Standard 1: Oversight of Operations and Staff - Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.
NRC does not meet this Standard because:
In 2006 NRC agreed to contribute a total of $5,000,000 over the course of five years to this other non-profit, Charity One for an endowment fund. NRC contributed a total of $4,000,000 to this fund, and then in 2009 its board voted to cease funding the endowment through Charity One.
The agreement between NRC and Charity One also stipulated that Charity One would annually provide NRC with its IRS Form 990 as well as any audited financial statements produced. NRC stated that it received copies of IRS Form 990 for 2006 through 2008 from Charity One. However, the Alliance's review of these files found no interest accrued. Further, the accounting was done on a cash basis, thus limiting NRC's ability to know of any potential gains and/or losses on investments experienced by Charity One. Given that the endowment agreement between NRC and Charity One stipulated that only investment income may be used to fund the scholarships and to pay the general expenses of the endowment, the Alliance believes that NRC's board has demonstrated a lack of adequate oversight.
In addition, according to IRS records, Charity One's tax-exempt status was revoked in July 2011, due to the organization's failure to file the IRS Form 990 for three consecutive years. The agreement between NRC and Charity One stipulated that if Charity One lost its 501(c)(3) (tax-exempt) status, the money would be returned.
Update: In October 2013 former CEO Brian Brown was arrested and indicted by the U.S. Attorney for the District of Oregon. According to a press release from the U.S. Attorney's office, the indictment alleges that, "Brown...induced National Relief Charities to fund Charity One Inc. with $4 million from 2006 through 2009, which Brown represented would be used to fund educational scholarships for Native Americans. Instead, Brown and unnamed coconspirators allegedly used the entire $4 million for their personal benefit...To facilitate the fraud scheme, Brown allegedly gave National Relief Charities false financial statements showing Charity One, Inc. was properly using the money."
Number of complaints processed by the BBB in the last 36 months: 21
Phone/Mailing List Removal
The organization addressed the complaint issues brought to its attention: 21
The organization did not address the complaint issues brought to its attention: 0
(These complaints involve individuals seeking to have their name and address removed from the organization's phone and/or mailing list.)
Year, State Incorporated: 1990, North Carolina
Also Known As: American Indian Education Foundation, American Indian Relief Council, Council of Indian Nations, Native American Aid, Navajo Relief Fund, Rescue Operation For Animals of the Reservation, Sioux Nation Relief Fund, Southwest Indian Relief Council
Stated Purpose: "to help Native American people improve the quality of their lives by providing opportunities for them to bring about positive changes in their communities."
Note: According to NRC's 2010 financial statements, the organization received $19,320,788 in in-kind contributions including miscellaneous ($4,757,123), clothing and household goods ($4,434,420), food inventory ($4,328,796), personal care (3,744,730), drugs and medical supplies ($1,009,383), residential ($618,461), baby care items ($413,249), and books and publications ($14,626).
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own judgment. If the report is about a charity and states the charity meets or does
not meet the
Standards for Charity Accountability, it reflects the results of an evaluation
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Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.
Soliciting organizations shall have a board of directors with a minimum of five voting members.
The organization meets this standard.
An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.
Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.
No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.
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.
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.
Spend at least 65% of its total expenses on program activities.
Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.
Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.
Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.
Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.
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.
Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.
Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.
Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.
Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.
Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).