In last week’s column, I reported that United Way of Chatham-Kent had recently met all 20 of the Better Business Bureau’s Standards for Charity Accountability – developed to assist donors in making sound giving decisions and to foster public confidence in charitable organizations.
The first seven standards within governance and oversight and measuring effectiveness were previously outlined; here are the remaining 13 standards.
This section of the standards seeks to ensure that the charity spends its funds honestly, prudently and in accordance with statements made in fund-raising appeals. To meet these standards, the charitable organization shall:
- Spend at least 65% of its total expenses on program activities.
- Spend no more than 35% of related contributions on fund raising. Related contributions include donations, legacies and other gifts received as a result of fund raising efforts.
- Avoid accumulating funds that could be used for current program activities. To meet this standard the charity’s unrestricted net assets available for use should not be more than three times the size of the past year’s expenses or three times the size of the current year’s budget, whichever is higher.
- Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total gross income exceeds $250,000, these statements should be audited in accordance with generally accepted auditing standards.
- Include in the financial statements a breakdown of expenses that shows what portion of these expenses was allocated to program, fund-raising and administrative activities.
- Accurately report the charity’s expenses, including any joint cost allocations, in its financial statements.
- Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising and administration.
Fundraising and informational materials
A fundraising appeal is often the only contact a donor has with a charity and may be the sole impetus for giving. This section of the standards seeks to ensure that a charity’s representations to the public are accurate, complete and respectful. To meet these standards, the charitable organization shall:
- Have solicitations and informational materials, distributed by any means that is accurate, truthful, and not misleading, both in whole and in part.
- Have an annual report available to all, on request, that includes the organization’s mission statement, a summary of the past year’s program service accomplishments, a roster of the offices and members of the board of directors, and financial information that includes total income in the past fiscal year, expenses in the same program, fund raising and administrative categories as in the financial statements and ending net assets.
- Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent Revenue Canada return.
- Address privacy concerns of donors.
- Clearly disclose how the charity benefits from the sale of products or services that state or imply that a charity will benefit from a consumer sale or transaction.
- Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy violations and/or other issues.
These Standards for Charity Accountability have been reprinted – in summary form – with the permission of the BBB Wise Giving Alliance and the Better Business Bureau of Western Ontario. The latter organization serves Chatham-Kent, Elgin, Essex, Huron, Middlesex, Norfolk, Oxford and Perth Counties.
For more information about United Way of Chatham-Kent – or to review our Annual Report to the Community and/or Audited Financial Statements, please link to www.uwock.ca
Karen Kirkwood-Whyte, CEO
United Way of Chatham-Kent