US Giving Alliance Releases Top Reasons Charities Fail to Meet Its Standards

The BBB Wise Giving Alliance has released a list of standards that US charities most commonly fail to meet when being evaluated against its own 20 Standards for Charity Accountability.

The analysis by the Alliance shows that insufficient transparency, inadequate board activity and the lack of assessment of charity effectiveness account for the most failures in compliance.

President and CEO of the BBB Wise Giving Alliance, Art Taylor says the good news is that well over half of the US charities reviewed met all of the BBB charity standards.

Unfortunately, Taylor says it’s evident that many charities have more work to do to satisfy the expectations of donors and disclosure, effective governance and accountability are important indicators of a charity’s commitment to donors and the causes they serve.

The BBB Wise Giving Alliance evaluated charities that provided information during the past two years and found that more than 56 percent met all 20 Standards for Charity Accountability. Charities in the remaining 44 percent did not meet one or more of the standards.

The following are the most frequent deficiencies that were found:

Annual Reports
BBB Standard: Have an annual report available to all, on request, that includes recommended program, governance and financial disclosures. 40 percent of charities that did not meet one or more standards either did not produce an annual report or provided one that that did not include all of the recommended information.

Effectiveness Policy

BBB Standard: Have a board policy of assessing, no less than every two years, the organization’s performance and effectiveness and of determining future actions required to achieve its mission. 36 percent of charities that did not meet one or more standards lacked the recommended board policy for periodic self-assessment.

Effectiveness Report

BBB Standard: Submit to the organization’s governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future action. 35 percent of charities that did not meet one or more standards either had not completed an effectiveness assessment or did not provide its board with a written report on the results of the assessment.

Board Meetings

BBB Standard: A minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face to face participation. (One of these meetings can be a conference call of the full board.) 31 percent of charities that did not meet one or more standards had charity boards that met less than three times per year or lacked a majority attendance.

Web site Disclosures

BBB Standard: Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990. 31 percent of charities that did not meet one or more standards had websites that did not include access (such as a link) to the group’s most recent IRS Form 990 and/or did not include other recommended information.

The BBB Standards for Charity Accountability can be downloaded at www.bbb.org/charity 

BBB Wise Giving Alliance is an affiliate of the US Council of Better Business Bureaus.