Standard 2: Number of Board Members - Soliciting organizations shall have a board of directors with a minimum of five voting members.
CSAH does not meet this standard because CSAH reports that it currently has a three-member board of directors.
In response, CSAH indicated that while it had a five-member board of directors during the 2006 fiscal year, some members have since left the board. CSAH is currently seeking to fill these vacancies.
Standard 15: Misleading Appeals - 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.
CSAH does not meet this standard for the following two reasons: (1) a statement that appeared on the CSAH website during 2007 about the organization's use of contributed funds was not supported by the information contained in the 2006 audit report, and (2) information displayed on CSAH's website during 2007and included in its 2006 audit report does not clearly identify the nature of its largest activity in the past year - the reported contribution in 2006 of 1.5 million sports score cards, with a reported wholesale value of $18,750,000, to military personnel.
During 2007, the following statement appeared on the CSAH website: “Ninety-six percent of all money contributed goes directly to service-members and their families.” However, the 96% figure is not supported by CSAH's 2006 audit report. The audit shows that of the $5.4 million cash contributions received, less than 25% went directly to service members and their families.
As of August 2007, the CSAH website referred to the sports score cards as “long distance calling cards” and “calling cards” without informing readers that these cards provided access only to sports scores. In the Alliance's opinion, this website reference to this in-kind donation provided readers with a misleading impression of the nature of this activity.
After the BBB Wise Giving Alliance initially informed CSAH , in August 2007, that the information about the cards on its website did not meet Standard 15, CSAH made some changes to the website, referring to the cards as “score cards” and adding detail about the valuation given them in its audit report. However, as of February 10, 2008, the site did not provide any further explanation of the nature of the “score cards.” However, on February 14, 2008, CSAH added the following description of score cards to their website: these score cards provided access to college and professional sports scores. Although this additional explanation has been added to the CSAH website in 2008, its omission from the website during 2007 does not meet this standard.
In addition, CSAH's 2006 audit report included conflicting descriptions of the largest program service activity. Specifically, the 2006 audit report's Detailed Statement of Functional Expenses contains three program service expense categories, the largest of which is theVeteran's Service Awards program totaling $20,686,056. This program is described in Note 2 in the 2006 audit report as a “program to assist wounded veterans (and their spouses) with direct financial aid.” However, Note 7 in the 2006 audit report states that this expense category included “calling cards with a fair value of $18,750,000.”
In response, CSAH states:
“The Coalition has not violated the prohibition on misleading appeals. In its 2006 audited financial statements the Coalition reported in-kind gift revenues of $20,686,421 and veteran service award expenses of $20,686,056. The value of the 1.5 million score cards accounted for the vast majority of both of these amounts. Dividing award expenses by the revenues, one determines that 98.6% of the revenues were distributed to the troops. The Coalition was not, therefore, overstating its financial performance by claiming that '[n]inety-six percent of all money contributed goes directly to service members and their families.' In fact, if anything the Coalition was understating its program expense-to contribution ratio by 2.6 percentage-points.
“Additionally, the word 'monies' as used on the website does not mean 'cash only' donations, as the [Alliance's] report suggests. Rather, the term is broader and includes any donations with value, namely in-kind donations like the score cards. The website was simply avoiding use of a term of art that many average people many not understand. In short, the Coalition's website reasonably employs everyday language and is accurate.
“Further, the report states that in conclusory fashion that the Coalition's website gave the 'misleading' impression about the nature of the scorecards. Not so. The website originially referred to the score cards as 'long distance calling cards' and 'calling cards,' both of which are completely accurate descriptions of the cards. Moreover, at [the Alliance's] behest we revised the website to describe the phone cards as score cards, yet [the Alliance] still believes the website is misleading....”
In response to the above CSAH comments regarding Standard 15, the Alliance notes that in its opinion, the term “money contributed' refers to cash, not donated goods or services. In addition, in the Alliance's opinion, the descriptions “long distance calling cards,” “calling cards,” and “score cards,” that appeared on the CSAH website until February 2008 without further clarification, did not convey to readers that the referenced items provide toll-free access to college and professional sports scores.