Wise Giving Wednesday: Building Trust Part 5

Measuring Effectiveness: Reporting on Charity Results

In recent years, there has been increased attention on measuring the effectiveness of a charity’s activities. What progress has the charity made towards its stated goals? How well has it addressed its mission? These and similar questions are part of a growing movement that seeks to improve performance and demonstrate the value charitable organizations produce for society.

Twelve years ago, BBB WGA was the first charity monitoring organization in the nation to include effectiveness reporting as part of the collection of voluntary activities necessary for trustworthiness. Standards 6 and 7 in the BBB Standards for Charity Accountability call for a charity to take two specific actions:

a) The governing board of a charity must approve a policy that commits the organization to conducting a review every two years and based on the findings determine what future actions are necessary to improve its effectiveness. Why a board policy? As charity leadership and staff frequently change, this standard seeks to help the organization continue to conduct these assessments periodically no matter who’s in charge. The two year requirement is intended to encourage the charity to timely identify necessary course corrections.

b) The organization shall provide its governing body with a written effectiveness or results report that summarizes the charity’s performance and identifies future actions and recommended improvements.

This standard requires the board to receive the effectiveness report but is silent on whether the report should be made available to the public. We believe these assessments can serve as a valuable board tool to make sure the charity is on the right track. A report to the governing board about the charity’s effectiveness would more likely include a candid analysis (about lessons learned as well as achievements) than a public document. The temptation to water down findings to make the charity appealing to media, funders and competitors is stronger when the report is for all eyes to see.

Although not required to meet BBB Charity Standards, we strongly encourage charities to make effectiveness reports available to the public. In addition, due to the variety of charity missions and causes and the different views on how to best accomplish such effectiveness assessments, we do not require any one specific evaluation method or report format.

In order to help charities with such assessments and to encourage a common framework that can be adapted to many organizations, several years ago BBB WGA participated in a strategic alliance with Independent Sector and GuideStar USA to develop a charity effectiveness report titled “Charting Impact.” This is a series of five questions that are intended to help charities consider and communicate their progress toward impact. Currently, the Charting Impact tool is housed on GuideStar USA's website: http://www.guidestar.org/rxg/update-nonprofit-report/charting-impact.aspx A charity that uses the Charting Impact format would generally meet BBB WGA's Standard 7 as long as this report was shared with its board of directors.

As with all the BBB Charity Standards, BBB WGA encourages donors not to rely on just any one standard or issue in making a giving decision, but consider it as part of the full accountability picture provided by the 20 standards. Charity effectiveness reporting is important but in our view is just one of several practices that demonstrate trustworthiness. The need for adequate board oversight, good financial management, transparency, accurate appeals and respect for donor privacy are equally important.

In an upcoming blog we will take a deeper dive into the challenges of effectiveness reporting but we hope this overview provides a better understanding of how BBB WGA addresses charity impact in our standards.

Take a look at BBB charity reports to see if your charity of choice meets this important standard. For an A-Z directory of reports on nationally-soliciting charities, visit data-sf-ec-immutable="">. To access both local and national charity reports, use the search engine on our homepage give.org.

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