Large national charities that solicit donations from the public could earn a Better Business Bureau endorsement under a program announced yesterday. The new plan would bestow a seal of approval on nonprofits that meet a series of stiff standards.
Under the program by the BBB's Wise Giving Alliance, a watchdog group based in Arlington County, nonprofits that meet the alliance's standards could display a "Wise Giving Seal" on their fundraising material and ads.
Officials said yesterday that the program is designed to help donors better assess the nation's 1 million nonprofits when deciding where to send contributions.
In a 2001 opinion poll commissioned by the Wise Giving Alliance, 70 percent of respondents said they had difficulty telling whether charities soliciting their contributions were legitimate. Only a handful of oversight groups and state regulators offer independent oversight of the burgeoning nonprofit sector.
"Many Americans are savvy shoppers," Ken Hunter, chief executive officer of the Council of Better Business Bureaus, said at a news conference yesterday introducing the program. "They ask very good questions before they make their purchases. But the same savvy shoppers consider it rude to ask discerning questions concerning charities. We need to get over that."
The Wise Giving Alliance already evaluates hundreds of charities and posts the results on its Web site, give.org, using standards that stipulate everything from how organizations may solicit donations, the number of board meetings they must hold and what information should be included in annual reports.
In a revamping of this program also announced yesterday, the alliance added guidelines for charities that solicit on the Internet, and a stipulation that donors be allowed to opt out of receiving additional solicitations from a charity.
One of the most hotly debated new standards is a requirement that organizations spend no more than 35 percent of donations on fundraising. Some charities had wanted that raised to 40 percent or even 50 percent, but the alliance's chief operating officer, Bennett Weiner, said the poll data showed that most respondents favored a lower number.
"Clearly, we heard that message," Weiner said.
The alliance's seal-of-approval project is similar to the Maryland Association of Nonprofits' Standards for Excellence program, which has received wide attention nationally among nonprofit associations.
So far, 30 nonprofits have been "certified" under the Maryland program, program director Amy Coates Madsen said.
Large national charities that meet all of the Wise Giving Alliance's standards may apply for the seal, alliance officials said. The organization does not evaluate local groups.
Yesterday, some of the largest nonprofits in the country, as well as Independent Sector, a trade group of foundations and nonprofit groups, lined up to support the plan.
"This new seal is, quite simply, 'credibility insurance' for America's charities," said M. Cass Wheeler, the American Heart Association's chief executive.
However, Daniel Borochoff, who runs a smaller charity watchdog, the Chicago-based American Institute of Philanthropy, questioned the group's plan to charge organizations that apply for the Wise Giving Alliance's seal. Under a preliminary plan, charities would be charged $1,000 to $15,000, depending on their size.
"If they're paying a fee to the group that's going to evaluate them, then that could be a conflict," Borochoff said. The Wise Giving Alliance, he said, "could be tempted to more favorably evaluate the charity paying the fee. It's unfortunate that [the alliance] couldn't get some more independent company or foundation or individual to pay for the program. I'm disappointed."
However, alliance officials said they expect the seal program's application fees to cover only a third of the program's cost, and they plan to seek public donations and foundation grants for the rest.