Charity Watchdog

Charity watchdog organizations are as important as the charities and nonprofits that provide services. With thousands of nonprofits in existence and new ones cropping up everyday, the public needs a go-to organization.

Charity watchdog agencies provide insight into the daily operations of nonprofit agencies. Fundraising procedures, board governance and financial management are all items that are assessed and determined as acceptable for a charity organization. A rating is given that determines the level of success achieved by the nonprofit. In most cases, donors are advised to refrain from dealing with an agency that hasn't attained at least a "B" average.

In most cases, information is compiled and broken down for the donor in a manner deemed appropriate by the guarding organization. For hands on independent donors who like to research information on their own, Guidestar provides 990 tax filings and other public information available on most nonprofits. Guidestar is often a good alternative since some of the watchdog agencies only monitor nonprofits with nationwide coverage.

The benefits of charity watchdogs are most evident to donors. They are given a snapshot of how dollars are allocated within an agency. Agencies that channel lees than 80 cents of every dollar directly into a program often receive lower ratings than those allocating more dollars into programs. In some cases, issues of allocation are more complex and can't be fully explained with this ratio, but it is still a good point at which to begin comparisons.

Donors can also see the level of transparency given by nonprofits through custodial agencies. In some cases, nonprofits may not offer enough information to even achieve a rating. This may be a warning sign that the nonprofit doesn't have all of its business in order.

Nonprofits can use good ratings as a marketing tool to potential donors and existing donors. It can also be a selling point in receiving grant dollars. Ratings for nonprofit agencies are used in much the same way for-profit companies use them.

An added bonus for managers within nonprofits is to use the findings of charity watchdogs to boost morale or create goals for the organization. Managers can congratulate their team on a job well done with high ratings. They can also institute goals outlined by overseer agencies into improvement plans for the entire staff. Ratings can serve many goals for the nonprofit agency.

Currently, there are three charity watchdog agencies. The American Institute of Philanthropy offers this service through a program called Charity Watch. The Better Business Bureau works with the American Institute of Philanthropy and offers a service called the Wise Giving Alliance. The newest watchdog service is web-based and is called Charity Navigator.

Charity watchdog groups will always be necessary. The public needs to be reassured that its dollars are being used in an efficient and safe manner. Nonprofits will continually have to contend with the challenge of reputability. Terrorist threats will hinder legitimate Muslim charities. Cyber scams will affect agencies trying to help in times of natural disasters. Economic challenges will limit the total dollars donated. In every one of these cases, charity watchdog organizations are working to ensure confidence in good nonprofits.

by Maurice Moss

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