2 0 1 3 A n n u A l r e p o r t

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BBB Wise Giving Alliance

O u r M i s s i O n :To help donors make informed giving decisions,

and advance high standards of conduct among charities.

2013 Board of Directors

CHAIrDavid OrmstedtAttorney/ConsultantBloomington, IN(Former Assistant Attorney General in charge of Charities Bureau, Connecticut)

VICe CHAIrMyrl WeinbergPresidentNational Health CouncilWashington, DC

treASurerMark ShamleyPresidentNational Association of Corporate Contributions ProfessionalsWashington, DC

SeCretArYAudrey AlvaradoAlvarado Consulting(Former Vice President, Nonprofit Roundtable of Greater Washington)Washington, DC

Holly ChericoDirector, Marketing & CommunicationsThe Kingsbury CenterWashington, DC

Jocile EhrlichPresident & CEOBBB of CincinnatiCincinnati, OH

Karl EmersonMontgomery, McCracken, Walker & Rhoads, LLPPhiladelphia, PA(Former Director, Pennsylvania Bureau of Charitable Organizations)

Cindy M. LottSenior Counsel, National State Attorneys General ProgramColumbia Law SchoolNew York, NY

Paulette MaeharaPresident (retired)Association of Fundraising Professionals

Char MollisonFaculty and Program CoordinatorNonprofit Management ProgramJohns Hopkins UniversityWashington, DC

Patrick RooneyExecutive DirectorCenter on Philanthropy at Indiana UniversityIndianapolis, IN

Claire RosenzweigPresidentBBB of Metropolitan New YorkNew York, NY

Jack SiegelCharity Governance Consulting LLCChicago, IL

E. Miles WilsonIndependent PhilanthropicConsultant(Former Director, Dorothy A. Johnson Center for Philanthropy, Grand Valley State University)Grand Rapids, MI

eX oFFICIoH. Art TaylorPresidentBBB Wise Giving Alliance

2013 StAFF roSter

H. Art TaylorPresident & CEO

Bennett WeinerChief Operating Officer

Kelley BevisResearch Analyst

Elvia CastroResearch Analyst

David KurtzResearch Analyst

Jean LewisAdministrative Assistant

Edward LoftinResearch Analyst

Holly ParkerResearch Analyst

Julie A. RizzoDirector, Seal Licensing Program and Fundraising

Shawn Van GorderDirector, Charity Evaluation

Letter from the BBB Wise Giving Alliance President

H. Art Taylor

A number of tragedies and disasters in 2013 brought more public attention to the importance of making informed giving decisions. Among other tragic events, there was the horrible Boston Marathon Bombing in April followed by the tornado in Moore, Oklahoma, in May. Then the Colorado flooding occurred in September.

In each case, the BBB Wise Giving Alliance conducted outreach activities to educate donors about how to avoid those who seek to take advantage of American generosity and how to identify those charities that are in the best position to help victims in a time of need. It is a sad fact that questionable solicitors will strike when public emotion is high and donors are more vulnerable to give before seeking additional information about the disaster relief charity.

In addition, we saw that these disasters led to the growth of crowdfunding. This is a website that enables individuals to provide financial assistance to either an individual in need or to specific charity projects. In response, the Alliance devoted a fall 2013 cover story to this subject in its Wise Giving Guide magazine. The speed and ease with which one can create campaigns on such crowdfunding websites limits the ability of such sites to adequately vet fundraising appeals.

Finally, we sought to educate donors about the importance of not solely relying on charity financial data when making a wise giving decision. (See Annual Report entry on Overhead Myth Campaign.) This has always been an aspect of our giving advice as the BBB Standards for Charity Accountability are broad and cover many aspects of a charity such as governance, effectiveness reporting, donor privacy, website content as well as finances.

We appreciate your continuing interest in seeking to make the most of your charitable gifts and encourage everyone to visit our Give.org website before they give.

Sincerely,H. Art Taylor

President & CEO BBB Wise Giving Alliance

2013 BBB Wise Giving Alliance Highlights

Academic Study of BBB Charity Review DataIn September 2013, an academic study was released by Professor Greg Chen of the Baruch College School of Public Affairs of the City University of New York. The study evaluated national charity review data from the BBB Wise Giving Alliance and regional charity review data from the Education and Research Foundation of BBB Metro New York. The study showed that charities meeting all BBB Standards for Charity Accountability achieved increased fundraising revenue, by 8% for the national charity sample and by 13.5% for the BBB of Metro New York sample. This new study reinforces the findings of a 2009 academic study by Professor Chen that used a previous dataset from the BBB of Metro New York Foundations’ charity review program. That study also found that “Meeting BBB standards were associated with higher levels of public support.”

Overhead Myth CampaignIn June 2013, the Alliance signed a joint “open letter to donors” along with GuideStar USA and Charity Navigator explaining that charity finances should not be the sole consideration when making a donation decision. The Alliance has always believed that a charity’s accountability should be assessed against broad standards for conduct rather than simple financial metrics alone. Charities need to spend money on administration and fundraising in order to function at a high level. There is a place for overhead and fundraising metrics but it is in the margins – where a charity spends a preponderance of its funds on administration and fundraising. There is also significant misunderstanding about what constitutes overhead. Many donors mistakenly believe that salary and benefits paid to charity staff are 100 percent overhead when that is not the case. The Alliance believed this Overhead Myth campaign would help correct some of these misperceptions. The letter received significant media mentions and resulted in numerous invitations for the Alliance President to speak at various charity conferences about this subject.

New Website Planned for Release in 2014In 2013, the Alliance worked towards the launch of a new website planned for 2014 which, among other things, will emphasize the separate audiences addressed by the Alliance: both the donating public and charitable organizations. The site will also bring more attention to the charity report search function. New features of this site will seek to engage the donating public with additional communications about how to make informed giving decisions and providing Alliance opinions on various significant charity accountability issues.

Over 5 Million Views of Charity ReportsThe cumulative views of national charity reports continued at a high level with over 5.3 million views of reports throughout the year. The new report format, introduced in July 2012, brings more user attention to the broad range of issues covered by the BBB Standards for Charity Accountability. An evaluation summary box displays the charity’s status with each of the 20 BBB Charity Standards through the use of symbols and colors.

Update on Charting Impact The Alliance continued its collaboration with both Independent Sector and GuideStar USA to promote charity participation in Charting Impact – a project that gives charities a common format to provide public information on how effectively they are meeting their missions. In October 2013, the reporting activity was integrated into the GuideStar Exchange program which has significantly increased the number of completed Charting Impact reports.

Accredited Charity Seal ParticipationIf a national charity meets all 20 BBB Charity Standards, it is called an Accredited Charity. There is no charge to the charity for accreditation. Of the 1,310 reports available on national charities on the Alliance’s website at the end of 2013, 507 met all 20 BBB Charity Standards, 281 did not meet one or more standards, 408 did not disclose information despite written requests and 114 evaluations were in progress. Of the 507 that met standards, 361 chose to participate in the BBB Accredited Charity Seal program so that they could display the seal on their websites and in their fundraising appeals. Charities sign a licensing agreement and pay a sliding-scale-fee to participate in the seal program.

Wise Giving GuideDuring 2013 the Wise Giving Guide magazine focused on accountability issues in the charitable sector. One issue was devoted to the subject of Crowdfunding which has become a popular means to assist specific victims and their families after a weather disaster or other tragedy. The Guide also included a cover story about the accounting issue of joint-cost allocation. This is a circumstance where under certain conditions, Generally Accepting Accounting Principles permit a charity to recognize a portion of appeal expenses as an advocacy/public education program.

Presentations at Charity ConferencesBBB Wise Giving Alliance President was invited to speak at a number of charity conferences and events during 2013 including: Independent Sector’s Annual Conference, National Philanthropy Day in New York, National Urban League, Not-for-Profit Conference of the American Institute of Certified Public Accountants, Direct Marketing Association Nonprofit Federation, National Health Council and the United Way Financial Management & Human Resources Forum. This outreach helps spread the Alliance’s message for charities to strengthen accountability activities and recognize the importance of meeting BBB Charity Standards.

WISEGIVING GU

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B B B W I S E G I V I N G A L L I A N C E : S U M M E R / F A L L 2 0 1 3

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CROWDFUNDINGfor Charitable Causes

2013 FINANCIAL SUMMARY

Financial summary for the fiscal years ended:

12/31/2013 12/31/2012

Revenues and support:

Charity Seal license fees . . . . . . . . . . $ 1,489,375 . . . . $ 1,394,566

Contributions. . . . . . . . . . . . . . . . . . . . . 288,710 . . . . 326,818

Grant from CBBB, Inc. . . . . . . . . . . . . - . . . . 200,000

Publications . . . . . . . . . . . . . . . . . . . . . 15,923 . . . . 8,835

Interest and Other . . . . . . . . . . . . . . . . 9,537 . . . . 2,550

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,803,545 . . . . 1,922,769

Expenses:

Program services . . . . . . . . . . . . . . . . . 1,462,408 . . . . . 1,470,131

Management & general . . . . . . . . . . . 189,273 . . . . 194,184

Fundraising . . . . . . . . . . . . . . . . . . . . . . 58,520 . . . . 72,133

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,710,201 . . . . 1,736,448

Revenue exceeding expenses . . . . . . . . 93,344 . . . . 186,321

Beginning net assets . . . . . . . . . . . . . . . . 348,540 . . . . 162,219

Ending net assets . . . . . . . . . . . . . . . . . . $ 441,884 . . . . $ 348,540

Audited financial statements available on request or by visiting Give.org.

BBB Wise Giving Alliance

3033 Wilson Boulevard, Suite 600 | Arlington, VA 22201703-276-0100 | give.org

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