A national watchdog for charitable organizations has set some new standards to hold these groups accountable to their donors.
The new “seal of approval” from the Better Business Bureau’s Wise Giving Alliance will help donors decide which organizations should get their money, according to CBSNEWS.com.
Among the various standards set by the WGA is a stipulation that requires charities to funnel at least 65 percent of funds back into programs. The current standard, CBSNEWS.com reported, is 60 percent. These new standards require charities to use no more than 35 percent of donations for fundraising and administration.
“Our standards address newly-emerging issues of relevance to potential donors, such as privacy protection, charity effectiveness and Internet appeals, while also updating our approach to long-standing accountability concerns, like charity use of funds and fund-raising practices,” Art Taylor, president and CEO of the WGA, said in a release on Give.org, the organization’s Web site.
Americans tend to be smart shoppers but are miserable at making smart charity decisions, Ken Hunter, president of the Council of Better Business Bureaus, told Associated Press.
“They ask very good questions before they make their purchases, but the same savvy shoppers consider it rude to ask discerning questions concerning charities,” Hunter said. “We need to get over that to be successful.”
Charities interested in getting the new Wise Giving Seal must submit to regular performance evaluations; disclose specific information on their Web sites, including program summaries, a list of boards of directors and financial summaries; provide Internet access to their federal tax forms; and guarantee donor privacy.
Organizations that meet the WGA standards must pay a fee ranging from $1,000 to $15,000, depending on the group’s revenue, AP reported. The first seals will be issued this summer.
Daniel Borochoff, president of another watchdog group, the American Institute of Philanthropy, questioned the effectiveness of the fees.
“You can see how many people would think this could water down the standards,” Borochoff, whose group gives A-through-F grades to about 450 charities and allows the groups to advertise its grade for free, told AP.
The WGA told AP that the fees are necessary to cover administrative costs.
Jodi Mathews is BCE’s communications director.