity because they are receiving the donations and re-granting them to the artists.  The expenses associated with attracting and maintaining artist membership and helping them to fundraise through instructional information should be considered a fundraising activity. 
   
  Given the Alliance’s concerns, the organization’s program expenses may be lower than $3,267,787 as reported in the audit.