Local Charity Review Brochure

  
     
 
Better Business Bureau of
Western Michigan, Inc

WHAT IS IT?

LCR is a program of the BBB's to provide reports on local charities and soliciting organizations who contact western Michigan foundations, corporations, umbrella charities (e.g. United Way), and individual donors for support. BBB-LCR requests detailed financial information, marketing materials, proof of governance items, and other materials to "evaluate charities against a proven set of standards". No other local organization provides an unbiased, report based on standardized facts re governance, finances, and fund-raising.

WHY DOES THE BBB DO THIS?

BBB's have reported on ethical business practices, in the public interest, for over 90 years. The growth of national and local charities soliciting funds in local communities has grown into a $200 billion plus per year industry. Not all of these soliciting charities are ethical in their practices or efficient in their use of funds.

Reputable charities are hurt by the ineffective, inefficient, and misdirected (though technically legal) "quasi-charities" that exist. Our goal is to make donors more aware of the reputable charities and more concerned about ineffective charities use of donor support.

DON'T GOVERNMENT AGENCIES DO THE SAME THING?

No; though millions of tax dollars are spent annually to register, license, and collect financial (IRS form 990) data, no one issues a report, nor evaluates against any known standards. No one evaluates and reports to the public on charities.

DOES THE BBB-LCR "APPROVE" CHARITIES?

No; the BBB will not "approve or disapprove" any charity voluntarily submitting the requested information. It will issue a report based on the facts provided and let the donor decide whether the charity is worthy of their support. BBB reports will include information evaluated against "accepted standards of good charitable practices", and state that the charity in question either "meets" or "does not meet" the specific standard.

WHERE CAN I FIND A BBB CHARITY REPORT:

Reports on "national" charities can be found at: www.give.org. Reports on western Michigan based charities can be found at www.grandrapids.bbb.org or by calling or writing the BBB of Western Michigan.

WHAT IF I CALL THE BBB AND THEY DON'T HAVE A REPORT ON THE CHARITY IN QUESTION:

Your "inquiry" to the BBB of Western Michigan will trigger a request to the charity for information. The charity will then have 30 days to voluntarily provide the LCR Review questionnaire materials. If the charity chooses not to reply to the BBB, that will be reported by the Bureau as "we have twice attempted to collect the information, but the charity did not respond". Donors alone will determine if that is an adequate response to their quest for factual information.

WHO MAY USE BBB-LCR REPORTS?

All BBB-LCR reports may be viewed by the public, umbrella organizations, corporations and foundations in order to make an informed decision about the charity's solicitation. No LCR report may be "reproduced" and used by a competing charity in their solicitation material as BBB reports are copyrighted and the trademark is registered and protected.

 
When in doubt - Check it out!
 

BBB-LCR "STANDARDS"
For Charity Accountability

GOVERNANCE
  1. Board provides adequate oversight of charity's operations & staff performance; including accounting procedures
  2. Board has minimum of 5 voting members
  3. Board meets 3 times per yr; majority in attendance
  4. Voting members of board do not have more than one or 10% compensated staff members, compensated members shall not serve as Chairman or Treasurer
  5. No material conflict of interest transactions via board, staff, or business relationships
CHARITY EFFECTIVENESS
  1. Board policy to review and assess performance of charity to ward achieving its mission
  2. Board receives & approves a written report regularly to determine effectiveness and future recommendations
FINANCES
  1. Spend at least 65% of expenses on program activities
  2. Spend no more than 35% of contributions on fund raising
  3. Avoid accumulating "net asset funds" in excess of 3x annual expenses
  4. Make available, on request, annual financial statements; "audited" if more than $250,000 income annually; "reviewed" if $250K to $100K; under $100K annually an internal produced financial statement will suffice
  5. Financial statements must include a "breakdown of expenses" that show portion allocated to program, fund raising, and administrative activities
  6. Accurately Report detailed expenses in all financial statements
  7. Provide a board approved, annual budget outlining projected expenses for program services, fund raising and administration.
FUND RAISING INFORMATION
  1. All solicitation materials are accurate, truthful & not misleading, in whole and in part
  2. Produce an "Annual report" that includes:
    1. mission statement;
    2. summary of program accomplishments;
    3. roster of officers & board members;
    4. financial summary of income, expenses by category, ending net assets
  3. Location of web sites that solicit contributions; mailing address of charity & information on how to electronically access IRS form #990
  4. Privacy Issues: Check off box/opt out option for donors who "do not" want their name & address shared outside of the organization. Also, have a clear & prominent "privacy policy" on all web sites used by the charity
  5. Complete "disclosure" on how the charity benefits from the sale of products or services that states how a charity will benefit from a consumer sale
  6. Respond to complaints to the BBB about fund raising, privacy violations, and/or other issues

 

BBB - Local Charity Review (LCR) is a program of the
BBB-WMI’s Education Foundation, a 501(c)(3) organization.


Better Business Bureau of Western Michigan, Inc.
40 Pearl NW #354
Grand Rapids MI 49503


Phone:   616.774.8236 Local WebSites:   www.grandrapids.bbb.org
Fax: 616.774.2014d>   www.holland.bbb.org
Email:
  www.grandhaven.bbb.org
  bbbinfo@iserv.net   www.kalamazoo.bbb.org
  bbbprob@iserv.net   www.battlecreek.bbb.org
      www.southhaven.bbb.org
      www.muskegon.bbb.org
      www.centralmich.bbb.org
      www.northernmich.bbb.org
 
Website to access national charity reports:   www.give.org