Threats of budget cuts and an increase in civic participation have fueled recent bumps in donations across the country. The national organizations of Meals on Wheels, the American Civil Liberties Union and Planned Parenthood have reported exponential increases in new donors since Election Day.
But as new donors begin entering philanthropy, they should improve their understanding of how nonprofits function as well as whether they meet certain accountability standards, said Erin Dufner of the Austin council of the Better Business Bureau.
While there is no single set of standards for all nonprofits and legal obligations differ by state, donors can review the nonprofit’s Form 990, a form required by the IRS in order to maintain the organization’s tax-exempt status. Most nonprofits make their completed form readily available on their websites.
But Dufner says that form can be hard to interpret and that it’s just a starting point for evaluating a nonprofit.
“The 501(c)(3) exemption status is just recognition by the IRS, and the 990 is really a checklist,” said Dufner. “Knowing that there are best practices and standards can help donors make better decisions and help charities do better business.”
Just as it is with for-profit businesses, participation in the nonprofit accreditation process is optional, but Dufner believes the process can be as valuable to the nonprofits as it is to donors.
“We want to help donors make better decisions,” she said, “but we also want charities to know that we want to help them get there to meet those standards.”
One Voice Central Texas, a membership and advocacy organization of almost 100 health and human services nonprofits, requires that its members commit to accountability standards it developed using standards from BBB, the Council on Accreditation and others.
“The community needs to understand that the goal of most nonprofits is to be transparent and in compliance with what the community is expecting of them” said Paul Scott, CEO of AIDS Services of Austin and a past chair of the One Voice accountability standards committee.
One Voice standards include guidelines for board regulatory practices, financial management, hiring and reporting. For those members who don’t meet the standards, One Voice offers trainings and resources and encourages them to tap into their peers for help.
“For example, when I needed a policy, I reached out to other One Voice members and in a few minutes I had three of their policies that I could start from to make ours,” said Scott.
The local family services nonprofit, Any Baby Can, has both BBB and One Voice standards accreditation.
“Not every donor has the time or ability to thoroughly research a nonprofit to ensure donating to them is a worthwhile activity,” said Andy Miller, CEO of Any Baby Can. “It’s important for us to be recognized by these groups so that our donors and the public in general have confidence in our organization and feel good about their investment.”
PHOTO: Andy Miller, CEO of Any Baby Can, speaking at a recent fundraising event. Any Baby Can has met standards accreditation from both the Better Business Bureau and One Voice Central Texas. Photo by Rebecca Green.
NOTE: As part of our partnership, this story also appeared in the Austin American-Statesman on April 8, 2017.