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As summer officially begins in a couple of weeks, I am reminded that this is the time of year when many people attend concerts, especially outdoor or large arena events featuring a favorite singer or band. Alternatively, a community might have a music festival of some kind that includes a variety of artists. The promotions for a number of these gatherings may also promise that tickets sales will help some specified charity or cause. This certainly adds an additional motivation to attend, but we encourage music lovers to also keep the following seven tips in mind before making a purchase: 

• Visit the specified charity’s website to learn more about their activities and whether this is an organization you want to support. Watch out for event promotions that reference a cause, such as breast cancer, without indicating which charity will be helped. 

• Don’t assume that all merchandise (such as t-shirts) sold at a charity concert will help the organization, unless they are authorized to do so and specify the connection. 

• Don’t assume the entire purchase will benefit the charity, usually it’s just a portion of the normal ticket purchase price. But the volume of tickets sold can add up to big bucks for the charity. 

• Charity concert tickets that are being sold at the usual price for such events (i.e., fair market value) are not deductible as charitable gifts for federal income tax purposes. 

• Be wary of ticket scalpers. No one likes to pay inflated prices and some concert organizers prohibit this type of third-party sale. Regardless, also remember that selling a ticket at inflated prices does not mean that the designated charity will get more money. 

• Giving opportunities are not limited to concert sales. If interested in the charity, you can also go to its website directly and donated online. 

• Finally, verify charity trustworthiness by visiting Give.org to see if the organization meets the 20 BBB Standards for Charity Accountability . 

Video of the Week 

As part of our Building Trust Video Series, we are pleased to provide a video featuring Debbie Rambis, Executive Director, The Compassionate Friends, a BBB Accredited Charity, that offers friendship, understanding, and hope to bereaved parents, siblings, grandparents, and other family members during the natural grieving process after a child has died.  

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:

• Compassion International
• National Hemophilia Foundation
• Pediatric Brain Tumor Foundation of the U.S. 

Finally, remember to let us know by going to  www.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

Almost 400 hundred years ago, the famous English poet John Donne said that “no man is an island.” In many ways, the same can be said for charities as well. While each charity carries out its own mission, they often can achieve greater success by collaborating and working with others seeking to address similar needs. While this is most often seen in the wake of a natural disaster as relief organizations address emergency needs of the impacted population, many other types of charities have achieved greater results by working with communities and other organizations.

As part of our Building Trust Video Series we are pleased to provide a video that features Johannah Barry, President of the Galapagos Conservancy (a BBB Accredited Charity).  The Conservancy is a United States based organization that works to conserve marine and terrestrial ecosystems and their flora and fauna in the Galapagos Islands. Among other things, it supports research and public policy to address the human impact on the Galapagos wilderness. Each of their major programs has a major partner, either another nonprofit organization or a government institution. As you will see in the video, Johannah explains that all of their programs are created in collaboration since they believe without it conservation activities are not going to be effective.

The Galapagos Conservancy is a great example in demonstrating that even on a literal island, you need to work with others to achieve a successful result. The lesson for donors is to look for charities that collaborate to help identify those that may help avoid duplication of effort and are likely to have a better chance in achieving their announced goals and objectives.

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: 

• Conservation International Foundation
• National Psoriasis Foundation
• Youth Development Fund 

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

Each year the U.S. Internal Revenue Service produces a Data Book that provides information and statistics about returns filed, taxes collected and related issues such as data on tax-exempt organizations.  The 2017 Data Book which was released about a month ago includes a table which shows the number of tax-exempt organizations. There are 20 different categories that fall under section 501(c) of the Internal Revenue Code which includes various types of organizations (including, but not limited to, labor unions, lobbying organizations, business leagues, recreation clubs, fraternal groups, benevolent life insurance companies, etc.). For 2017, the IRS reports that the combined total number of organizations under this 501(c) category was 1,646,650.

The largest of these categories in terms of the number of organizations, is section 501(c)(3) which covers charitable organizations. The IRS reports that in 2017 there were 1,286,181 organizations that were included in this 501(c)(3) charitable tax-exempt status. That total represents 78% of the combined total number of 501(c) groups referenced above. 

The actual total number of charities in the U.S., however, may be a bit higher than 1,286,181 for several reasons:

• Houses of worship (churches, synagogues, mosques, etc.) are not required to file for 501(c)(3) status in order to have charitable tax-exempt status. It is estimated that there are about 350,000 religious congregations in the U.S.
• If an organization that operates under the IRS definition of a charity has gross revenue of less than $5,000, it is not required to apply for 501(c)(3) in order to have this charitable tax-exempt status.
• Some organizations may fall under a group exemption letter held by a parent organization. 

While that 1.28 million total is huge, keep in mind that most of these charities are very small. More than half of them bring in $50,000 or less and do not fill out the IRS Form 990. Instead, they complete the IRS Form 990-N which is a type of electronic postcard that confirms they continue to operate. The remainders complete either IRS Form 990-EZ (gross income between $50,000 and $200,000) or the full IRS Form 990 ($200,000 or more in gross revenue.)  Also this group includes about 87,000 private foundations (in general, these are private or corporate foundations that give out grants and do not solicit) which complete the IRS Form 990-PF. 

Finally, the total number of charities has been growing. As shown in the IRS Data Book for the past five years, the total average gain in the number of 501(c)(3) organizations has been about 47,000 charities per year. This average increase incorporates newly formed organizations and reflects subtractions of those that have either lost their exempt status or ceased operations: 

Number of 501(c)(3) tax-exempt charities

2013      1,052,495
2014      1,117,941
2015      1,184,547
2016      1,237,094
2017      1,286,181 

While some may view this growth as creating a challenging choice for donors, others see the size of this sector as an asset that generates new ideas and approaches to problems and issues facing society. In turn, we believe the 20 BBB Standards for Charity Accountability provides helpful guidance for both new as well as existing charities and helps donors identify trustworthy organizations. 

Video of the Week 

As part of our Building Trust Video Series, we are pleased to provide a video featuring Brian Brewer, Director of Marketing and Communications, of the Cancer Research Institute (a BBB Accredited Charity) which funds research at academic centers around the world through fellowships, grants, and clinical trials focused on increasing the understanding of the immune system and with the goal of developing immunological methods for the prevention and treatment of cancer. CRI also provides information to the public about cancer immunotherapy, and connects patients to immunotherapy clinical trials. 

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:

• Hadassah
• National Multiple Sclerosis Society
• WaterAid America 

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

Two years ago, when the BBB Wise Giving Alliance was one of the co-signers on The Overhead Myth letter, more than one charity executive approached me with the mistaken impression that we were no longer using expense ratios in our charity evaluations. That wasn’t the case at all.  As explained in the letter, we urged the donating public not to solely consider financial ratios in making their giving decisions and to look at a more complete picture of a charity’s accountability. We still strongly believe that today as reflected in the diversity of issues covered by the 20 BBB Charity Standards. Overall, we are seeking to ensure that the charity is spending its funds in accordance with donor expectations as expressed in its fund raising appeals.

As identified in BBB Charity Standards 8 and 9, we have specific expense thresholds that we verify as part of the financial analysis of our accreditation assessments. Specifically, our standards call for:

• Total program service expenses to be at least 65% of total expenses, and
• Total fund raising expenses not to exceed more than 35% of total related contributions (i.e., donations received as a result of fund raising efforts).

While I will probably devote more than one blog to this subject, there are a few major points about these two standards that I would like to explain. First, in applying both of these standards we look at a full year’s worth of expenses, not just an individual fund raising campaign. Another significant issue is that both of these standards serve as threshold verifications. In other words, as long as the subject charity satisfies these minimums, our report does not make any judgment about the charity’s expense ratios. The third point is that we generally use the charity’s audited financial statements, as opposed to the IRS Form 990, when completing the financial part of our standards.  In our view, the audited financial statements provide a more reliable and accurate presentation of the charity’s finances, in part, because they are required to follow Generally Accepted Accounting Principles (GAAP) which helps ensure that the statements are consistent, complete and more comparable.

Please also recognize that the two cited ratios above have different denominators.  The program ratio is based on total expense while the fund raising ratio is based on total contributions.

Also, BBB WGA will consider extenuating circumstances that the charity brings to our attention in applying these standards (for example, the higher fund raising expense of a newly created organization). Each charity is reviewed on a fact circumstance basis. 

On a separate note, as part of our Building Trust Video Series we are pleased to provide a video that features Robert Lee Bull Jr,  Chief Development Officer of the National Trust for Historic Preservation  (a BBB Accredited Charity). Robert provides a brief overview of the National Trust’s program activities and explains what they do to help strengthen donor trust.

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:

• Mali Rising Foundation
• National Park Trust
• Statue of Liberty-Ellis Island 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

A statement used in a charity appeal can be accurate but may still provide a misleading impression to donors. While each appeal  aims to make a strong case for support, there are certain phrases and references that cause BBB’s Give.org staff members to take notice and question the solicitation. One example is when an appeal contains a promise that the charity will spend 100% of donations on program services.

Charities that make this claim actually do have administrative and fundraising functions.  However, they will have  made an arrangement whereby funds received from other sources, such as board members, corporations or  sponsors, are being directed to pay for the charity’s administrative and fundraising expenses. It’s also possible that some of the administrative and fundraising duties are carried out by volunteers.  Unfortunately, the applicable explanation may be absent when the 100% claim is used. As a result, contributors may get the mistaken impression that the charity does not have any “overhead.” 

In other words, this 100% claim in appeals is used to influence a donation by making it appear that the charity has low or no overhead. It also undermines the importance of the need for reasonable overhead spending, perpetuating the “Overhead Myth.”  BBB Charity Standard 15 calls for solicitations and informational materials, distributed by any means, to be accurate, truthful and not misleading, both in whole and in part.  If BBB WGA sees a 100% claim like the one mentioned above, the charity will not meet this standard unless it also includes a prominent explanation near the percentage reference that states how its overhead expenses are covered. 

As part of our Building Trust Video series, we are pleased to provide a video that features Michael Roberts, President and CEO, First Nations Development Institute (a BBB Accredited Charity) which works to improve economic conditions for Native Americans through technical assistance and training, advocacy and policy, and direct financial grants.  

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:

• National Eating Disorders Association
• Operation Homefront
• SADD 

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

Last week’s blog included some comments and advice on donating to different stages of Nepal earthquake relief efforts that will require future support just as much as today. In the past decade, fundraising for disaster relief became one of the first charity activities that demonstrated continuing success with both online and mobile contributions, and now social media as well. Disasters generate immediate public concern that motivate individuals to respond with the urgency such tragedies deserve. 

Facebook added a Donate Button in conjunction with users’ News Feed which resulted in over $10 million for Nepal relief efforts going to the International Medical Corps. Here, social media was helping to raise funds for a BBB Accredited Charity with significant experience in emergency response to disasters.  Perhaps inspired by this successful effort, BBBs also learned others created questionable requests via Facebook that had nothing to do with established charities.   

Crowdfunding also became a player in addressing the desire to send help to Nepal for smaller relief efforts.  GlobalGiving.org, another BBB Accredited Charity, raised $2.3 million towards its goal of $2.5 million for various Nepal relief projects that go through significant vetting by GlobalGiving before posting. But not every crowdfunding experience conducts that type of due diligence. 

Some of the other crowdfunding sites, such as those run by for-profit firms, enable individuals to post a project for Nepal relief with nothing more than a Paypal and Facebook account for identity verification.  A visit to some of these report individuals raising $30,000, $100,000 or more for reported projects such as rebuilding homes, assisting earthquake victims, and other efforts.  While most of these are probably well meaning and honest about their appeals, how does one sort out which of these activities are real or will be accomplished?  Unfortunately, these types of crowdfunding efforts involve an element of donor risk as well as raise problems with tax deductibility if the recipient is not an established charity that has 501(c)(3) tax exempt status. 

Social media does present opportunities to help raise funds from a larger audience of potential donors in the wake of a disaster, but  con artists and questionable efforts can arise during this surge of popularity. Individual stories of need can be touching and heart wrenching, but that should not be the sole basis on which to make an informed giving decision. Our best recommendation is to seek out trustworthy charities by verifying if charity is BBB Accredited (meets all 20 BBB Charity Standards). 

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:   

• Pulmonary Fibrosis Foundation
• Soccer Without Borders
• National Association for the Exchange of Industrial Resources
• Trickle Up Program 

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

Giving USA, the annual summary of U.S. giving statistics produced by the Indiana University Lily Family School of Philanthropy, just released figures for 2016 giving this week.  As reported in the Chronicle of Philanthropy and other media articles such as the AP story in the Washington Post , 2016 contributions totaled $390.1 billion which increased 2.7 percent in current dollars (1.4 percent adjusted for inflation) over the previous year. The largest reported increase was for environmental and animal-welfare organizations which increased 5.8 percent after adjusting for inflation.  However, religious organizations continued to capture the biggest part of the giving pie with a slice totaling $122.9 billion representing 32% of total giving, followed by education (15%), human services (12%), health (8%), and all other causes (33%). 

In addition to confirming American generosity, this report reminds us each year that giving from living individuals (i.e., not including bequests) comprises 70% of donations totaling $281.9 billion dollars.  Individual giving is the largest share of giving, and in my discussions with people about contributions, I sometimes hear the mistaken impression that foundations or corporations contribute a larger amount of the total than they actually do. 

We believe that each donor makes a difference, no matter how much they decide to give, since cumulatively they are the most significant part of philanthropy in terms of giving totals. This is also all the more reason to make each contribution count by verifying the trustworthiness of charities by visiting Give.org to find out if the subject charity meets the 20 BBB Standards for Charity Accountability. 

As part of our Building Trust Video series, we are pleased to provide a video of Delaney Gracy, M.D., Senior Vice President and Chief Medical Officer, Children’s Health Fund (a BBB Accredited Charity) which seeks to deliver health care to disadvantaged children. Among other things, it has a national network that operates in 17 states and the District of Columbia that help reach over 75,000 individuals each year. 

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:

• Love146
• NAEIR/National Association for the Exchange of Industrial Resources
• Oxfam America 

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