NYPAS to Consider Impact of Recession in Applying BBB’s Fundraising and Program Ratios to Charity Reviews
New York, NY – December 4, 2009 ― Effective immediately, the BBB Education and Research Foundation in Metropolitan New York announced that it would adopt the national BBB Wise Giving Alliance (WGA) updated procedures for implementation of the BBB Standards for Charity Accountability. Moving forward, the Foundation’s New York Philanthropic Advisory Service (NYPAS) will consider the recession’s impact, when evaluating charities’ fundraising and program expense ratios.
“Good charities are struggling to make ends meet. We will take this into account when we review charities against our Standards now,” said Claire Rosenzweig, President and CEO of the Foundation.
NYPAS evaluates more than 850 Metro New York area charities against the BBB’s 20 Standards for Charity Accountability that address charity governance, finances, effectiveness, fund raising practices and donor privacy. Two of the current standards require that a charity spend at least 65 percent of its total expenses on program activities and spend no more than 35 percent of related contributions on fundraising.
Many charities are facing steep declines in donations. As a result, their spending ratios might fall below the required standards until the overall health of the economy improves.
For charity reviews based on fiscal years ending in 2008 through June 2010, NYPAS will exercise the flexibility permitted under existing BBB guidelines to allow charities up to a 10 percent deviation for Standards 8 and 9, which use ratios. To be eligible, charities should have met the standards in at least two years just prior to 2008, and should be able to show that they could not meet them in later years, due to the impact of the recession. NYPAS will publish an updated implementation guide for the Standards in the near future, when it is made available nationally by WGA.
“BBB charity reviews guide donors to trustworthy charities,” said Ms. Rosenzweig. “By taking this action, we aim to ensure that our reviews will help donors recognize the economic conditions that are affecting nonprofits right now.”
About the Education and Research Foundation of the BBB of Metropolitan New York
The BBB Foundation is a 501(c)(3) nonprofit organization established in 1969 to promote accountability for local charities, establish confidence in the sector, and encourage charitable giving in New York. It achieves these goals by producing reliable and easy-to-read reviews of over 850 New York area charities, published in its online New York Giving Guide at www.newyork.bbb.org. The BBB Foundation also informs the public about wise giving practices, urges potential donors to give generously, and works with charities to help them meet and maintain high ethical standards. Charities that meet all of the BBB’s 20 Standards for Charity Accountability are eligible to participate in its BBB Accredited Charity Seal program. The Standards include provisions requiring that charities regularly assess their effectiveness and report on the results of the evaluations to their boards of directors. The BBB’s Charity Seal is a quick-check, easy way for donors to recognize charities that meet the BBB’s high standards.