Hello everybody! Welcome to Heveron & Heveron, CPA’s first blog! We have created this section to keep you, our clients, as up to date on the issues that affect you as possible. In this entry we will be discussing new BBB Wise Giving Alliance’s issued Standards for Charity Accountability.
The BBB Wise Giving Alliance, with the help of experts in the non-for-profit world, has focused on four main issues with respect to accountability; Governance and Oversight; Measuring Effectiveness; Finances; and Fundraising. As far as Governance and Oversight is concerned, the BBB Wise Giving Alliance would like to see all non-for-profit Boards to meet at least 3 times per year and be comprised of 5 members or more. Only 1 member of the Board should be receiving compensation from the organization, (no more than 10% for larger boards) and no other members of the board should receive compensation even as independent contractors. What this means for you is that all but 1 (or 10%) of the voting members of the board should be volunteers. However, non-voting members can be compensated from the organization, for instance, if you are a school and have teacher representatives on the board, whom are compensated, but do not have voting powers, this is alright as long as they are not involved in any discussion related to compensation of employees.
In the second area, Measuring Effectiveness, they note that all charitable organizations should be examining their performance and effectiveness at least every other year to determine what is working, what isn’t working and what needs to be worked on.
Thirdly, Finances, the BBB Wise Giving Alliance states that an organization’s net assets should not be more than 3 times their currently budgeted expenses or, for those without a budget, 3 times of the prior year’s expenses. For those of you lucky enough to have that much funding think about purchasing new equipment, upgrading facilities, or maybe even expanding your services!
Lastly, Fund Raising, the BBB Wise Giving Alliance wants you to assure your donors that they are donating to a worthy organization, that their funds are being spent wisely and that their privacy is being upheld. What this means is that your fund raising solicitations should include an accurate description of what your organization does, who you are and where their money is going. Think about including a reference on your solicitations or invitations that would direct the potential donor to a place where they can get an accurate accounting of your mission statement, program accomplishments, finances, and board list. Does this sound familiar to anyone? All of this information is on your organizations 990EZ or 990! For all of you located in New York State you could simply list charitiesnys.com or nycharities.org on your solicitations. This will direct your potential donors to a website that can provide them with a copy of your past 990s and financial statements! For those not in New York you could list guidestar.org or have copies available at your main office upon request. As far as donor privacy, please keep your donor information confidential and remember to remove those Schedule B’s before you hand out your 990s!
Until next time!