New York, NY ― August 5, 2010 ― In response to ongoing difficult economic conditions for charities, the New York Philanthropic Advisory Service (NYPAS), a program of the Metro New York BBB’s Education and Research Foundation, is updating its procedure for implementing the BBB Standards for Charity Accountability regarding program and fundraising expense ratios as has the national BBB Wise Giving Alliance (WGA). The WGA and NYPAS previously established a 10% recession “flex” for Standard 8 and Standard 9 through June 2010. Under the new extension, WGA and NYPAS will continue applying the 10% “flex” in those two Standards through December 31, 2010.
“We see that many charities are struggling to remain viable and address increased needs, while funding sources are declining,” said Claire Rosenzweig, President and CEO of Metro New York’s BBB Foundation. “It may be hard for some charities that previously met our Standards to comply with them during these extraordinary times. This is why we extended the time period for the temporary 10% leeway in Standards 8 and 9.”
Standard 8 requires a charity to spend at least 65% of its total expense on program activities and Standard 9 allows no more 35% of related contributions to be spent on fundraising. When reviewing eligible charities, for fiscal years ending in 2008 through December 2010, NYPAS will now allow the overall program expense to be as low as 55% under Standard 8. Under Standard 9, NYPAS will now permit up to 45% of related contributions to be spent on fundraising activity. To be eligible for the “flex” in these two BBB Standards, charities should have met (or have been able to meet) the Standards in a prior review. They must also be able to show that they could not meet BBB Standards 8 and 9 in later years due to the impact of the economic downturn.
The BBB Standards for Charity Accountability may be viewed online at www.bbb.org/us/Charity-Standards. For further information, charities and their advisers may contact the NYPAS Program Manager at nypas@newyork.bbb.org.
About the Education and Research Foundation of the BBB of Metropolitan New York
Metro New York’s BBB Foundation is a 501(c)(3) nonprofit organization established in 1969. It provides educational programs and services for charities, consumers, and businesses; encourages informed consumer support of charities; promotes charity transparency and accountability; conducts research; and provides educational intern opportunities to students who are potential charity and business leaders. It operates the New York Philanthropic Advisory Service (NYPAS), which reviews charities against the 20 BBB Wise Giving Alliance Standards of Charity Accountability and publishes its reviews of over 850 New York area charities at www.newyork.bbb.org. 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 BBB’s Charity Seal is a quick-check, easy way for donors to recognize charities that meet the BBB’s high standards.