It’s not surprising that as fur traders were navigating the rugged Idaho terrain and rivers to turn a profit, early missionaries were at work for the common good establishing a school, printing the first book, building an irrigation system and even growing the first potatoes.
Mission-based work is and has always been vital to our nation’s prosperity. Today, a charity somewhere is working to address virtually every challenge or inequity we face. These organizations, large and small, exist because we enable them through our donations of cash, products and time. Our state and federal governments subsidize them with tax exemptions. We give because we hope and believe they will succeed in lessening misery, sharing helpful information or creating opportunity where the marketplace cannot. In short, we trust that they will deliver best efforts to solve problems.
But as we know from experience, charities can vary widely in their trustworthiness. Most diligently operate programs that align with their missions. Their resources, tangible and intangible, are devoted to their cause. On the other hand, some poorly managed charities have lower prospects of achieving anything worthwhile. Worse yet are a rare few, run by unscrupulous people, who use the name of charity to bilk donors out of their money.
Recently, 50 states and the District of Columbia along with the Federal Trade Commission joined in an action against four related charities charging them with defrauding donors of more than $187 million. What was striking about these organizations is that with a little effort, donors could have known enough to steer clear of them.
The BBB Wise Giving Alliance (BBB WGA), the charity reporting arm of the BBB, had long reported that three of these charities failed to provide, after repeated requests, any of the basic information needed to complete a rigorous evaluation of the charity’s trustworthiness. Donors going to the website www.give.org or checking the evaluation conclusion in the Wise Giving publication would have seen a red exclamation point warning them about these charities. The fourth charity did provide information but failed accreditation because it did not meet several of the 20 standards BBB WGA uses to assess charity trustworthiness.
The first step toward trustworthiness is transparency — disclosing information about programs, finances, fundraising programs and governance practices willingly when requested to do so. While the vast majority of charities do this, far too many do not. These organizations and the people running them are not invested in helping donors make informed giving decisions. They expect, like the charities cited in the fraud action, that donors will assume they are trustworthy. They are able to take advantage knowing that few people will do any research before giving. A study by Hope Consulting emphasized this fact noting that only 30 percent of people do any research before giving. And of those who do, their research is limited to asking a friend or family member about the charity. This must stop. Donors to charities should feel obliged to do a reasonable amount of investigation before giving to a charity.
This is a problem not only for donors but for charities too. Deserving charities that are disclosing information should be garnering support that goes to charities acting as though they have something to hide.
America is the greatest nation on earth because we have the greatest charities willing to take on tough problems —just like the missionaries who helped settle Idaho. While they work to better our communities, it is critical that we have reasons to trust they are giving best efforts. We can only know if we have the information and use it.
H. Art Taylor is president and CEO of BBB Wise Giving Alliance in Arlington, Va. He and Atul Tandon, founder and CEO of the Tandon Institute, will be keynote speakers at the annual conference of the Idaho Nonprofit Center, Sept. 15-16 in Boise.