All about BBB Charity Reviews
Value of Independent BBB Charity Review
These are challenging times for charities. Competition for funding is fierce. Reports about questionable activities by a few nonprofits often prompt intense media and regulatory scrutiny of charities in general. In this environment, it is valuable for charities to distinguish themselves as organizations committed to transparent and accountable practices. A BBB charity review provides confirmation of a charity’s practices in key performance areas, as captured by the BBB Standards for Charity Accountability, by a widely known and highly respected accrediting organization. Meeting the comprehensive BBB Standards helps position organizations to succeed, and also encourages charitable giving.
Why Does BBB Review Charities?
In 2011, more than 103 million consumers relied on the BBB to help them find and recommend businesses and charities they can trust across North America. BBBs have reported on charities to benefit the public for at least 70 years or more. BBB charity review programs originated as early as the 1930’s, in response to requests from businesses and consumers for BBB information about the legitimacy of charities and solicitations.
The BBB system currently publishes about 11,000 in-depth reviews on charities, assessing their performance against the 20 BBB Standards for Charity Accountability.
BBB charity review is a core program of the Education Foundation of the Better Business Bureau Serving Central East Texas. The BBB Education Foundation promotes public recognition of accountable charities, provides charity effectiveness education, and encourages informed giving.
BBB Standards for Charity Accountability: Road Map for Success
The 20 national BBB Standards for Charity Accountability were developed by the BBB Wise Giving Alliance with guidance from a blue-ribbon panel of philanthropy and charity experts. They apply to all BBB charity reviews. Charities that meet all BBB Standards are considered “BBB Accredited.” BBB Serving Central East Texas charity reviews are done at no charge to the charity. There is a modest fee based on charity size if a charity that first meets all 20 BBB Standards decides to license the BBB Accredited Charity Seal, as a highly recognizable symbol of the charity’s performance against Standards, for fundraising purposes.
BBB Standards provide guidelines for successful nonprofit practices in these critical areas of operations:
- Fundraising and Communications
The basic principle underpinning the BBB Standards for Charity Accountability is that a charity should fully disclose relevant information to donors, especially at the point of solicitation or when requested. The Standards also recommend ethical management practices to ensure public confidence in the charitable sector and encourage giving. As voluntary guidelines, they also go beyond the requirements of local, state and federal laws and regulations.
In the context of BBB charity review, voluntary disclosure by the charity is seen as an important way to demonstrate transparency. Charities are expected to hold themselves to the spirit as well as the letter of the BBB Standards, in order to show accountability. The Standards address key charity performance issues. Examples:
- The Standards emphasize accuracy and clear disclosure in fundraising solicitations; donated funds should therefore be used for the purposes stated in solicitations.
- While virtually all charities must necessarily incur some fundraising costs, the Standards state that those costs should not exceed a reasonable percentage of related contributions to the charity. Similarly, claims of “zero fundraising expenses” would be considered highly questionable.
- BBB Standards emphasize the importance of careful controls and ethical practices in all fundraising activities; so the prohibition against misleading solicitations would also forbid the use of unscrupulous fundraising tactics such as excessive pressure.
- To help assure donors that a charitable gift will result in the promised impact, the Standards state that a charity should have a formal board policy of self-evaluating its effectiveness at least every two years, with a written report on the results provided to the organization’s board of directors.
- Many of the Standards stress that adequate governance and management practices are essential to ensure charity integrity and effectiveness. BBB Standards can be viewed online: http://www.bbb.org/us/Standards-Charity or complete details on how the Standards are applied in BBB charity reviews, please visit Implementation Guide to the BBB Standards for Charity Accountability online: www.bbb.org/us/Charity-Evaluation.
Our purpose is to help donors make sound giving decisions, promote ethical practices by soliciting organizations, and provide charities with a means to demonstrate their commitment to accountability. Our objective is to increase public confidence in credible, well-managed charities and help both new and established nonprofits grow stronger.
Our local charity review program supplements the reports on nationally soliciting charitable organizations that are published by the Council of Better Business Bureaus’ Wise Giving Alliance and which have long been available through BBB. The increasing prominence of community based charities has prompted us to extend this service to include reports on local organizations.
Once the online questionnaire (/storage/74/documents/BBB Charity Review Questionnaire.pdf) is completed and requested materials are submitted, all of the items provided will be considered public information and made available, upon request, to inquirers. We believe both the public and soliciting organizations will benefit from voluntary disclosure of an organization’s activities, finances, fund raising practices and governance.