BBB Wise Giving Alliance Standards address charity finances, board responsibility and the need to honor donor intentions among other issues

Arlington, VA, January 22, 2002 -- The BBB Wise Giving Alliance (Alliance) today released an exposure draft of its Standards for Charity Accountability. The draft, which is a culmination of two years of deliberations, addresses long standing accountability concerns such as charity use of funds and fund raising practices, as well as emerging concerns including donor privacy, charity website disclosures and the importance of spending funds in accordance with donor intentions. For the first time, the standards also recommend that charities institute an effectiveness measure to assess their performance. Following the 120-day public comment period, the Alliance will consider commentary received with the goal of finalizing the standards mid-2002.

These standards replace the separate standards of the National Charities Information Bureau (NCIB) and the Council of Better Business Bureaus' Foundation and its Philanthropic Advisory Service (PAS) that were in place when the organizations merged last year. The mission of the merged organization, the BBB Wise Giving Alliance, is to assist donors in making knowledgeable giving decisions.

The proposed Standards for Charity Accountability were developed with professional and technical assistance from representatives of small and large charitable organizations, the accounting profession, grant making foundations, corporate foundation officers, regulatory agencies, research organizations and the Better Business Bureau system. The BBB Wise Giving Alliance also commissioned independent research on donor expectations to ensure that the views of the general public were reflected in the standards.

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

"These standards go the heart of improving charity accountability. We focused on areas of particular concern to donors. The standards retain the best elements of the previous ones of NCIB and PAS and also introduce new issues such as donor privacy and effectiveness. Although these are stronger standards than were issued previously, we expect that most charities will be able to meet them without undue burden" said Art Taylor, president of the BBB Wise Giving Alliance.

Current Alliance Chair and former NCIB Chair George Penick, President of the Foundation for the Mid South, hailed the standards as the embodiment of the merger, noting "now there is a single set of standards for donors and charities to look to for setting the accountability bar. These standards are the strong foundation on which the Alliance will build all of its future programs."

Peter Shiras, Alliance Board member and senior vice president, Independent Sector, noted the importance of the standards to the nonprofit sector. "At this crucial time after September 11, when the public is more concerned than ever about charitable accountability, the proposed standards of the BBB Wise Giving Alliance will help strengthen public trust in the work of charitable organizations."

Like the previous standards of the merger partners, the draft standards address a broad range of critical accountability issues. In the use of funds area, where donors have expressed high expectations, the draft standards call for a minimum of 65% of total expenses to be spent on the charity's programs. "How a charity allocates and spends its money is important, but it is only one gauge of overall accountability. Our research confirms that the public is concerned about a broader range of issues and we developed the standards accordingly." Taylor said.

Marc Owens, also an Alliance board member and an attorney with Caplin & Drysdale in Washington, DC and former director of the IRS Exempt Organizations Division from 1990 - 2000, confirmed the comprehensiveness of the proposed standards. "Over the years, I have seen quite a broad range of problems regarding the accountability of charitable organizations. These proposed new charity standards comprehensively address both existing and emerging ethical issues facing charities today."

"Even before we began drafting, we sought input from the organizations most directly affected by the standards. Our outreach to the charity community included in-person meetings with charities, large and small, distribution of a "discussion document" at charity conferences and seminars, and establishment of a comment page on the Alliance website. The comments provided to us by these constituents were key parts of our deliberations" Taylor noted.

John H. Graham IV, CEO of the American Diabetes Association and member of the Standards Review Panel, believes that the proposed standards will serve as a valuable guide for charitable organizations. "Large, national charities should recognize the importance of going beyond what the law requires for charity accountability. The proposed BBB Wise Giving Alliance standards set the standards for us to follow," Graham said.

Panel member Julia Erickson, Executive Director of City Harvest in New York City, agreed, calling the proposed standards "useful guides to help charities both large and small become more professional and accountable to donors and the public at large."

The proposed BBB Wise Giving Alliance Standards for Charity Accountability will serve as the basis for national charity reports produced by the Alliance, as well as for local Better Business Bureaus n their reporting on community-based charities.

"It is hoped that the new generation of standards will boost BBB review of local charitable organizations and enhance the value and number of charity reports at both the local and national level," said Ronna Brown, co-chair of the Standards Review Panel, and president and CEO of the Better Business Bureau of Metropolitan New York.

A copy of the proposed new BBB Wise Giving Alliance standards is posted on the www.give.org web site. A link to a special Internet comment form can be found at the end of the document. The 120-day comment period will conclude on May 15, 2002.