A statement used in a charity appeal can be accurate but may still provide a misleading impression to donors. While each appeal aims to make a strong case for support, there are certain phrases and references that cause BBB's Give.org staff members to take notice and question the solicitation. One example is when an appeal contains a promise that the charity will spend 100% of donations on program services.
Charities that make this claim actually do have administrative and fundraising functions. However, they will have made an arrangement whereby funds received from other sources, such as board members, corporations or sponsors, are being directed to pay for the charity’s administrative and fundraising expenses. It's also possible that some of the administrative and fundraising duties are carried out by volunteers. Unfortunately, the applicable explanation may be absent when the 100% claim is used. As a result, contributors may get the mistaken impression that the charity does not have any “overhead."
In other words, this 100% claim in appeals is used to influence a donation by making it appear that the charity has low or no overhead. It also undermines the importance of the need for reasonable overhead spending, perpetuating the "Overhead Myth." BBB Charity Standard 15 calls for solicitations and informational materials, distributed by any means, to be accurate, truthful and not misleading, both in whole and in part. If BBB WGA sees a 100% claim like the one mentioned above, the charity will not meet this standard unless it also includes a prominent explanation near the percentage reference that states how its overhead expenses are covered.
As part of our Building Trust Video series, we are pleased to provide a video that features Michael Roberts, President and CEO, First Nations Development Institute (a BBB Accredited Charity) which works to improve economic conditions for Native Americans through technical assistance and training, advocacy and policy, and direct financial grants.
We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:
Finally, remember to let us know by going to https://www.give.org/ask-us-about-a-charity1/ if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.
H. Art Taylor, President & CEO
BBB Wise Giving Alliance