Better Business Bureau Standards for
Charity Accountability
1. A board of directors that
provides adequate oversight of the
charity's operations and its staff.
2. A board of directors with a
minimum of five 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.
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.
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.
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.
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.
8. Spend at least 65% of its total
expenses on program activities.
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.
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.
11. Make available to all, on
request, complete annual financial
statements prepared in accordance
with generally accepted accounting
principles.
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.
13. Accurately report the charity's
expenses, including any joint cost
allocations, in its financial
statements.
14. Have a board-approved annual
budget for its current fiscal year,
outlining projected expenses for
major program activities, fund
raising, and administration.
15. Have solicitations and
informational materials, distributed
by any means, that are accurate,
truthful and not misleading, both in
whole and in part.
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.
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.
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.
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).
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.
Copyright 2003, CBBB.