October 04, 2012

Watchdog Plans Review of Charity Fundraising Appeals

A prominent charity watchdog is stepping up its efforts to protect donors from fundraising appeals that include misleading or false statements.

The BBB Wise Giving Alliance said this week it will begin to review direct-mail solicitations, commercials, and telemarketing scripts from randomly selected charities beginning in January. The group will also review materials from nonprofits that have been the subject of complaints to its local chapters or that have been singled out in media reports.

The alliance, which rates charities on an array of financial, governance, and management issues, has always looked at whether charities are truthful in their appeals, but now it will spend more time fact checking solicitations as part of the evaluation process.

While the watchdog group believes that the "vast majority" of charities are truthful in their solicitations,  H. Art Taylor, president of the alliance said, "we are also concerned with the extent to which charities are turning blind eyes to their paid fundraising firms,"

In a speech this week to the National Association of State Charity Officials, Mr. Taylor said "When assigning responsibility for the oversight of fundraising, the buck stops with the charity’s board of directors.”

Boards will be held accountable for “bad fundraising agreements, misleading copy, and overly aggressive tactics,” he said.

The alliance offers the following tips to organizations that want to make sure their solicitations meet its standards:

• The charity’s governing board or development committee should review major fundraising agreements.

• Agreements with outside solicitors should include a provision that enables the charity to end the contract within a reasonable length of time.

•  All direct-mail and telemarketing copy should be reviewed and approved by the charity before use.

•  The board should be provided with periodic updates about fundraising-campaign results.

• Competitive bids should always be considered before hiring solicitors.

• Charities should never rely on a single method to raise funds but diversify development efforts to avoid a financial emergency if one approach to raising money runs into trouble.

•  Charities should keep ownership of the names of donors acquired through a fundraising firm’s efforts and not give them up to the company.

What do you think of the BBB Wise Giving Alliance's plans? Is it a smart move for donors and charities? Post a comment below to share your thoughts.

Send an e-mail to Doug Donovan.