Category: Wise Giving Wednesday

To complete our national charity evaluations, BBB Wise Giving Alliance asks organizations to complete a detailed online form and also submit supporting documents about their finances and activities. Charities that do not provide any of the requested information, despite repeated written requests, are called “nondisclosure charities.”  Our reports on these organizations have a literal red flag, a red exclamation mark, along with an explanation about this lack of cooperation. 

Yesterday, September 15^th, we issued a release on this subject to help bring the public’s attention to this type of report result.  In part, we were prompted to do so after recognizing that recent government actions taken against charity fraud cases showed that most of the organizations cited were organizations that had nondisclosure reports on our Give.org website. 

We are not suggesting that all nondisclosure groups are involved in such bad behaviors, but we do warn donors to be extremely cautious when contributing to charities that have not provided BBB WGA with any of the requested information. 

Due to the broad scope of the 20 BBB Standards for Charity Accountability we require much more than just an annual tax return (the IRS Form 990) in order to complete our rigorous evaluations. This also reflects our long-held belief that finances alone do not provide the full picture of a charity’s accountability.  To learn more about our efforts to encourage charity disclosure, click here. 

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On a separate note, as part of our Building Trust Video Series we are pleased to provide a video that features Michelle DeLaune, Chief Operating Officer of the National Center for Missing and Exploited Children (a BBB Accredited Charity).  This organization works closely with families of missing children to help rescue and recover them and also seeks to help prevent child sexual exploitation. 

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We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include: 

• Action Against Hunger
• Autism Society of America
• Shiloh International Ministries 

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

This week the Association of Fundraising Professionals (AFP) held its annual conference in Baltimore, Maryland. Throngs of people attended mainly to beef up their fundraising prowess. Knowing that people would rather count raindrops than attend a session on ethics, I was pleased with the level of member engagement during two sessions where I was a presenter on the topic. 

One session dealt specifically with the AFP Code of Ethics.  The second covered the relationships between the AFP Code of Ethics, the recently updated Independent Sector Principles for Good Governance and Ethical Practice and the BBB Standards for Charity Accountability. During each session the presenters’ role was to share ethical guidelines and then facilitate a discussion using cases to raise dilemmas and, when possible, bring clarity.   I was impressed by the thoughtfulness of the participants and their commitment to ethical behavior for their own good and the betterment of the fundraising profession.     

It’s great that the people most closely connected to charity donors seek to operate ethically but as these sessions went on, it became apparent that fundraisers need support from others within their organizations.  Several members told of frustrating circumstances where they were challenged to get coworkers and volunteers to see the advantages of operating within the AFP Code.   We identified strategies for building supportive networks in and outside of the organization and educating coworkers about the Code and its importance before issues arise. 

The Independent Sector Principles for Good Governance and Ethical Practice and the BBB Standards for Charity Accountability also support the efforts of well-meaning fundraisers because these tools extend beyond the fundraising profession and also address other aspects of the organization. Charities that use the IS Principles as a framework for discussions about transparency, good governance, financial management and solicitations should be better positioned to ensure ethical fundraising practices. Organizations accredited by the BBB WGA demonstrate through rigorous evaluation that they have been truthful in their public communications, they have strong operational and financial oversight and they are striving to achieve their goals. These charities will also make it easier for a fundraising professional to operate within the AFP Code. 

For those interested in seeing how the Code, Principles and Standards are complimentary, here is a link to a chart that compares the three models:  https://twitter.com/wisegiving/status/582710628634214400/photo/1  The pressure on organizations to raise revenue for mission based work is ever present.  The charitable sector must use all it has at its disposal to make it easier for fundraisers to do their jobs the right way. 

We are always working with charities to publish or update reports for donors.  Visit Give.org to check out any charity before giving.  Our recently evaluated charities include: 

• Aga Khan Foundation USA
• Baby Buggy
• Catholic Legal Immigration Network
• ChildFund International
• Fistula Foundation

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

In the business world, there is a concept in accounting that is called “going concern” which assumes that a business entity will continue to exist in the future. This same concept applies to not-for-profit organizations as well.  Outside auditors, however, when carrying out their activities when preparing a charity’s financial statements, may conclude there is substantial doubt about the organization’s ability to continue and will accordingly express this concern in the opinion and/or notes of the audited financial statements. 

Some may think this issue only emerges just when a charity’s liabilities exceed its assets and the organization has little cash on hand. This can, however, sometimes be a more complicated circumstance to consider. As explained in  Section 2.125 of the Audit and Accounting Guide for Not-for-Profit Entities (produced by the American Institute of Certified Public Accountants, AICPA, March 2016 edition,)  examples of conditions that could lead to a going concern notation, include, but are not limited to: 

• A high ratio of fund raising expenses to contributions received
• Insufficient resources to meet donor restrictions
• Concerns expressed by state authorities regarding alleged violations of state laws
• External events that could affect donors’ motivations to continue to contribute
• A loss of major funding sources 

On the other hand, the fact that a going concern issue has been identified does not necessarily mean that a charity will soon cease operations. The charity’s board of directors in conjunction with management can develop plans to offset this issue by taking appropriate measures, although they may be painful. Examples include a reduction of paid staff and other expense reduction actions. Or, it may develop alternative fund raising strategies if a major source of funding, such as government grants, has stopped for some reason. 

One recent example that came to the attention of the BBB Wise Giving Alliance is a charity that went into severe debt with a fundraising company due to the fact that the charity’s contributions were not sufficient to cover the amounts due to this company, which unfortunately was a multi-year contract. One of the lessons here is to carefully consider the risk associated with engaging in a large multi-year agreement that could raise problems if the hired firm is not successful.  The specifics of the termination clause in such contracts is key in helping the charity exit a circumstance before it overtakes them. 

Strong internal control procedures and an active finance committee on the charity’s governing board can help a charity avoid potential financial problems. Some of the caution signs to watch out for include: several years of net losses, lack of adequate accounting systems to track expenses, too many outstanding loans, and government grants and/or contracts that do not fully cover all of the costs incurred in carrying out an activity.

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On a separate note, as part of our Building trust video series, we are pleased to provide our short interview with Joshua Tripp, COO & CFO of the  Grameen Foundation (a  BBB Accredited Charity) which helps the world’s poor by providing financial services, information on agriculture and health, and helps poverty-focused organizations improve their operations by providing mobile-based management tools and other technology resources.  

 

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We are always working with charities to publish or update reports for donors. Visit  Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include: 

• ALS Association
• National Emergency Medicine Association
• WildAid 

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

The allegations surrounding the behavior of Ryan Lochte and other Olympic swimmers during a stop at a gas station in Rio created an international embarrassment.  It’s a sad result for these athletes who not only managed to tarnish their own reputations but raised questions about the professionalism of Americans participating in the Olympic games. Media reports reveal that major corporations will  not renew their advertising ties with Lochte regarding promotions of their athletic wear and other products.  In turn, one of the other swimmers agreed to a settlement with the Brazilian government and will donate approximately $10,000 to a designated charity. 

This scenario, however, provides a helpful cautionary lesson for charities seeking to gain attention by engaging celebrities to advocate their cause or assist with fundraising efforts.  A famous personality can help move the public spotlight to feature the charity’s efforts but can also harm the organization’s perceived trust if the celebrity gets in trouble.   While organizations will do their best to vet potential partners, the unexpected can still occur and charities would be wise to have an action plan already in place should the relationship turn sour. 

Donors also need to be realistic as well and not assume that questionable behavior of a celebrity is the responsibility of the charity that partnered with their famous friend, especially if the incident(s) were not previously demonstrated by the specified celebrity.  In the meantime, donors should keep the following in mind: 

• Don’t rely on a celebrity as the sole indicator of a charity’s reliability, check with outside sources such as BBB WGA.
• While some fundraising events featuring celebrities can be expensive, charities may value the public attention to their cause.
• Be wary of newly established charities that offer little beyond a celebrity connection.
• If a celebrity misbehaves, weigh the whole situation and especially how the charity handles it.
• While some altruistic celebrities have long histories with a charity, when you make a donation decision, the charity needs to gain your confidence as well. 

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On a separate note, as part of our Building Trust Video Series we are pleased to provide a video that features Lisa Marsh Ryerson, President of the AARP Foundation, a BBB Accredited Charity that seeks to serve vulnerable people ages 50 and older by creating and advancing solutions that help them secure the essentials – food, housing, income and personal connection.

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We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include: 

• Humane Society International
• National Council on Aging
• Pathfinder International 

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

I was grateful and honored to submit an article about charity transparency that appears in the summer 2016 issue of Advancing Philanthropy, the quarterly magazine produced by the Association of Fundraising Professionals, one of the world’s oldest and largest membership organizations of fundraising professionals. In part, my intended message to the fundraising community was about the importance of viewing transparency as a vital tool that can help strengthen relationships with donors and build trust. Among other things, I also recommended that charities ensure that their appeals include clear descriptions about the intended use of requested funds, encourage feedback from contributors, and to take advantage of the communications offered in social media to expand charity outreach to its supporters. In turn, the 20 BBB Standards for Charity Accountability, which we use in evaluating charitable organizations, address transparency, in part, by requiring IRS Form 990s to be accessible on a soliciting charity’s website along with other basic facts about its program activities, governance and finances. As accountability means more than just having basic information available, our standards address a variety of other vital matters such as ensuring adequate board oversight of the charity’s operations and staff, calling for charities to produce a written report on its results / effectiveness and having privacy policies in place for donors and other information collected via its website. We believe our standards help charities earn the trust of contributors in a number of ways. Transparency is a first step but not the sole objective in achieving this end.

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On a separate note, as part of our Building Trust Video Series we are pleased to provide a video featuring  David Holdworth, Executive Director of Brother’s Brother Foundation (a BBB Accredited Charity) which seeks “to promote international health and education through the efficient and effective distribution and provision of donated medical, educational, agricultural and other resources.”

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We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• Mona Foundation
• PATH
• Rescue:Freedom International 

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

As we approach Labor Day, many of us still associate that national holiday with the Muscular Dystrophy Association (MDA) Labor Day Telethon which began in 1966 and was annually held until 2014. Although the glory days of an all-day telethon for charity are long past, the MDA event holds a strong and memorable place in fundraising as it helped cumulatively collect over $2 billion. So many of the most well-known show business personalities and musical acts appeared on the show that a list that appears on the MDA website is like a Hollywood history lesson. The other anniversary that brings this telethon to mind is that the world-famous comedian Jerry Lewis, who hosted the MDA telethon for 44 years, passed away one year ago on August 20, 2017.

While fundraising on television has evolved into much shorter segments that seek to motivate viewers to contribute, more charities have turned to social media to help spread messages and images about their favorite cause.

Although Labor Day may no longer be the donation magnet it once was for MDA, it marks the end of summer and in some ways begins the march towards the now global day of contributing: Giving Tuesday which will be held on November 27, 2018.

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Video of the Week

To further spotlight Muscular Dystrophy Association and as part of our Building Trust Video Series, we are pleased to provide a video of Lynn O’Connor Vos, President and CEO, Muscular Dystrophy Association (a BBB Accredited Charity) which seeks to cure muscular dystrophy, ALS, and related diseases by funding worldwide research and provide comprehensive health care and support services, advocacy, and education.

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Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• Feeding America
• National Congress of Parents and Teachers
• Rails-to-Trails Conservancy

Finally, remember to let us know by going to give.org/charity-inquiry 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