Wise Giving Wednesday: Building Trust Part 1

Governance - Board Oversight Responsibilities & Board Size

The BBB Wise Giving Alliance standards are based on the idea that identifying trustworthy charities  depends on much more than how much money they raise or spend. Behind-the-scenes operations are important in ensuring a charity is well-run. That’s why one section of the BBB Standards for Charity Accountability closely looks at the board of directors and its practices. Our standards are designed to ensure that a charity’s board is structured so that it can provide proper governance and oversight of the administration, fundraising and programs of a charity.

Poor governance and oversight often point to problems in other areas, which is why you can be sure that charities that meet these standards (i.e., BBB Accredited Charities) are likely to be well-run. BBB Charity Standard #1 calls for an active and involved governing board that provides critical oversight of the charity’s operations and staff. For example, the board is responsible for reviewing the CEO’s performance, receiving the financial statements and approving budgets, approving a conflict of interest policy and reviewing adherence, and ensuring all fundraising agreements are clearly understood and monitored. In a future blog, we will also discuss the board’s role in receiving periodic reports on how well the charity is progressing toward program goals, outcomes and impact.

It is also essential that the board is structured appropriately, and BBB Charity Standard #2 requires that a charity has at least five voting members. Five is not an ideal number but indicates the minimum acceptable number of voting members to help avoid a concentration of power and encourage a diversity of opinion, skill and talent.  This also is a good example that demonstrates a running theme in our standards.  They are not intended to identify the most ideal circumstances that only a select few can strive to reach, but practical ethical goalposts that charities of all sizes can achieve in carrying out their work.

When you see a BBB Accredited Charity you can be sure that the organization has active and involved leaders who are working to ensure that it furthers its stated mission.  Take a look at our national charity reports to see if your charity of choice meets these important standards.

H. Art Taylor, President & CEO
BBB Wise Giving Alliance