Watchdog merger doesn’t serve donors

To the Editor:

The letter you published from two Better Business Bureau officials purporting to explain the benefits of the so-called merger of the National Charities Information Bureau and the Council of Better Business Bureaus’ Foundation (“Merger Won’t Affect Goals of Standards,” Letters to the Editor, October 5) contains enough misinformation to fuel a full season of candidates’ debates.

For many years, the letter claims, national charities, corporate-contribution executives, foundations, and others have questioned the rationale for two national charity watchdogs, citing concerns about waste of resources and duplication of effort.

That is a very recent and questionable argument advanced by a few who are pushing this merger. It is a point that could not have been raised until just a few years ago when the Better Business Bureau began competing with the National Charities Information Bureau for corporate and foundation grants.

As for duplication, B.B.B. seeks to evaluate almost 260 charities while N.C.I.B. attempts 370. The two groups overlap on only about 95 charities, not the 200 that Better Business Bureau officials have claimed.

The letter contends the move would “reduce the paperwork burden on charities.” Sure. Instead of providing the very same documents to 31 regulatory agencies and a handful of watchdogs and other organizations, the “burden” would be reduced by one.

Just who is being served here? The charities? The grant makers? What happens to the interests of individual contributors, the people who provide 85 percent of all financial support to charities, the people who rely on more than one source of information, the people who seek independent data? Name just one contributor who believes that a “merged” single voice would be better than two.

Yet the B.B.B. contends that the merger would provide more information for donors. How this will be accomplished, when the B.B.B.’s Philanthropic Advisory Service has a staff of four compared with the N.C.I.B. staff of 19, is a conundrum.

The letter becomes confusing when it notes that N.C.I.B. sets a cap of two years’ worth of current budget or expenses on available assets while B.B.B. standards address this concern by calling for a charity to spend at least 50 percent of total income on program-service activities.

According to this reasoning, a charity with $10-million in annual revenue could conceivably amass $30-million or $40-million of available assets in 10 years and have the Better Business Bureau’s blessing to seek more.

The writers also attempt to contradict my assertion that the B.B.B.’s less-stringent standards or absence of standards can offer a free ride to some charities.

B.B.B.’s Web site currently lists 16 charities that provide information for evaluations, but do not do so for N.C.I.B. Nine of those not accountable to N.C.I.B. manage to meet all B.B.B. standards; four are being re-evaluated, and three do not meet all standards. One charity that does not fall into the above category is a recent addition to the re-evaluation category after having met B.B.B. standards for a considerable amount of time — at the same time that it was on the cease-and-desist solicitation list of at least one state.

Despite the load of misinformation, one should not get the idea that the B.B.B. is the prime villain in this piece. The real villain is the board of the National Charities Information Bureau. The board simply lost its groove, forgot its mission, and turned its back on the giving public.

It went a step further with its own contributors: It betrayed them. For example, part of the total giveaway to B.B.B. is data on some 40,000 people who have contributed to N.C.I.B., accounting for $750,000 in annual revenue. This is being done despite the National Charities Information Bureau’s long-standing promise that it would never give such data to anyone.

Daniel Langan
Former Director of Public Information
National Charities Information Bureau
New York