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BBB Wise Giving Alliance Releases Top Reasons Charities Fail to Meet Its Standards

7/8/2010

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Arlington, VA - July 7, 2010 – The BBB Wise Giving Alliance today released a list of standards that national charities most commonly fail to meet when being evaluated by the Alliance against its 20 Standards for Charity Accountability.

This analysis by the Alliance shows that insufficient transparency, inadequate board activity and the lack of assessment of charity effectiveness account for the most failures in compliance.
 
“The good news is that well over half of the national charities we review meet all of the BBB charity standards.  Unfortunately, it’s evident that many charities have more work to do to satisfy the expectations of donors,” said Art Taylor, President and CEO of the BBB Wise Giving Alliance, “Disclosure, effective governance and accountability are important indicators of a charity’s commitment to donors and the causes they serve.”

The BBB Wise Giving Alliance evaluation of the charities that provided requested information during the past two years found that more than 56 percent met all 20 Standards for Charity Accountability. Charities in the remaining 44 percent did not meet one or more of the standards.  The following are the most frequent deficiencies that were found:
 
Annual Reports
BBB Standard:  Have an annual report available to all, on request, that includes recommended program, governance and financial disclosures. 

40 percent of charities that did not meet one or more standards either did not produce an annual report or provided one that that did not include all of the recommended information.

Effectiveness Policy 
BBB Standard:  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.

36 percent of charities that did not meet one or more standards lacked the recommended board policy for periodic self-assessment.

Effectiveness Report
BBB Standard: 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 action.

35 percent of charities that did not meet one or more standards either had not completed an effectiveness assessment or did not provide its board with a written report on the results of the assessment.

Board Meetings
BBB Standard:  A minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face to face participation.  (One of these meetings can be a conference call of the full board.)

31 percent of charities that did not meet one or more standards had charity boards that met less than three times per year or lacked a majority attendance.

Web site Disclosures
BBB Standard:  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.

31 percent of charities that did not meet one or more standards had websites that did not include access (such as a link) to the group’s most recent IRS Form 990 and/or did not include other recommended information. 

“All charitable organizations should recognize the importance of charity accountability: strong governance, public access to basic information and periodic self-evaluations of the organization’s impact,” said Taylor.  “The silver lining to this cloud is that many charities have shown us that after the issues are brought to their attention they have been able to take steps to meet these standards.”

The BBB Standards for Charity Accountability, which were last revised in 2003 after a three-year project that involved extensive input from the charitable community, are used by the Alliance in preparing evaluative reports on over 1,200 nationally soliciting charities.  There is no charge to the charity for the accountability assessment and the resulting reports are available to the public free on the www.bbb.org/charity website.

For more information or to schedule an interview with a BBB Wise Giving Alliance spokesperson, contact Alison Southwick at 703-247-9376.

About the BBB Wise Giving Alliance
The BBB Wise Giving Alliance produces reports on over 1,200 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.

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