Wise Giving Wednesday: Getting the Basics from Charity Annual Reports
This is the time of year when many charities begin preparing their annual reports. When done properly, this item provides a helpful narrative summary of the organization’s recent accomplishments along with financial information and a board roster. While some organizations still produce the glossy, lengthy and picture-filled publications of yesteryear, an annual report can be a far simpler and less expensive product and still fulfill its legacy of helping donors with basic facts about the charity’s activities.
Some may view the IRS Form 990, the annual financial form filed by charities, as fulfilling the role of the annual report. While we believe access to these forms is an important aspect of transparency, they can be difficult for some donors to review and often do not include an adequate narrative description of the charity’s program service activities in the past year.
One of the easiest and least expensive ways of providing the donating public with an annual report is to have a page on the charity’s website that includes all of the recommended information in one place. Specifically, Standard 16 of the BBB Standards for Charity Accountability calls for charities to produce an annual report that includes (a) the charity’s mission, (b) a summary of the year’s program accomplishments, (c) a roster of board members, and (d) financial information for the year including total income, total expenses broken out by programs, fundraising and administration, and ending net assets. Having such a page on a website helps a charity meet this standard as long as the organization is also willing to print out the report to mail to those inquirers requesting a hard copy.
In view of the important role addressed by these reports, it is sad to note that the BBB Charity Standard addressing annual reports has been one of the one of the most frequently missed standards of the nationally-soliciting charities that are evaluated by BBB Wise Giving Alliance.
While charities have many ways to communicate with donors on their website, through social media, in direct mail or other means, the annual report provides a special opportunity to share a comprehensive overview of what the organization does. When done well, it can serve to inform but also inspire readers to contribute or get involved in other ways.
Video of the Week
As part of our Building Trust Video Series, we are pleased to provide a video featuring Cheryl Crazy Bull, President and CEO, American Indian College Fund, (a BBB Accredited Charity) which works to help all Native people meet their potential by providing them with access to a higher education. In the 2016 fiscal year, the organization provided approximately 4,100 scholarships to students seeking to better their lives through higher education. AICF also provides financial and programmatic support for the needs of 34 accredited tribal colleges and universities, ranging from capital support to cultural preservation curricula.
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:
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