The Better Business Bureau doesn’t just rate businesses. It also evaluates charities through its Wise Giving Alliance (BBB WGA). Results are published on its Give.org website.
The program is voluntary, but rigorous. The process can require a charity to answer more than 250 questions that include not just its finances, but also how it is governed and how it raises money.
Now, in an effort to pressure reluctant organizations to participate, the BBB WGA has issued a list of what it calls the “Top 10 Transparency Dodgers.”
In its news release, it says the 10 charities on the list are the largest in the U.S. (ranked by Fiscal 2014 total contributions) that did not disclose any of the requested information needed to verify the charity’s trustworthiness.
The release goes on to say: “A charity’s failure to disclose important information relevant to BBB WGA evaluation should be a red flag for donors, and the BBB WGA urges donors to avoid charities that dodge transparency.”
The 10 charities on the list include well-known and highly-respected organizations:
1. Dana-Farber Cancer Institute
2. Fred Hutchinson Cancer Research Center
3. Teach For America
4. NeighborWorks America
5. John F. Kennedy Center for the Performing Arts
6. National Fish and Wildlife Foundation
7. City Year
8. United States Holocaust Memorial Museum
10. Local Initiatives Support Corporation
“Transparency is the mark of a well-run charity,” Art Taylor, President and CEO of BBB WGA said in the news release. “Failure to disclose important operations information demonstrates a complete disregard to the importance of trust.”
In an interview with NBC News, Taylor significantly softened his tone.
“They may have their own reasons for not wanting to give us information or it may be that our organization is not on their radar screen,” he said. “To take the high road, it may be something we did, but I would love to have these organizations explain to us and the public why they choose not to disclose information when the vast majority do.”
So then, why did the BBB WGA decide to point a finger at these charities? Taylor told NBC News it’s because people had asked them for information about them.
“Since people asked us about them, we thought it would be important that they knew that they refused to give us the information that we need to do this evaluation,” he said. “We’re scratching our heads here trying to figure out what it will take to get them to give us the information we need. Cleary, they have the resources to do it.”
When asked if he was trying to shame these charities into taking part in the BBB WGA’s voluntary evaluation program, Taylor said they were trying to “encourage” them through public exposure.
“We don’t know if they’re good or bad,” he said. “We don’t know anything about them because we don’t have the information we need.”
The charities on the list respond
NBC News contacted all 10 organizations and received a written response from each of them.
“We always welcome outside review and pride ourselves on transparency and full disclosure, as required by law and our congressional charter,” wrote Jeff Trandahl, executive director of the National Fish and Wildlife Foundation. “This appears to be more of a media stunt than an effort to gain information.”
City Year said it takes “great pride in its organizational transparency, financial stewardship and record of providing timely, clear and accurate financial information.”
Bennett Weiner, COO of the BBB Wise Giving Alliance said each charity was sent three letters in a two-month period, the last one sent certified mail, requesting information. Weiner told NBC News, they also received an additional communication in July 2016 “informing them of our intent to do a press release and welcoming them to enroll if they wanted to avoid being on this list.”
Dana-Faber Cancer Institute, Fred Hutchinson Cancer Research Center and the United States Holocaust Memorial Museum said they chose not to participate because they make information easily available to potential donors and are already evaluated by other reputable organizations, such as Charity Navigator.
The Holocaust Memorial Museum told NBC News it had provided information to the Wise Giving Alliance in the past, but decided not to continue participating because the BBB does not recognize that the museum is a public-private partnership that receives federal funds and has a 55-member presidentially appointed board.
Local Initiatives Support Corporation said the BBB program “did not add any value” for the organization because less than one percent of its contributions come from individuals. “It is unfortunate that BBB WGA chose this strategy to try to force reputable organizations to participate in its service,” a spokesperson for the organization wrote.
All 10 groups stressed that they were committed to complete transparency about their finances and operations and inform their supporters about their work on how contributions are used in a variety of ways.
“Transparency in all forms is always of foremost concern to Dana-Faber Cancer Institute and to our donors,” wrote Ellen Berlin, the institute’s director of media relations. “Dana-Farber is currently reviewed by the IRS, Attorney General’s Office, and other regulatory bodies, and we go above and beyond to comply with all of their requirements so that we can be transparent to all.”
Most of the charities on the BBB non-disclosure list have been rated by Charity Navigator, a highly-respected charity evaluator. Dana-Faber, Teach For America, The Kennedy Center, National Fish and Wildlife Foundation and City Year earned the highest rating, four out of four stars. The Holocaust Memorial Museum and Local Initiatives Support Corporation rated three stars. NeighborWorks America and Pact are not yet rated, and Fred Hutchinson is not eligible for rating because it does not depend on support from individual contributors and foundations.
How the Wise Giving Alliance differs from other charity evaluators
The BBB Wise Giving Alliance evaluates about 1,500 charities that solicit nationally. Give.org also includes another 11,000 reports on regional charities from local BBBs across the country.
The BBB is not the only charity watchdog. But the others, such as Charity Navigator, Charity Watch, and GuideStar, use publicly available information, such as IRS Form 990, the annual report, and in some cases, audited financial statements.
The Wise Giving Alliance requires charities to provide information and it judges each group on 20 standards that deal with governance and oversight, effectiveness of achieving its mission, finances, and fundraising solicitations and informational materials.
It’s the organization’s position that tax forms and annual reports are not sufficient for them to conduct their review. For example, they review fundraising solicitations to make sure they are truthful and not misleading.
“Our standards cover many areas beyond just financial information that are not addressed in these public documents,” BBB WGA CEO Bennett Weiner said.
Taking part in the program is free. If the organization meets all of the standards it will be identified as a BBB Accredited Charity. These charities then have the option of licensing the BBB Accredited Charity Seal logo – for a fee – to use in advertising and promotion. About 65 percent of the charities that meet the standards choose to license the seal, Weiner said.
While the Better Business Bureau may believe it is doing the right thing by pointing a finger at these 10 large charities, some question the bureau’s motives.
In reporting this story, the Nonprofit Quarterly criticized the BBB WGA for “promoting a sensational approach to nonprofit accountability based upon an organization’s responsiveness to a single private organization seeking voluntary information.”
Kelly O’Brien, vice president and director of development at the Fred Hutchinson Cancer Research Center said the BBB WGA press release “appears to be a provocative mechanism to garner headlines by targeting some of the nation’s longstanding philanthropic and mission-driven organizations.”
In an email to NBC News, O’Brien wrote: “It is disappointing that an organization well known as a resource for consumers would shed a negative light on causes as diverse as cancer research and care, education, arts and culture, and volunteerism.”
While acknowledging that independent assessments of charities are important resources, O’Brien asserted that the very best way for a donor to understand the use and impact of their gift to an organization is to engage directly with the causes they support.