November 1, 2017

Wise Giving Wednesday: Complying with the Law vs. Meeting Standards

Over the years, one of the most frequently asked public inquiries to BBB Wise Giving Alliance is [insert organization name] a legitimate charity?  The term “legitimate” is one we seek to avoid in our reporting since it can be subject to different interpretations. Most dictionaries, however, will initially define this word as an adjective that signifies compliance with the law. In describing what the law requires of charities, some of the fundamentals include, but are not limited to, annually filing the IRS 990 financial form, registering as a soliciting charity with the applicable state government agencies, not misleading donors, not engaging in fraudulent practices and/or not misusing charitable funds to benefit charity staff and/or board members.

As a standards-based charity evaluator, however, BBB Wise Giving Alliance looks beyond the legal requirements in completing its reports on charities.  The BBB Standards for Charity Accountability, for example, encourage charities to ensure the volunteer board is active, independent and free of self-dealing, spend funds prudently and in accordance with statements made in appeals, have accurate appeals, respect donor privacy, and include specified disclosures on its website and in cause-related marketing promotions. While some of these issues overlap with legal requirements, the specific recommendations included in these standards, in many instances, call for practices that stretch beyond what the law can address.

The distinction between legal requirements and voluntary recommendations is also reflected in the language used to describe them. One complies with regulations because the law requires it, in contrast one meets a standard if one chooses to follow it.

The public expects charities “to do the right thing” and if asked, will likely indicate this means more than just meeting legal requirements. It embodies the notion of trust which we believe is an objective that is well addressed by meeting the BBB Standards for Charity Accountability.


Video of the Week

On a separate note, as part of our Building Trust Video Series, we are pleased to provide a video that features John Walter, President & CEO, Alliance for Cancer Gene Therapy, a BBB Accredited Charity, which strives to build alliances between philanthropic individuals and organizations, and medical and academic institutions, to promote cell and gene therapy research in order to combat cancer.


Finally, remember to let us know by going to https://www.give.org/ask-us-about-a-charity1/ if you are  interested in seeing a report on a charity not on the list and we will do our best to produce one.   

H. Art Taylor, President & CEO
BBB Wise Giving Alliance