The Better Business Bureau (BBB) Wise Giving Alliance has established a set of Charity Standards to guide donors in evaluating potential organizations to which the donor is considering making a donation. See http://give.org for more information.
The Board and Staff have adopted these standards as "best practices" with which to serve the public in fulfilling our mission. We have paraphrased the standards below in bold type and placed our implementation of our practices that meet the letter or spirit of the standard.
1.A board of directors that provides adequate oversight of the charity’s operations and its staff.
Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO’s performance, evidence of disbursement controls such as board approval of the budget and fund raising practices, establishment of a conflict of interest policy and establishment of accounting procedures sufficient to safeguard charity finances.
2.A board of directors with a minimum of five voting members.
Our Board has seven voting members.
3. A minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.
Per our Bylaws, our Board meets at least quarterly but the Chairperson or any two directors can call a special meeting.
4.Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board’s chair or treasurer.
None of our Board members is compensated. The Bylaws provide that should a Board member choose to accept a paid position with the organization, he/she must resign from the Board.
5. No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation.
Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm’s length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.
Our Board has implemented a conflict of interest policy.
6.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.
Our Board has a policy to assess organizational performance annually.
7. 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 actions.
This standard is somewhat confusing - the Board IS the govening body. The Executive Director delivers a report to the Board at each Board meeting and a written report at the end of each fiscal year.
8.Spend at least 65% of its total expenses on program activities.
We expect to do much better than this and it will be reflected in our publicly available financial statements each year.
9.Spend no more than 35% of related contributions on fund raising. Related contributions include donations, legacies and other gifts received as a result of fund raising efforts.
We expect to do much better than this and it will be reflected in our publicly available financial statements each year.
10. Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity’s unrestricted net assets available for use should not be more than three times the size of the past year’s expenses or three times the size of the current year’s budget, whichever is higher.
We expect to do much better than this and it will be reflected in our publicly available financial statements each year.
An organization that does not meet Standards 8, 9 and/or 10 may provide evidence to demonstrate that its use of funds is reasonable. The higher fund raising and administrative costs of a newly created organization, donor restrictions on the use of funds, exceptional bequests, a stigma associated with a cause and environmental or political events beyond an organization’s control are among factors which may result in expenditures that are reasonable although they do not meet the financial measures cited in these standards.
11.Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles.
When total annual gross income exceeds $250,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $250,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $100,000, an internally produced, complete financial statement is sufficient to meet this standard.
For the foreseeable future, we do not anticipate annual gross income to exceed $100,000. At present (July 2006) there is only one paid staff member - the Executive Director who maintains the books of account. To provide routine oversight, the bank statements are sent to the Chair of the audit committee who reviews paid checks and charges for unusual activity before passing the statements on to the Executive Director for reconciliation. A member of the audit committee signs the contract payment checks for the Executive Director. It is Board policy that at least one member be trained in understanding financial statements (as of this writing, one member is a CPA).
12. Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising and administrative activities.
If the charity has more than one major program category, the schedule should provide a breakdown for each category.
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13. Accurately report the charity’s expenses, including any joint cost allocations, in its financial statements.
For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.
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14. Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising and administration.
Our board does not approve the annual budget. Rather it requires that the Executive Director use proper techniques in constructing the budget and reviews those techniques.
15.Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part.
Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard.
A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed or implied in the charity’s solicitations.
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16.Have an annual report available to all, on request, that includes:
(a) the organization’s mission statement,
(b) a summary of the past year’s program service accomplishments,
(c) a roster of the officers and members of the board of directors,
(d) financial information that includes:
(i) total income in the past fiscal year,
(ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and
(iii)ending net assets.
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17. 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.
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18.Address privacy concerns of donors by
(a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, and
(b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors
(i) what information, if any, is being collected about them by the charity and how this information will be used,
(ii) how to contact the charity to review personal information collected and request corrections,
(iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and
(iv) what security measures the charity has in place to protect personal information.
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19. Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation:
(a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold),
(b) the duration of the campaign (e.g., the month of October),
(c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).
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20.Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.