I find the recent headlines about misuse of charity funds very disheartening. It seems the leaders of a few local charities are taking advantage of the public’s generosity and chose to line their own pockets with funds that could have been spent on the programs and services their organizations, and even their job positions, were created to provide. This impropriety makes it that much more difficult for the many legitimate charities providing great programs in our community to secure funding in this already difficult fundraising climate as donors become more cynical and protective of their dollars.
What’s really troubling about some of these cases is that these charities didn’t have to lose hundreds of thousands of dollars before the abuse was caught. There are so many checks and balances available to catch these types of abuses, but most of them are voluntary; local, state and federal legal requirements are rarely sufficient enough to catch any but the most egregious of abuses.
This is where BBB’s voluntary Standards for Charity Accountability come in: they promote transparency, accountability and ethics in the non-profit community, just as BBB’s Standards for Trust promote transparency, accountability and ethics in the business community.
Going beyond the minimal registration required by the law, BBB’s comprehensive Standards for Charity Accountability examine the board of directors’ involvement in operations, measures taken to prevent conflicts of interest among directors and employees, fundraising and solicitation methods, the amount of expenses devoted to program services and the amount of donated funds spent on fundraising expenses, how charities protect donors’ privacy and more.
Through your BBB’s local Charity Review Program, we hear many charities say that they think the money required for producing audited financial statements prepared by an outside CPA would be better spent providing programs and services to their clientele. However, as recent events have shown, this audit is an important part of a charity’s operations and a worthwhile administrative expense. Financial irregularities, a lack of segregation of duties within an organization and an absence of documentation of expenses can often be caught.
Many charities are concerned about the charity accountability issues that have been in the spotlight recently and seek to distinguish their operations and assure donors they are operating responsibly. BBB Accredited Charities – those that meet all 20 Standards for Charity Accountability – show a commitment to accountability, transparency and ethical practices.
It is important to note that the Standards for Charity Accountability weren’t developed by a “bunch of business people” as some often assume when they hear that BBB runs a charity review program. The BBB Wise Giving Alliance, which runs BBB’s national Charity Review Program in Arlington, Va., worked with representatives of small and large charitable organizations, the accounting profession, grant-making foundations, corporate contribution officers and regulatory agencies and commissioned several independent research studies on donor expectations to ensure that the standards were achievable for a charity of any size and reflected the expectations of the general public.
Because we believe this program provides a valuable service to the non-profit community, both charities and donors, the program costs the charities nothing and the results of charity evaluations are available to the public free-of-charge by calling our local office at 850.429.0002 or going online at www.bbb.org.
The Standards for Charity Accountability help donors make informed giving decisions and are just one more way BBB seeks to fulfill its mission to be the leader in advancing marketplace trust.