DONORS EXPECT CHARITIES TO ADHERE
TO ETHICAL STANDARDS

But Are Unsure How to Assess Accountability or Legitimacy

Almost half of those surveyed believe charities do not
divulge enough information to donors

Arlington, VA, October 17, 2001-- Americans are eager to contribute to charities, but a new national survey shows a major disconnect between the public's high expectations for ethics and accountability by charities and their frustration at not being able to find the necessary information to make their decisions about giving.

The survey of 2,003 adult Americans conducted by Princeton Survey Research Associates in spring of 2001 reveals that many Americans have trouble finding the information they need to evaluate charities and make decisions about giving. Less than half (49%) say it is easy to find the information they seek. And, while people's main source of information is the charities themselves, only half (50%) of those surveyed credit charities with making the appropriate information available.

The research was funded by grants from the Charles Stewart Mott Foundation, the Surdna Foundation and Sony Corporation of America.

"Donors most definitely want to hold charities accountable for their use of funds, but the inability to access information often stands in their way," said Art Taylor, president and CEO of the BBB Wise Giving Alliance (the Alliance), the organization that sponsored the survey. "Most people (70%) say it is difficult to tell whether a charity soliciting their contribution is legitimate, and many (72%) also say it is difficult to choose between organizations that raise money for similar causes."

These difficulties were dramatically highlighted in the past month as Americans attempted to respond to the needs of those impacted by the September 11th terrorist attacks. A high volume of inquiries to the Alliance substantiated the eagerness of donors to give, and gave voice to widespread questions about how to evaluate the accuracy of the charity appeals/promotions and the effectiveness of the many disaster relief programs.

"As the survey shows, charitable giving is almost a universal experience in this country. People want to assist those in need. Close to nine in 10 U.S. adults (86%) report having contributed money or property to charities during the past year. Moreover, public trust in charities today is stable, an improvement from the declining confidence that characterized the public mood in the early 1990s," Taylor said.

The implications for the charitable community are to find cost-effective ways to address the information needs and accountability concerns of donors.

"The survey findings not only confirm the public's interest in many long established issues, such as how much charities spend on programs and fund raising, but they also identify emerging areas such as privacy, online giving and effectiveness measurements," said Taylor, head of the BBB Wise Giving Alliance. "The Alliance will use the findings to improve the quality of information and services that we provide to donors in our role as a charity reporting organization."

The survey was conducted in the spring of 2001 to determine donor expectations regarding charity use of funds and other practices by nonprofit organizations. The research was carried out as part of a comprehensive revision to the BBB Wise Giving Alliance's Charity Standards, which form the basis for the Alliance reports on individual national charities.

Among the notable findings of the survey:

• Many, if not most, Americans have trouble finding the information they need to evaluate charities and make decisions about giving. Seven in 10 adults (70%) say it is difficult to know whether or not a charity asking for their support is legitimate. · First and foremost on the donors' list of desired information is to know how a charity spends their money. To help decide whether a charity deserves their support, more than three-fourths (79%) of Americans say it is very important to know the percentage of spending that goes toward charitable programs.

• While finances matter most, the public's appetite for information about charities doesn't stop there. When people are asked to weigh the importance of many different kinds of information in their giving decision, two areas rate almost as important as charity finances - the clarity and specificity of a charity's advertising and promotion (73% rate this very important) and the effectiveness of a charity's programs (70% very important.) Two thirds (67%) of adults would not want an independent charity watchdog that monitors charities to focus exclusively on charity finances, but instead want it also to report on many other aspects of charity operations.

• The public wants charities to observe strict standards for their use of donated funds. When asked how much of a charity's expenditures should go toward programs as opposed to administrative and fundraising costs, over three-fourths (78%) think the percent of spending dedicated to programs should be set at 70 percent or higher. Over half of adult Americans (56%) define the acceptable level as 80 percent or higher.

• The Internet is having a much bigger impact with the public today as a tool for gathering information about charities, than as a means to make a donation. While over half (56%) of regular online users are very likely to go to a charity's web site for financial information if they are considering making a contribution, less that one in 10 (6%) of Americans report having ever made a charitable contribution of $10 or more online. In a country where about six in 10 (61%) adults access the Internet, World Wide Web, or commercial online services at least once a month, only around two in 10 (22%) adults say they would consider making an online contribution in the future.

• Americans overwhelmingly feel that charities have a responsibility to respect and protect donors' personal privacy. Almost nine Americans in 10 (85%) think it is not okay for a charity to raise money by sharing donors' names and addresses with others. Eighty-two percent (82%) of adults say charities should always give donors the option of taking their name off any list that might be shared with an outside organization.

• Donors expect their money to be used for current programs. Sixty-three percent (63%) of Americans expect that when they donate money to a charitable organization, the bulk of their contribution will go toward current programs, rather than be put in reserve.

The full text of the Donor Expectations Survey is posted on the BBB Wise Giving Alliance website: www.give.org. Individual copies are also available on request by writing to the BBB Wise Giving Alliance, 4200 Wilson Blvd., Suite 800, Arlington, VA. 22203.