Charity Watchdog Group Unveils Plan to Bring Evaluation Process Online
By NICOLE WALLACE
Features Editor
July 22, 2004 | Read Time: 2 minutes
Next month the BBB Wise Giving Alliance, a charity watchdog group, will start using a new online system to collect and evaluate charity data — a move that the organization hopes will allow it to increase significantly the number of charity reports it issues.
The alliance evaluates charities based on numerous standards for fund raising, governance, financial management, and public information. Charities are asked to complete a six-page paper questionnaire and submit more than a dozen documents, such as audited financial statements, budgets, fund-raising contracts, direct-mail appeals, and articles of incorporation, which for many groups amount to hundreds of pages of material.
Currently the alliance offers reports on about 500 national charities. The watchdog group said it hopes with the new electronic system, it will be able to evaluate several thousand organizations within the next two years.
As the organization introduces its electronic system, charities will be asked to complete an online form that includes about 200 questions, most of which can be answered with a yes or no or with a number, and to submit their IRS Form 990, audited financial statements, and annual report. The system will analyze the information and generate a draft report. Alliance employees will check the responses given online against supporting documents it has requested from the charities. Organizations will also be asked to sign a pledge attesting to the veracity of the information they submit.
The alliance said the automated system would not be able to detect certain violations, such as related-party transactions, potentially misleading appeals, and the questionable allocation of fund-raising costs. The online system, however, will flag certain responses for further investigation by alliance employees, or automatically ask charities to supply additional documents in response to certain information.
The alliance plans to share the new system with local business bureaus that evaluate regional and local charities.
The automated system has been tested both internally by alliance employees, and by several national organizations. Additional national groups will soon be invited to participate in a live online demonstration and conference call to offer their suggestions for improvement.
