December 13, 2007 – Arlington, VA – Art Taylor, President and CEO of the Better Business Bureau Wise Giving Alliance testified today before the Senate Committee on Banking, Housing and Urban Affairs on the importance of charity evaluation and provided guidance for potential donors to ensure their contributions go toward worthy charities this holiday season.
As part of the expert panel for the committee hearing entitled, “Shopping Smart and Avoiding Scams: Financial Literacy During the Holiday Season,” Taylor stressed the importance of a charity’s willingness to disclose organizational information to the public: “It is on the public’s behalf that the Alliance seeks information from charities, and unfortunately, about 30 percent of the 1,200 charities we request information from choose not to provide it.”
Of the national charities that provide requested information to the BBB Wise Giving Alliance, on average, about 60-65 percent meet all of the 20 Standards for Charity Accountability and 35-40 percent do not meet one or more of the standards.
In his testimony, Taylor cited a 2001 survey commissioned by the Alliance which found that 70 percent of the public find it difficult to know whether a charity is legitimate. As Taylor explained: “It is essential that donors seek information, availing themselves of the resources available, and as well, that they expect charities to be forthcoming in providing useful information that donors can use. The public trust on which our charities depend can thrive only in an atmosphere of openness.”
The mission of the BBB Wise Giving Alliance is to help donors make informed judgments, based on ethical, financial and other considerations, about the charities that seek their support. While most organizations that monitor charities only consider fundraising ratios or details readily available on tax forms, the information requested by the Alliance from a charity in order to complete the evaluation covers not only a charity’s finances but the organization’s governance, the accuracy of its communications with the public, the content of its Web site, its respect for donor privacy—and other aspects of charity operation that the Alliance’s 20 Standards for Charity Accountability address.
“Charitable giving always attracts special attention during the holidays, but our view is that donors must be pro-active throughout the year,” said Taylor. “Donors should expect accountability from charities and be ready to shun those that do not provide it. Acting from that position, they are far less apt to make poor giving decisions based upon holiday season emotions.”
Taylor also offered guidance on how to research charitable organizations to ensure donations are given to worthy charities. Following is a partial list of the advice Taylor offered to the Committee:
- Check with outside sources. Check with your appropriate state government authorities to verify the charity is registered to solicit in your state. This is usually a division of the state’s office of the attorney general. Also, contact the BBB Wise Giving Alliance (www.bbb.org/charity) for information on national charities or the BBB serving your area for information on local charitable organizations.
- Carefully scrutinize Internet appeals. For those making donations to giving sites on the Internet, look for clear disclosures that explain how much of the gift goes to the charity, the privacy policy, and whether there is appropriate security on the site for credit card transactions.
- Question vague appeals. Make sure the charity’s appeal clearly identifies the nature of its programs. For example, if the charity says it’s helping the homeless, does it explain how (shelter, food, medical care) and where this is taking place?
- Keep records of your donations. Keep receipts, canceled checks, and bank statements that verify your contribution amounts. The IRS also requires donations to be substantiated through a written confirmation from the charity.
- Remember: Not all soliciting groups are charities. If you want to take a charitable deduction for federal income tax purposes, make sure the organization is tax exempt as a charity under section 501(c)(3) of the Internal Revenue Code. To verify a charity’s tax status, visit the following IRS site: http://apps.irs.gov/app/pub78.
For more information on the BBB Wise Giving Alliance and to access more the 1,200 Wise Giving ReportsTM on national charities, go to www.bbb.org/charity.
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Click here for a complete copy of Art Taylor’s testimony. Please contact Alison Preszler at 703-247-9376 or apreszler@council.bbb.org. to schedule an interview.
About the BBB Wise Giving Alliance
The BBB Wise Giving Alliance produces reports on nationally soliciting charitable organizations. The BBB Wise Giving Alliance does not rank charities but rather seeks to assist donors in making informed judgments by providing objective evaluations of national charities based on 20 strict standards. The outcomes of the evaluations – or BBB Wise Giving ReportsTM – are available online at www.bbb.org/charity. The BBB Wise Giving Alliance is an affiliate of the Council of Better Business Bureaus, the national organization representing 114 BBBs serving communities across the U.S. The BBB system evaluates and monitors more than 3 million local and national businesses and charities. Please visit www.bbb.org for more information.