Annual Report 2009 - 2010

As of April 2011

The Education and Research Foundation

of The Better Business Bureau of Metropolitan New York, Inc.

30 East 33rd Street, New York, NY 10016 212-533-7500

www.newyork.bbb.org

Promoting charity effectiveness Building ethical business skills

Recognizing high charity standards Providing education on key issues

Metro New York’s

Better Business Bureau Foundation

In 1968, The Education and Research Foundation of the Better Business Bureau of Metropolitan New York (BBB Foundation) was established as a 501(c)(3) nonprofit organization with an independent board of directors. The BBB Foundation collaborates with Metro New York’s BBB to create, fund, and implement special educational programs and investigative projects on consumer and philanthropic issues.

___________________________________________________________________________ BBB Foundation Core Program: NYPAS

New York Philanthropic Advisory Service (NYPAS)

NYPAS is the core program of the Education & Research Foundation of the Better Business Bureau of Metropolitan New York. NYPAS promotes accountability for local charities, helps establish confidence in the sector, and encourages charitable giving in New York. NYPAS achieves these goals by producing and publishing reliable and easy-to-read reviews of specific charities, informing the public about wise giving practices, urging potential donors to give generously, and helping charities to meet and maintain high ethical standards. NYPAS programs are substantially funded through the generous support of BBB Accredited Businesses and private foundations, as well as by the BBB Accredited Charity Seal program.

NYPAS was launched in 1987, and a second, Long Island-focused PAS program began in 1995. These two programs were merged at the close of 2000, making NYPAS the largest local BBB charity review program in the country. Each year, NYPAS program staff members review hundreds of financial statements, tax filings, annual reports, solicitations, direct mail pieces and benefit information from charities all over southern New York State. Based on this information, NYPAS determines whether a charity meets the BBB Standards for Charity Accountability. NYPAS then produces a report with our determination and a summary of the charity's mission, activities, governance and key financial information. Summaries of these reports are available online at www.newyork.bbb.org and www.bbb.org; by phone; or through the mail. The BBB Foundation’s NYPAS program also monitors issues affecting the local nonprofit community and provides public education on wise giving through issue alerts, media interviews, speaking engagements and active participation in industry forums. Media, trade groups, and other nonprofits regularly consult NYPAS as an expert on charity issues.

BBB/Baruch Research Study In 2006, the BBB Foundation partnered with Professors Greg Chen and Frederick Lane from the Baruch College School of Public Affairs to evaluate data collected from the 750 charities the BBB Foundation had reviewed at that time. Subsequently, Professor Chen of Baruch College wrote his academic paper, “Does Meeting Standards Affect Charitable Giving? An Empirical Study of New York Metropolitan Charities.” Dr. Chen’s paper was published in the professional academic research journal Nonprofit Management & Leadership, Vol. 19, No. 3, Spring 2009. In his abstract for the paper, Professor Chen wrote:

Meeting BBB standards is associated with higher levels of public support. Participating in assessment programs and striving to meet the standards are recommended for nonprofits attempting to improve funding through charitable contributions. Further study that extends the search for the mechanism that links meeting standards to improved donations is recommended.

The BBB is happy to provide a complete copy of Professor Greg Chen’s paper upon request. At this time, we are evaluating opportunities to conduct further research about the relationship between BBB charity standards and charity success. Informational Meetings for Charities and Grantmakers Charity Outreach

In September 2002, the updated BBB Wise Giving Alliance Standards for

Charity Accountability were ratified at the national level and in November 2002 were ratified for the southern New York State area covered by the BBB’s New York Philanthropic Advisory Service (NYPAS). NYPAS released the final version in March 2003 to New York area charities. The new Standards were introduced on a rolling basis with the last Standard implemented in March 2006. To help charities to understand and meet these new Standards, outreach efforts to educate charities began in early 2003 and have continued through 2010 and beyond.

In 2010, we were deeply grateful to have the support of American Express, BNY Mellon, EmblemHealth, and The New York Community Trust as generous co-sponsors of our fourth Charity Effectiveness Symposium and follow-up programs for charities. The following programs for nonprofits were conducted in 2010:

2010 Programs 2/23/10 Transforming Ourselves: Building Effective Leaders, Organizations, and

Communities, the fourth BBB Charity Effectiveness Symposium, was presented. It was generously co-sponsored by American Express, BNY Mellon, EmblemHealth, and The New York Community Trust. There were 279 Symposium registrants, with 232 present on event day, including charity executives, philanthropic leaders, consultants, and other interested parties.

5/19/10 BBB Foundation presented Protecting Your Nonprofit’s Money in the Post-Madoff era, a workshop sponsored by Venable LLP about preventing embezzlement and the fiduciary responsibilities of nonprofit leaders. The 39 attendees included nonprofit CEOs, CFOs, COOs, EDs, board members, and attorney presenters from Venable LLP.

7/14/10 Evaluation Milestones: How We Choose and Assess Measurement

Points That Add Up to Impact, a workshop for nonprofit leaders about impact assessment, was led by Dr. Kim Sabo Flores. The 23 attendees included nonprofit EDs, development officers, foundation executives, evaluation executives, a professor, and others.

Charity Effectiveness Symposia and Website Resource Charity Symposium IV - February 23, 2010 Transforming Ourselves: Building Effective Leaders, Organizations, and Communities Generously supported by American Express, BNY Mellon, EmblemHealth, and The New York Community Trust.

On February 23, 2010, the Metro New York BBB Foundation presented its fourth Charity Effectiveness Symposium. Over 230 nonprofit and foundation leaders, as well as philanthropy advisers, consultants, and staff gathered at Baruch College for the event.

L: Keynote Speaker Victor De Luca of The Jessie Smith Noyes Foundation is shown with BBB President Claire Rosenzweig, at left, and Philanthropy New York President Ronna Brown, at right.

R: Charity Symposium attendees packed the plenary hall. Victor De Luca delivered keynote remarks about “Leading the Transformation Process.” He drew on his experiences as President of The Jessie Smith Noyes Foundation plus his role as Mayor of Maplewood, New Jersey, to discuss the difficult choices that both nonprofit leaders and government leaders are compelled to make in these troubled economic times. Iris Chen, President and CEO of the “I Have a Dream” Foundation, led the panel on “Developing Ourselves as Leaders for Tough Times” as moderator. Panelists were Richard R. Buery, Jr., President and CEO of The Children’s Aid Society; Scott E. Millstein, Executive Director of the Coro New York Leadership

Center; and Janice M. Nittoli, Associate Vice President and Managing Director of the Rockefeller Foundation. They talked about their own diverse paths to leadership, and shared insights about meeting leadership challenges. During the breakout portion of the Symposium, a panel discussion about “Leading the Arts Organization” was led in the plenary hall by Cheryl Green Rosario, Director of Philanthropy of American Express Foundation. The panelists were Helene Blieberg, Principal, Helene Blieberg Associates LLC; Cheryl Ikemiya, Senior Program Officer for the Arts, Doris Duke Charitable Foundation; and Dr. Louise Mirrer, President & CEO, The New-York Historical Society. They provided the latest thinking about how savvy arts organizations are surviving and thriving in the current difficult economic environment.

Screenshot of video from Symposium 2010, available through the BBB Foundation’s “Learn About Charity Effectiveness” website resource at www.newyork.bbb.org/charityeffectiveness. In this clip, Cheryl Green Rosario of the American Express Foundation is introducing the Leading the Arts Organization panel. Additional concurrent workshops were offered at the end of the Symposium. Jeffrey S. Tenenbaum and Rory M. Cohen, Partners of Venable LLP, were joined by Doreen S. Martin, Associate of Venable LLP, at the Symposium presentation of “Protecting Your Nonprofit’s Money in the Post-Madoff Era.” This special workshop for nonprofit leaders was generously sponsored by Venable LLP. The workshop was repeated with the same speakers, plus William H. Devaney, Partner of Venable LLP, on May 19, 2010. Dr. Kim Sabo Flores, an expert in participatory evaluation, led the popular workshop “Evaluation Milestones: How We Choose and Assess Measurement Points That Add Up to Impact.” Dr. Flores also graciously presented a second, longer and more interactive workshop, which took place in the BBB offices on July 14, 2010.

2010 Symposium Attendee Evaluation Summary

Out of 279 registrants, 232 participants were logged in as attendees at the Symposium, including speakers and staff; 207 were registrants. Of these registrants, 72 individuals completed and returned evaluation surveys, about 35% of the paid registrants. We are pleased to provide a brief summary of survey results, drawn from the tabulated data.

• About 89% of Symposium respondents said they would use information from the program in their work, in some way: 64 out of 72 said they would use program information (88.9%)

• A total of 57 out of 72 respondents or 79.2% (vs. 70.7% last year) said the program met their expectations in some way; 55 of 72 respondents or 76.4% said they learned what they expected to learn from the Symposium.

Attendees gave high marks to all of the program elements. We noticed a number of positive comments, especially concerning the presenters’ diverse points of view, such as: “the variety of points of view was good - asking questions can be as important as hearing your answers to those questions”; “heard a range of ideas through keynote, panel and workshop”; and “the program addressed many of the challenges and opportunities we face from different and interesting perspectives.”

Symposium Follow-up Programs

In 2010, we presented two additional programs with speakers that appeared at our February 23rd Symposium.

“Protecting Your Nonprofit’s Money” on May 19, 2010 featured presenters Jeffrey S. Tennenbaum, Rory M. Cohen, William H. Devaney, Partners, and Doreen S. Martin, Associate, of Venable LLP. These attorneys have specialized expertise in not-for-profit law, as well as knowledge of white collar crime prevention and detection techniques. Tishman Speyer generously hosted the event.

Attorneys from Venable LLP present “Protecting Your Nonprofit’s Money in the Post-Madoff Era” at Tishman Speyer. Rory M. Cohen is discussing due diligence tips for nonprofit investment fiduciaries.

We presented “Evaluation Milestones” on July 14, 2010 in the BBB Conference Room. This special workshop was an expanded and more interactive version of the popular workshop presented by Dr. Kim Sabo Flores that was first given at our Symposium on February 23, 2010.

Follow-Up Programs Attendee Evaluation Summary For “Protecting You Nonprofit’s Money” we logged in 30 attendees out of 52 registrants on the event day. Out of the 30 attendees, 18 returned completed workshop evaluation forms (60%). For “Evaluation Milestones” there were 30

confirmed registrants, with 23 attendees checked in on the event day. Out of 23 attendees, a high number – 19 – provided evaluations (83%).

• Virtually all of the “Protecting Your Nonprofit’s Money” attendees who provided evaluations indicated that they would use learning from the program in their work: 16 of the 18 specifically said “yes”, they would use the information (88.9%)

• Examples of knowledge the attendees felt they would use included: “researching investment vehicles”; “I will implement a comprehensive compliance program”; “compliance documentation”; “update investment policy”; “adopt simple risk management controls (background check, mandatory vacations)”; and “examine fiscal procedures manual to examine/update internal controls.”

• 15 out of 19 of “Evaluation Milestones” respondents who said they learned something from the workshop that they would use at work (78.9%). Nearly all attendees indicated that the program met their expectations in some way: 14 out of 19 (73.7%).

• The attendees said they learned some rather specific things, especially citing the storyboarding technique, for example: “difference btw. indicators & outcomes”; “collaboration, storyboard, creating program officer buy-in”; “info about qualitative evaluation”; “storyboard/logic model - building collaboration”; and “tips were very helpful.”

As with the Symposium, the audience of both programs included nonprofit and foundation executives, board members and staff executives, as well as consultants and persons interested in entering the nonprofit world as professionals. BBB Charity Effectiveness Website: Films, Whitepapers

www.newyork.bbb.org/charityeffectiveness

A WEBSITE RESOURCE ABOUT NONPROFIT EVALUATION

L to R: Iris Chen, President & CEO, “I Have a Dream” Foundation, moderator; Richard R. Buery, Jr., President & CEO, The Children’s Aid Society; Scott E. Millstein, Executive Director, Coro New York Leadership Center; and Janice M. Nittoli, Associate Vice President, Managing Director, Rockefeller Foundation.

BBB Foundation Charity Effectiveness Website Resource

The BBB’s 2010 Charity Effectiveness Symposium was filmed and is viewable online.

Films of prior Symposia and whitepapers are also available through this online charity effectiveness resource.

Left, a screenshot of a video from 2010, showing “Developing Ourselves as Leaders for Tough Times” panelists at the February 2010 Symposium.

In order to increase the impact of the BBB’s 2010 Charity Effectiveness Symposium, it was digitally filmed, and the program content has also been summarized in a whitepaper. The Metro New York BBB Foundation’s website segment about charity effectiveness was revised and a unique URL was created for it so it would be easy to find: www.newyork.bbb.org/charityeffectiveness. This online resource also houses online films of prior Charity Effectiveness Symposia along with their matching whitepaper summaries. The mini-site also contains basic information about BBB Standards in the area of charity effectiveness, and some helpful resources. Over time we plan to add material and enhance this online resource about charity effectiveness.

BBB Accredited Charity Seal The BBB Accredited Charity Seal symbolizes integrity in charities. Only

charities that have met all 20 BBB Wise Giving Standards for Charity Accountability are eligible to join the Seal program. The BBB Seal for charities provides a quick-check, easy-to-understand communications tool for the benefit of both charities and donors. It captures complex numbers, facts, and policies in a simple Seal, showing that a charity has met all 20 of the BBB’s Standards for Charity Accountability.

As of December 2010, the NYPAS Accredited Charity Seal program had grown

strongly to include 220 participating charities, up from 171 in October 2009 and 160 in October 2008 (and up from 66 Seal holders after the program’s first 18 months, in December 2005).

Seal participants may display the Seal in transient advertising and solicitations such as newspaper ads, posters, direct mail appeals, and in annual reports and on letterhead stationery. Seal participants may also install the Seal anywhere on the local charity’s primary website, on any website where the local charity advertises, and in emails provided the Seal clicks to a participation confirmation page.

BBB Accredited Charity Seal participation is voluntary for eligible charities. To

help cover the cost of the necessary charity reviews that underpin the Seal program, and to ensure that the BBB can provide this public service in the future on a more self-sustaining basis, charities that wish to display the BBB Seal are asked to pay a fee pegged to charity size. The New York BBB Seal fee ranges from $50 to $1,000 annually for most organizations we cover, depending upon their operating budgets, with a maximum of $5,000 for a very large organization with public contributions of over $60 million. Participation in the Seal Program also requires that the charity sign

a formal license agreement that specifies exactly how the BBB Charity Seal can be used.

In 2001, Princeton Survey Research Associates conducted a study on behalf

of the BBB to assess consumer information needs regarding charities. Study results showed that the Better Business Bureau is perceived as “a more authoritative source of information about charities than other outside sources.”

• 70% of adults say it is difficult to know whether a charity asking for their support is legitimate.

• 84% of surveyed adults said that it would be at least somewhat helpful – and four in 10 (43%) said it would be very helpful – if an independent organization evaluated charities and awarded a seal to those meeting certain ethical and accountability standards.

With this evidence of a BBB charity seal’s value, the BBB’s Wise Giving Alliance piloted and launched a Seal program at the national level in 2003. The Metro New York BBB Foundation’s Accredited Charity Seal Program for local charities was developed in 2003 and 2004, and successfully launched for New York in June 2004. New Donor’s Guide to BBB Charity Seal Holders Available via www.newyork.bbb.org or go to http://nycharityguide.org

In time for the 2010 holiday giving season, NYPAS launched a new web resource featuring one-stop access all of the BBB Charity Seal Holders in the Metro New York area. The Donor’s Guide To Charity Seal Holders is a convenient tool for people who want information on Seal-holding local charities that meet the BBB’s 20 rigorous accountability standards. Visitors will find links to each charity’s full BBB review, details about the organization’s mission, contact information, and links to the charity’s own website. From October 2010 through April 12, 2011, the mini-site has drawn 2,051 visits so far, with average time on the site of 2:38 minutes/seconds. BBB’s Online Charity Report Resources Sites: www.newyork.bbb.org & www.bbb.org & www.give.org

Donors and the general public can find all BBB charity reports by name and location through no-cost searches at either local or national BBB websites. There are currently over 870 Metro New York area BBB charity reports and about 1,200 national BBB charity reports available through BBB websites, as well as many thousands of local charity reports from BBBs in other states. In addition, BBB websites contain a wealth of educational information for charities about meeting high standards, and tips for the public about wise giving practices.

NYPAS Charity Evaluation Software Update Generously supported by IBM In 2009 and 2010, IBM provided generous grant and in-kind programming assistance, to support updating of the BBB’s charity evaluation software program. Project goals are to harmonize and improve national and local versions of the BBB charity review software program; facilitate online input of data by local charities; and thereby enhance user productivity. This project remains active in 2011. Internet-Based Efforts to Promote and Track Donor Use of BBB Charity Review Information We have tracked 34,225 overall page views for charity pages in the top 6,000 pages on our website at www.newyork.bbb.org during 2010, with 20,374 unique page views; this indicates that many viewers are likely to be repeat users of charity information pages on the site. Through a generous in-kind grant, the Metro New York BBB Foundation has been able to create Internet search ads that guide the public to its website charity reports and information about charity accountability. Between March 17, 2004 and April 12, 2010, internet ads about general NYPAS charity information services drew a total of 48,206 clickthroughs to the www.newyork.bbb.org website, with a total of 2,935,429 “impressions” or exposures of the ads in searches, yielding an overall effectiveness rate of 1.64%. In the prior year (1/1/10 – 12/31/10), the online PSAs drew 4,381 clickthroughs to Metro New York BBB charity information, versus 530,368 search impressions, an effective rate of 0.83% for 2010. Possible reasons for the lower 2010 clickthrough rate may include fewer donor charity information searches during difficult economic times, as well as recent changes in search word algorithms that have reportedly affected search results. We are considering additional awareness strategies as a result. Overview of BBB Foundation Charity Accountability Program (NYPAS)

Average Percent of Total Spent by Reviewed Charities, 2010

Fundraising 8%

Administration13%

Programs 79%

Of the 580 charities given complete reviews, 193 or 33.3% failed one or more Standards. The percentages shown above refer to these 193 charities. (387 meet all Standards; 271 are “nondisclosure” charities; 19 are not ranked.)

Non-Disclosure means the charity failed or declined to respond to requests for information. Not ranked means the charity would not normally be eligible for NYPAS review, but a report without BBB ranking was prepared for public information purposes, as a courtesy.

BBB Standards most often not met by reviewed charities in 2010

Commonly Missed BBB Charity Standards

Reviewed charities that do not meet all BBB Standards are often failing critical ones related to financial management and disclosure. The two most-missed Standards concern the board-approved budget and the organization’s annual report. Effectiveness Standards 6 and 7 are among the top 5 most-failed Standards. Standard 17, relating to Website Disclosures, is also frequently failed by charities. By comparison, it is fairly uncommon for charities to fail Ratio Standards 8 and 9.

Standards Missed (193 out of 580 Complete Reviews) 14. Board-Approved Budget. Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration. (104 charities) 16. Annual Report. Have an annual report available to all, on request, that includes: (a) the organization’s mission statement, (b) a summary of the past year’s program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets. (88 charities) 6. Effectiveness Assessment Policy. Have a policy of assessing, no less than every two years, the organization’s performance and effectiveness, and determining future actions required to achieve its mission. (81 charities) 17. Website Disclosures. 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 IRS Form 990. (80 charities) 7. Effectiveness Reporting to Governance. Submit to the organization’s governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions. (72 charities) 1. Oversight. A board of directors that provides adequate oversight of charity’s operations and staff. (58 charities) 12. Expense Breakdowns. Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category. (35 charities) 3. Governance Meetings. A minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. (33 charities) 18. Privacy. Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, and (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information. (27 charities) 8. Program Expenditure: Spend at least 65% of total expenses on program activities. This percentage is taken from the audited financial statements and puts total program expenditure over total expenditure. There is currently a “flex” in this standard, for fiscal years 2009 and 2010, down to 55%, if and only if the organization passed or would have passed the standard in a previous review. (24 charities) 9. Fundraising Expenditure: Spend 35% or less of related contributions on fundraising. Fundraising contributions should not be spent excessively (over 35%) on further fundraising activity. There is currently a “flex” in this standard, for fiscal years 2009 and 2010, up to 45% if and only if the organization passed or would have passed the standard in a previous review. (18 charities)

Note: Individual charities may have missed more than one of these Standards. Counts therefore do not add up to total number of charities that failed BBB Standards.

Additional Information on NYPAS Charity Reviews in 2010 Regional Breakdown (includes all NYPAS charity reports)

• 596 (69%) of the charities with 2010 reports are from the 5 boroughs of New York City.

• 217(25%) of the charities are located in Long Island. • 57 (7%) of the charities are located in the Mid-Hudson Region.

Field/Focus Area The categories that are included in 2010 NYPAS charity reviews are listed below from largest to smallest:

Total Revenue (includes earned-income, government contracts, and public support) Of the organizations listed in 2010 NYPAS charity reviews, the total amount of revenue from all sources: $12,350,819,175 ($12 billion). Total Public Support (includes donations, corporate and government grants, and in-kind services)

• The total amount of public support received: $4,692,444,579 (4 billion) • The average of total public support received: $6,780,989 • The median of total public support received: $1,494,007

Fundraising: Organizations spent an average of 15% of their total public support on fundraising. In other words, 15 cents of each donated dollar was spent on fundraising.

BBB Foundation Public Education and Outreach Programs

Latino Initiative In 1999, the BBB Foundation created The Latino Business and Consumer Education Initiative. Through this long-term initiative, the Foundation seeks to promote consumer fraud prevention for Hispanics and raise awareness of key issues that affect Latino consumers, businesses and charities in New York. The Get More Money Now, BBB Live: Protecting Your Home, and BBB Live: Take Control of Your Debt projects described in this report are some of our ongoing programs

Giving Guide Category (870) Number Percent Health & Human Services 335 39%

The Arts & Culture 136 16%

Children, Youth & Families 132 15%

Community Development & Civic 115 13%

Animals & the Environment 50 6%

Education & Literacy 36 4%

Religious 26 3%

General 22 3%

Law & Public Interest 18 2%

related to this initiative. Previous Latino Initiative programs have also included Latino Executive of New York (LENY) Awards events to honor Hispanic business leaders, educational projects such as Good Business Practices for Entrepreneurs, and technology development projects to build infrastructure for support of program services in both Spanish and English.

Educational Programs for Consumers BBB Live! – November 3, 2010 Take Control of Your Debt/Toma Control de Tus Deudas On November 3, 2010 the BBB Foundation presented its third “BBB Live” program for Spanish speakers in collaboration with WXTV Univision 41 and with generous sponsorship by Banco Popular. The program, entitled “Take Control of Your Debt/Toma Control de Tus Deudas”, provided important information to the public about dealing with consumer debt. Volunteer bi-lingual professionals answered calls to a special hotline at the BBB’s offices that was promoted on-air by Univision. Callers were referred to credible local and national sources of help for issues such as managing heavy debt burdens and debt collection problems.

Volunteers taking calls Team captain Dawn Carrillo of Banco Popular with BBB President and CEO Claire Rosenzweig Those who called the hotline were aided by 61 volunteers who generously donated their time and energy to the program. Volunteers and advisory help came from the following diverse group of companies and nonprofits: Acción USA, Banco Popular, Brooklyn Bar Association Volunteer Lawyers Project, The Center for Client Retention/ENTREVISTA, Center for New York City Neighborhoods, Civil Legal Advice and Resources Office (CLARO), Council of Better Business Bureaus, Dentorium Products, ERE LLP, Ernst & Young LLP, Feerick Center at Fordham Law School, Fiscal Management Associates, Goodwill Industries of Greater New York and Northern New Jersey, LatinoJustice PRLDEF, Law Office of Edwin Arnes, Law Practice Mgmt., Inc., Linklaters LLP, Macy's, Money Management International, National Puerto Rican Day Parade, Inc., New York State Consumer Protection Board, One Hundred Hispanic Women, Queens Volunteer Lawyers Project, University Neighborhood Housing Program, Volunteer Lawyers for Justice, West Side Campaign Against Hunger, and WXTV Univision 41.

Reporter Berenice Gartner begins her newscast as

a volunteer answers a call.

On the day of the event, Univision’s consumer reporter Berenice Gartner did a live report from the BBB’s offices while volunteers took calls behind her. That segment, predictably, prompted the heaviest volume of calls of the day. A total of 680 calls and call-backs were handled on the program day and on successive days when voice message calls were returned. The majority of calls came from New York City but many were also received from New Jersey and from other parts of New York State, as well as from Connecticut. To ensure that callers got the information they needed, 449 follow-up mailings in Spanish were sent to consumers who provided contact information. Consumers received a tip sheet about debt issues, with information on key resources that provide help to debtors. They also received a brochure about how to handle money issues in Spanish, “Más dinero ya” (“Get More Money Now”). Get More Money Now (Más dinero ya) Generously supported by the FINRA Investor Education Foundation In May 2006, with generous support from the FINRA Investor Education Foundation, the BBB Foundation launched a national public education campaign on credit and debt management, as well as basic saving and investing principles, entitled Get More Money Now (Más dinero ya). The Bank of New York – now known as BNY Mellon - and BBB Military Line/Council of Better Business Bureaus also generously provided further support to enable special printings and distributions of the program material to New Yorkers and to military personnel across the US. In 2008 and 2010, FINRA Investor Education Foundation provided additional generous support to update, reprint, and re-distribute the Get More Money Now brochures.

The Get More Money Now program in English and Spanish is being distributed through BBB Accredited companies, Better Business Bureaus nationwide, community organizations, libraries, Hispanic business associations, and other Hispanic groups. Our records show that there are now 409,000 copies in print of the English brochure and 101,000 in Spanish, most of which have already been distributed to the public. Additional reprintings are planned in 2011.

Get More Money Now (Más dinero ya) www.bbbmoneynow.org

Program content can be viewed and printed out, in Spanish and English, from: www.bbbmoneynow.org. In 2010, the site logged 71,392 unique visitors. As of December 31, 2010, according to Google Analytics, the project’s website had attracted 341,540 unique visitors, of which 333,257 were attributable to donated Internet ads.

Educational Programs for Business BBB CSR Forum III - May 4, 2010 Good Business 2010 Generously supported in 2010 by EmblemHealth and Ernst & Young About 150 corporate executives, marketers, PR experts, CSR advisers, community leaders, and others attended our BBB Foundation’s third Corporate Social Responsibility (CSR) Forum.

In his keynote remarks at the BBB Forum on May 4th, James S. Turley, Chairman & CEO of Ernst & Young took stock of the difficult global economic scene and observed: “I actually think it is a game-changing time, in terms of trust in the marketplace.” He went on to explain how these principles translated into a specific Corporate Responsibility strategy for Ernst & Young that focuses on identifying and building up human potential. Mr. Turley provided recommendations for leaders who are considering their own Corporate Responsibility planning.

Keynote Speaker, James S. Turley: “It’s a game-changing time.”

Michael Holland, EVP and Group Head of Corporate Social Responsibility-New York for Edelman, presented findings from Edelman’s well-known research studies, including the Edelman Trust Barometer, about “Driving Business Growth Through CSR Programs.” Edelman’s research showed that companies that paid more attention to CSR issues in the past three years demonstrated significantly greater annual profits and share price increases.

Robin Reibel, Group Vice President of Macy’s, then presented information about how Macy’s has staged many successful cause marketing partnerships with nonprofits, thus illustrating many of the CSR recommendations made by Mr. Holland. Macy’s chooses causes that are important to their employees and that energize their staff. Selected causes have often been nonprofits that relate to women’s issues. The ultimate goal is to strengthen the relationship with the customer.

Stuart Elliott of The New York Times and

Christopher Graves of Ogilvy Public Relations Worldwide

Stuart Elliott, Advertising Columnist of The New York Times, and Christopher Graves, Global CEO of Ogilvy Public Relations Worldwide, discussed how major corporations do (or do not) manage their reputations well in times when customer trust has been exploded by a crisis. They looked at several case studies of corporate public relations catastrophes. Businesses did badly when they failed to acknowledge the seriousness of problems, blindly counter-attacked their accusers, tried to blame vendors for supply chain problems, or took other steps that made them appear callous and uncaring. It is possible for corporations to respond to corporate responsibility and PR disasters in ways that will help protect their brands and their

businesses moving forward. They can welcome input and suggestions, take them seriously, and show a willingness to take needed actions. Timeliness of response is very important. Mr. Graves urged leaders to realize that corporate responsibility isn’t just about how you spend the money – “it’s about how you make the money.” Responsible practices need to be built into business operations across the enterprise – and across the globe.

The 2010 BBB Forum was promoted with the collaboration of these Event Supporters: The ADVERTISING Club of NY, Council of Better Business Bureaus and its National Advertising Division, Ethics and Compliance Officer Association, Direct Marketing Association, Manhattan Chamber of Commerce, Net Impact NYC, New York Society of Association Executives, PMA- The Association for Integrated Marketing, the Public Relations Society of America, and the Robert Zicklin Center for Corporate Integrity at Baruch College.

Good Business Practices for Entrepreneurs (Buenas prácticas comerciales para el empresario) Generously supported by BNY Mellon With generous support from The Bank of New York, now known as BNY Mellon, the Metro New York Better Business Bureau Foundation developed a program for small business managers in both English and Spanish, entitled Good Business Practices for Entrepreneurs. Created in cooperation with the Federal Trade Commission, it was launched during National Consumers Week in February 2004. We have exhausted our inventory of 62,000 printed pieces in English and Spanish. The website version of this project remains active. As of December 31, 2010, internet search ads for the Good Business program had drawn a total of 141,942 clickthroughs to the project information since the launch of the website for this piece, with 5,782,727 impressions, an excellent and stable effective rate of 2.45% despite plenty of competition for attention on the internet in this particular subject area. In 2010 alone, there were 19,281 clickthroughs to project content.

Good Business Practices for Entrepreneurs A website version of this program was launched in 2004, and migrated to a new national website template in 2007. It is now available at this URL, in the business section of this website: newyork.bbb.org This program content is available online only at this time.

In addition, content for this project continues to be taught by BBB speakers at educational programs and meetings for small businesses. For example, information drawn from the Good Business Practices for Entrepreneurs program as well as from Get More Money Now was presented in 2010 during a BBB seminar at the NY Xpo for Small Business at the Javits Convention Center in Manhattan. Intern Skill-Building Program How the Program Works: Our BBB Foundation is proud to maintain an ongoing, extensive internship program. We provide charity accountability (NYPAS) interns with nonprofit accounting experience and an overview of the nonprofit sector in New York, as well as invaluable details about the management and governance of charities. Additional interns under our Foundation’s program acquire valuable career skills by assisting with dispute resolution, investigations, marketing, accounting, public education, and customer service activities. Intern Program Activities in 2010:

In 2010, despite having fewer interns and intern hours, we saw a dramatic

increase in productivity of nearly 100% in cases closed by dispute resolution interns. These results were accounted for by the slightly greater number of interns performing this work in 2010; and in particular, by the introduction of new software which greatly speeded work processes. Report loads for NYPAS vary widely from year to year, with “heavy” loads every other year, given the two-year review cycle. The 2010 year was a “light” report renewal year. Also, fewer NYPAS interns were used and fewer intern hours were logged. In addition, staff turnover in the department temporarily slowed down intern recruitment and training processes just prior to the critical summer period. Despite this, interns contributed to a larger than ever total number of active NYPAS charity reports – over 870 at this time.

Intern Hours for 2010

Number of 2010 Interns

Cases/Reports Assisted by Interns in 2010

1,250 NYPAS 11 NYPAS 229 NYPAS

7,631 NYC (Dispute Resolution)

43 NYC (Dispute Resolution)

21,684 NYC

0 NYC accounting 0 NYC Accounting - - 83 Mid-Hudson 3 Mid-Hudson 131 Mid-Hudson

8,964 Total 57 Total 22,044 Total

Moved to new office space and switched to different software in 2009; “high” charity review volume year. Intern Hours for 2009

Number of 2009 Interns

Cases/Reports Assisted by Interns in 2009

2,037 NYPAS 19 NYPAS 554 NYPAS

7,546.5 NYC (Dispute Resolution, Business Development, Investigations)

39 NYC (Dispute Resolution, Business Development, Investigations)

9,846 NYC

190 NYC accounting 2 NYC Accounting - - 859.5 Mid-Hudson 4 Mid-Hudson 1,063 Mid-Hudson

10,633 Total 64 Total 11,463 Total

In 2010, interns came from a wide variety of schools, including Baruch College, Benjamin N. Cardozo School of Law, Berkeley College, Brooklyn College, Columbia University, Dickinson College, EF International Language School, Fordham University, Hunter College, LaGuardia Community College, New York University, Queens College, Sarah Lawrence, University of Rochester, and Wesleyan University .

Summer 2010 Interns in NYC Office Top row, L to R: Dale Valentine, Gee Tom, Harpreet Singh, Christopher Brown, Philip Grudzina, Zeina Alattar, Margaret Ting, Mohamed Zakaria and Hyochon Lee. Bottom row, L to R: Alisa Lu, Joyce Lan, Rong Zhan, Elyssa Alpert, Mili Patel and Aileen Almonte.

One of the many valuable parts of the BBB’s Summer Intern program is its series of casual weekly luncheons hosted by the BBB, where interns get the rare chance to meet and speak with outstanding business and nonprofit leaders. Speakers discuss their career paths, and provide interns with an insider’s view of the New York business and charity community. Summer 2009 and 2010 luncheon speakers included high-profile BBB and BBB Foundation board members.

Interns talk with Rhonda McLean, Deputy General Counsel of Time Inc. in 2010.

Reg Foster, Regional Manager-NY/NJ/Canada for IBM’s Corporate Citizenship & Corp. Affairs, shares insights.

Patricia Sampson, Managing Director of BNY Mellon, Lisa Davis, Senior Director of Communications and Public with interns following her luncheon discussion. Affairs at Sony, during her conversation with interns.

John Simone, Director-Global Sustainability and Social BBB Chairman Paul Galiano, Senior Managing Director of Responsibility at Colgate-Palmolive, talks about careers. Tishman Speyer, is introduced to interns by President Claire Rosenzweig. Former interns Peter Espinoza, Gee Tom, Andrew Palestrant, Anthony Ali, Suhail Ahmed, and Tatiana Sivak-Dashkin became BBB employees and several remain on staff at this time. Interns provide exit survey feedback about their BBB experiences, which is typically very positive. A quote from one 2010 intern: “I cannot thank everyone here enough for such a memorable internship. The environment was so comfortable, understanding, and supportive.” Another wrote: “I will definitely use the skills I have learned at the BBB in the future.” And a third commented: “I very much enjoyed the weekly luncheons since they allowed me to meet many high-level executives and learn about their respective fields. This was also incredibly helpful in helping me decide my future career.” And yet another said: “This was an amazing experience. Please do not change a thing.” We are grateful to Whitehead Foundation, Colgate-Palmolive, Surdna Foundation, and Tishman Speyer for their grants in 2009 and 2010; and to Fiscal Management Associates and Saks Fifth Avenue for generous new grants in 2010. Previous Intern program funders have also included: BNY Mellon, The Frances L. & Edwin L. Cummings Memorial Fund, and Banco Popular.

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Populations Served by Metro New York’s BBB Foundation The Education and Research Foundation of the Better Business Bureau of Metropolitan New York provides information and assistance to consumers, nonprofits, businesses, journalists, professionals (such as accountants and attorneys) and government officials who are interested in the following:

• Ethical business and charity standards and practices • Consumer and business protection, fraud prevention, and education • Charity review • Charity accountability and governance • Technical assistance for charities • Wise giving practices for donors • Charity effectiveness and impact

The primary geographic focus is on residents of New York State and New York City. However, many of the Foundation’s educational programs – such as its financial literacy program, Get More Money Now - have been distributed nationally with great success. The Foundation’s charity accountability program, the New York Philanthropic Advisory Service or NYPAS, is a national model for comparable programs in the BBB system. Under its Latino Initiative, the BBB Foundation has made a concerted effort to acquire technology resources and other resources that would enable it to provide culturally appropriate, needed consumer and business information to the public in both Spanish and English. This is an ongoing project. Recent BBB Live television call-in programs in Spanish under this Initiative have reached and served consumers in the Tri-State Area, as well as some states well outside of the Metropolitan New York vicinity.

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The Better Business Bureau:

Partner Organization to the BBB Foundation

Better Business Bureau Accredited Businesses

Better Business Bureau Accredited Businesses make a commitment to conduct their business affairs with reliability and integrity, in accordance with BBB Standards and guidelines. Consumers understand the nature of this commitment and value it. BBB is a leader in the effort to create a market where buyers and sellers can trust each other. Consumers and businesses can Start With TrustSM by turning to the BBB for business and charity reliability information.

Business Integrity and Consumer Trust

Trust in business is essential for a strong economy. Customer confidence is a vital element of business strength. The Better Business Bureau encourages business practices that will merit consumer trust.

On June 22, 1922, the Metropolitan New York Better Business Bureau was founded to combat investment fraud, as well as deceptive advertising. Today, by promoting guidelines for reputable conduct in advertising and in the online marketplace, the BBB helps New York companies become successful and grow. By reporting on consumer experiences with businesses, the BBB encourages public recognition of companies that demonstrate reliability in their operations.

Solving Problems Without Litigation

BBB helps to solve problems between businesses and customers without litigation, and gives consumers and businesses pre-purchase information that often saves them a lot of money and trouble.

Well over 2 million times a year, individuals and businesses contact the Metropolitan New York BBB to use its services. They visit the website, call, write, email, or even walk in the door, to ask about business and charity reliability, request educational information, and file complaints. This level of volume is remarkable, considering the fact that Metro New York’s BBB is a nonprofit organization staffed by a relatively small group of professionals and volunteers.

Feedback: Hundreds of people send thank-you emails and letters. “The organization you represent remains a wonderful resource for consumers in distress,” we heard from an individual who submitted a complaint about a problem with a mortgage banker. We also received this comment: “I needed help, could not get a hold of this company, nor locate my products and the BBB 100% rectified all my issues.” Another consumer emailed us to say: “It is clear that these companies really do care how they are rated by BBB and as such will attempt to resolve an issue once you become involved.” Yet another person wrote: “You have helped me at least in three occasions. Each one proved to be correct and your input made my life ten times easier.”

Metropolitan New York’s BBB partners with its separately incorporated and governed BBB Foundation, to create public education programs that are relevant to our community’s changing needs.

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Metro New York BBB Foundation Board of Directors and Officers

2010

Chairman Keith Darcy Executive Director Ethics & Compliance Officer Association Vice Chairman Reg Foster Regional Manager-NY/NJ/Canada Corporate Citizenship & Corporate Affairs IBM Corporation

Treasurer William J. Forrester President & CEO Goodwill Industries of Greater New York and New Jersey President Claire Rosenzweig (ex-officio)

Directors Laurie J. Bilik President Global Human Resources Peggy Crisalli Director of Development Everybody Wins Carmen Nelson Corporate Philanthropy Consultant Nelson Massy Associates

Harriet Novet Vice President, Public Affairs Time Warner Cable Hilda H. Polanco, CPA, CCSA Managing Director Fiscal Management Associates, LLC Leigh-Anne Walker Senior Consultant Ethical Leadership Group

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Metro New York BBB Foundation Statement of Activities

Year Ended December 31, 2010

Unrestricted Net Assets

Temporarily Restricted Net

Assets

Total Net Assets

Support and other revenues: Contributions $ 126,610 $ 95,342 $ 221,952 Interest 1,172 1,172 Charity seal income 173,038 173,038 Pamphlet/Giving Guide income 15,000 15,000 Income from related party 13,150 13,150 Donated services* 73,361 73,361 402,331 95,342 497,637 Net assets released from restrictions due to satisfaction of program restrictions

82,306 (82,306) 0

Total support and other revenues 484,637 13,036 497,637 Expenses: Program services: Philanthropic Advisory Service (NYPAS)

206,803 206,803

Educational initiatives 97,357 97,357 Total program services 304,160 304,160 Supporting services: Management and general 96,835 96,835 Fund-raising 12,882 12,882 Total supporting services 109,717 109,717 Total expenses 413,877 413,877 Change in net assets 70,760 13,036 83,796 Net assets – January 1 460,155 43,135 503,290 Net assets – December 31 $ 530,915 $ 56,171 $ 587,086

* Refers to reported fair value of donated PSAs, including web search ads and PSAs on two radio stations about holiday giving. A copy of the latest annual report for the Education and Research Foundation of the Better Business Bureau of Metropolitan New York may be obtained, upon request, from the organization or from the Office of the Attorney General, 120 Broadway, New York, NY 10271.