Wallingford, CT - July 15, 2010 – A new analysis by Better Business Bureau’s Wise Giving Alliance reveals a trend among national charities that fail to meet in an evaluation by the Alliance against its 20 Standards for Charity Accountability.
Well over half of the national charities reviewed meet all BBB charity standards, nonetheless, many other charities have more work to do in the areas of disclosure, effective governance and accountability.
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 Alliance study shows that insufficient transparency, inadequate board activity and the lack of assessment of charity effectiveness account for the most failures in compliance.
The most frequent deficiencies identified are in the areas of:
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.
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.
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.
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 fewer than three times per year or lacked a majority attendance.
Web Site Disclosures
BBB Standard: Include on any charity Web sites 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 Web sites 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.
The encouraging factor is that many charities have shown that after the issues are brought to their attention they have been able to take steps to meet the BBB Wise Giving Alliance 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 Web site.
The BBB Wise Giving Alliance produces reports on over 1,200 nationally soliciting charitable organizations. The 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 Reports – 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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