Charity Review

  • Issued: March 2017
  • Expires: March 2019

New Venture Fund

Standards Not Met

  • 5
  • 6
  • 7
  • 14
  • 16
  • 18

202-595-1061

1201 Connecticut Avenue NW, Suite 300
Washington, DC 20036

http://www.newventurefund.org

202-595-1061

1201 Connecticut Avenue NW, Suite 300
Washington, DC 20036

http://www.newventurefund.org

Standards Not Met

This organization does not meet one or more of the 20 Standards for Charity Accountability. Click the conclusions section below for more information.

Standards For Charity Accountability

Governance

  1. Board Oversight

    Oversight of Operations and Staff: Standard 1

    Description
    Organizations shall have 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, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

    The organization meets this standard.

  2. Board Size

    Number of Board Members: Standard 2

    Description
    Soliciting organizations shall have a board of directors with a minimum of five voting members.

    The organization meets this standard.

  3. Board Meetings

    Frequency and Attendance of Board Meetings: Standard 3

    Description
    An organization shall have 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.

    The BBB is unable to verify if this organization meets this standard.

  4. Board Compensation

    Compensated Board Members: Standard 4

    Description
    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.

    The organization meets this standard.

  5. Conflict of Interest

    Conflict of Interest: Standard 5

    Description
    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.

    NVF does not meet this Standard because: 

    • In BBB WGA’s opinion, there is a conflict of interest involving management, administrative and consulting services purchased by the organization from a company for which NVF’s Chair of the Board is the Founder, Principal, and Senior Managing Director and owns more than 35% of the company. According to the organization’s audited finanical statements for the year ended December 31, 2015, the reimbursements and purchase of these services for management, administrative personnel, consulting services totaled $31,342,002. 
     
    In response to this finding, NVF indicated that, in accordance with the organization’s conflict of interest policy:
     
    • "Arabella Advisors, LLC is a philanthropic consulting firm that provides program management, strategy, due diligence, and evaluation services to a broad range of foundations, corporations, and individuals. NVF has a long-standing agreement with Arabella, through which Arabella provides NVF with management support for its projects. This arrangement is covered by an Administrative Services Agreement that is periodically reviewed and approved by the disinterested members of the NVF board after considering comparable data about what other vendors charge for similar services under similar circumstances.  In addition, New Venture Fund does continue to engage in a business relationship with Arabella Advisors despite the existence of a conflict of interest due to [the chairman of the board] having a financial interest in Arabella.  Neither Federal Tax Law governing transactions with related parties nor state law governing conflicts of interest prohibit organization from entering into such transactions.  Rather those legal and regulatory regimes impose specific procedural requirements to ensure that those with fiduciary obligations over the organization are making fully informed decisions in the best interest of the organization and that those relationships are fully disclosed.  NVF works closely with both in-house and outside counsel to observe not only the letter, but also the spirit of those laws.  The organization has and follows a robust conflict of interest policy that is fully consistent with both State and Federal legal requirements."  
    Despite the arms-length measures mentioned by the charity above, BBB WGA considers the relationship a conflict of interest due to the size of the transaction.
     

     

Measuring Effectiveness

  1. Effectiveness Policy

    Board Policy on Effectiveness: Standard 6

    Description
    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.

    NVF does not meet this Standard because:

    • The board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.

  2. Effectiveness Report

    Board Approval of Written Report on Effectiveness: Standard 7

    Description
    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.

    NVF does not meet this Standard because:

    • It has never completed an effectiveness assessment.

Finances

  1. Program Expenses

    Program Service Expense Ratio: Standard 8

    Description
    Spend at least 65% of its total expenses on program activities.

    The organization meets this standard.

  2. Fund Raising Expenses

    Fund Raising Expense Ratio: Standard 9

    Description
    Spending should be 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.

    The organization meets this standard.

  3. Accumulating Funds

    Ending Net Assets: Standard 10

    Description
    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.

    The organization meets this standard.

  4. Audit Report

    Financial Statements: Standard 11

    Description
    Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

    The organization meets this standard.

  5. Detailed Expense Breakdown

    Detailed Functional Breakdown of Expenses: Standard 12

    Description
    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.

    The organization meets this standard.

  6. Accurate Expense Reporting

    Accuracy of Expenses in Financial Statements: Standard 13

    Description
    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.

    The organization meets this standard.

  7. Budget Plan

    Budget: Standard 14

    Description
    Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

    NVF does not meet this Standard because, when the organization provided its 2017 budget, it did not include the following:

    • Total projected program service expenses.
    • Total projected fund raising expenses.
    • Total projected administrative expenses.

    In response to this finding, the charity states:

    “New Venture Fund’s mission is to provide fiscal sponsorship and project hosting support that enable individuals and institutions to achieve their philanthropic goals.  Each year, expenditures on program services, grants, fundraising, and administrative expenses are highly variable and dependent on the projects that we host that year and are often dictated by the terms of the grants we receive.  Accordingly, NVF does not purport to budget how it will spend restricted funds before they are received.  Instead, the budget process focuses on NVF’s unrestricted funds.  This is common among fiscal sponsor organizations and other entities for who restricted funds represent a significant portion of their revenue and expenditures.”  

Fund Raising & Info

  1. Truthful Materials

    Misleading Appeals: Standard 15

    Description
    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.

    The organization meets this standard.

  2. Annual Report

    Annual Report: Standard 16

    Description
    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.

    NVF does not meet this standard because:

    • The organization states it does not have an annual report covering activities conducted in 2015.

  3. Website Disclosures

    Web Site Disclosures: Standard 17

    Description
    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.

    The organization meets this standard.

  4. Donor Privacy

    Privacy for Written Appeals & Internet Privacy: Standard 18

    Description
    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, (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.

    NVF does not meet this Standard because the privacy policy on its website, www.newventurefund.org, does not indicate:

    • How personal identifable information will be used.
    • How to contact the charity to review personal information that is collected and/or request corrections.

    In addition, the project websites for NVF's sponsorees, not all provide access to a privacy policy that includes the recommended information.  

  5. Cause Marketing Disclosures

    Cause Related Marketing: Standard 19

    Description
    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).

    The organization meets this standard.

  6. Complaints

    Complaints: Standard 20

    Description
    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.

    The organization meets this standard.

Conclusion

New Venture Fund does not meet the following 6 Standards for Charity Accountability:

Standard 5 - Conflict of Interest
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.

NVF does not meet this Standard because: 

  • In BBB WGA’s opinion, there is a conflict of interest involving management, administrative and consulting services purchased by the organization from a company for which NVF’s Chair of the Board is the Founder, Principal, and Senior Managing Director and owns more than 35% of the company. According to the organization’s audited finanical statements for the year ended December 31, 2015, the reimbursements and purchase of these services for management, administrative personnel, consulting services totaled $31,342,002. 
 
In response to this finding, NVF indicated that, in accordance with the organization’s conflict of interest policy:
 
  • "Arabella Advisors, LLC is a philanthropic consulting firm that provides program management, strategy, due diligence, and evaluation services to a broad range of foundations, corporations, and individuals. NVF has a long-standing agreement with Arabella, through which Arabella provides NVF with management support for its projects. This arrangement is covered by an Administrative Services Agreement that is periodically reviewed and approved by the disinterested members of the NVF board after considering comparable data about what other vendors charge for similar services under similar circumstances.  In addition, New Venture Fund does continue to engage in a business relationship with Arabella Advisors despite the existence of a conflict of interest due to [the chairman of the board] having a financial interest in Arabella.  Neither Federal Tax Law governing transactions with related parties nor state law governing conflicts of interest prohibit organization from entering into such transactions.  Rather those legal and regulatory regimes impose specific procedural requirements to ensure that those with fiduciary obligations over the organization are making fully informed decisions in the best interest of the organization and that those relationships are fully disclosed.  NVF works closely with both in-house and outside counsel to observe not only the letter, but also the spirit of those laws.  The organization has and follows a robust conflict of interest policy that is fully consistent with both State and Federal legal requirements."  
Despite the arms-length measures mentioned by the charity above, BBB WGA considers the relationship a conflict of interest due to the size of the transaction.
 

 

Standard 6 - Board Policy on Effectiveness
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.

NVF does not meet this Standard because:

  • The board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.

Standard 7 - Board Approval of Written Report on Effectiveness
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.

NVF does not meet this Standard because:

  • It has never completed an effectiveness assessment.

Standard 14 - Budget
Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

NVF does not meet this Standard because, when the organization provided its 2017 budget, it did not include the following:

  • Total projected program service expenses.
  • Total projected fund raising expenses.
  • Total projected administrative expenses.

In response to this finding, the charity states:

“New Venture Fund’s mission is to provide fiscal sponsorship and project hosting support that enable individuals and institutions to achieve their philanthropic goals.  Each year, expenditures on program services, grants, fundraising, and administrative expenses are highly variable and dependent on the projects that we host that year and are often dictated by the terms of the grants we receive.  Accordingly, NVF does not purport to budget how it will spend restricted funds before they are received.  Instead, the budget process focuses on NVF’s unrestricted funds.  This is common among fiscal sponsor organizations and other entities for who restricted funds represent a significant portion of their revenue and expenditures.”  

Standard 16 - Annual Report
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.

NVF does not meet this standard because:

  • The organization states it does not have an annual report covering activities conducted in 2015.

Standard 18 - Privacy for Written Appeals & Internet Privacy
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, (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.

NVF does not meet this Standard because the privacy policy on its website, www.newventurefund.org, does not indicate:

  • How personal identifable information will be used.
  • How to contact the charity to review personal information that is collected and/or request corrections.

In addition, the project websites for NVF's sponsorees, not all provide access to a privacy policy that includes the recommended information.  

The BBB Wise Giving Alliance requested but did not receive complete information from the organization and is unable to verify the organization's compliance with the following Standard(s) for Charity Accountability: 3

New Venture Fund meets the remaining 13 Standards for Charity Accountability.

Purpose

  • Year, State Incorporated

    2006, District of Columbia

  • Affiliates

    Avon Breast Cancer Crusade
    Postsecondary National Policy Institute

  • Stated Purpose

    "to support innovative and effective public interest projects."

Programs

NVF works to achieve a healthier, more equitable world by collaborating with individuals and institutions to provide fiscal sponsorship and project hosting support. Implementation and project management support typically includes: grant-making, policy research, communications and media engagement, and public awareness campaigns. The organization executes donor-driven public interest projects primarily focusing on social and environmental issues. NVF’s portfolio of global development and health projects include: human rights, development aid, family planning, tobacco control, cross-cultural exchanges, sanitation, infectious and easily preventable diseases, coordination of pharmaceutical research, and conflict resolution. The organization’s environmental programs focus on a range of conservation, climate, and energy issues in the U.S. and abroad. NVF operates education-focused projects that support the improvement and development of education in the U.S., such as connected learning, support to teachers and other educational professionals, advocacy for effective teaching practices, early learning in vulnerable populations, literacy, and support for the Common Core Initiative. In addition to the organization’s primary focus areas, NVF operates other projects that include: civic participation, access to healthy foods, reduction of gun violence, the arts, reproductive health, and disaster recovery.

For the year ended December 31, 2015, NVF's program expenses were:

Program services 199,605,469
Total Program Expenses: $199,605,469

Governance & Staff

  • Chief Executive

    Lee Bodner, President

  • Compensation*

    $174,299

  • Chair of the Board

    Eric Kessler

  • Chair's Profession / Business Affiliation

    Principal, Founder, Senior Managing Director, Arabella Advisors

  • Board Size

    7

  • Paid Staff Size

    323

*2016 compensation, as reported by the charity, includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances. Note: According to NVF's 2014 IRS form 990, Karen Nussle, Executive Director, was the highest compensated employee.

Fund Raising

Method(s) Used:

Direct mail, telemarketing, special events, print advertisements, television advertisements, radio appeals, grant proposals, Internet appeals, cause-related marketing, and membership appeals.

Fund raising costs were 1% of related contributions. (Related contributions, which totaled $318,221,455, are donations received as a result of fund raising activities.)

Tax Status

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial

The following information is based on NVF's audited financial statements - consolidated - for the year ended December 31, 2015.

Source of Funds
Contributions and grants 318,221,455
Consulting revenue 1,311,966
Program service revenue 788,683
Investment income 611,754
Other income 96,876
Total Income $321,030,734
  • Programs: 93%
  • Fundraising: 1%
  • Administrative: 6%
Total Income $321,030,734
Program expenses 199,605,469
Fundraising expenses $3,016,461
Administrative expenses $13,278,992
Other expenses $0
Total expenses: $215,900,922
Income in Excess of Expenses 105,129,812
Beginning Net Assets 126,195,682
Ending Net Assets 231,325,494
Total Liabilities 34,649,025
Total Assets 265,974,519

Note: According to NVF's audited financial statements - consolidated - for the year ended December 31, 2015, the organization received in-kind donated legal and consulting services of $907,647.

An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fund raising or promotional purposes.