Building trust and transparency is critical for nonprofits. Better Business Bureau Wise Giving Alliance accreditation can elevate your nonprofit’s reputation. Read on to learn more about the BBB’s rigorous evaluation process, how accreditation can help your organization, and how to communicate your commitment to transparency and excellence to your supporters.
In today’s philanthropic landscape, trust andtransparency are paramount. For years, individuals have gone to the Better Business Bureau (BBB) to report complaints and issues with businesses and nonprofits. Organizations of all kinds can also receive BBB accreditation to showcase their dedication to good business practices.
The BBB provides accreditation to national and regional charities through the Wise Giving Alliance (WGA) and lists all participants on the websiteGive.org. In this article, we delve into the BBB’s rigorous evaluation process, the benefits of obtaining this accreditation, and how to share it with your supporters.
What is the Better Business Bureau’s Wise Giving Alliance?
Well-known throughout the U.S. and Canada, the Better Business Bureau (BBB) has been around for several years. It is a nonprofit organization that collects and evaluates consumer complaints and reviews about businesses and assigns ratings based on that feedback. These ratings range from A+ to F.
Individuals can research companies and nonprofits through the BBB tocheck their status and see if they are valid organizations. They can also check what past issues may have occurred between organizations and clients, donors, or the government.
The BBB also offers dispute resolution to resolve conflicts between consumers and businesses or nonprofits.
What is the Wise Giving Alliance?
The Wise Giving Alliance (WGA) is a program of the BBB. Its goal is to promote informed giving and charitable accountability by evaluating and accrediting charities that solicit donations on a national level. Nonprofits must meet specific governance, effectiveness, finance, and fundraising standards to receive accreditation and the BBB Accredited Charity Seal.
WGA evaluates and awards accreditation for nationally soliciting charities. Charities that limit solicitation to a regional area may be evaluated by their regional BBB. Check here to see if your regional BBB evaluates nonprofits.
Why Nonprofits Should Apply for BBB Accreditation
BBB Wise Giving Alliance aims to increase donor confidence and trust in charitable organizations. Individuals can research organizations that they’d like to support, finding the following information:
The BBB provides more information than most third-party sources, with clear and detailed financial statements, board and staff compensation, and current program details. This transparency gives donors a better understanding of what the organizations do and how they fund their tax-exempt activities.
Earning donor trust is crucial for nonprofit organizations – perhaps now more than ever. Listen to this episode of The Nonprofit Podcast to learn more about the increasing importance of establishing trust and transparency, plus other fundraising trends.
The BBB WGA Accreditation Process
Theaccreditation process with the BBB stands out for its focus on details and consistent monitoring of participating organizations. In addition, there is no charge to complete the assessment and receive accreditation.
Should there be any areas of concern following an initial evaluation, BBB WGA does allow nonprofits to address them in a draft report before publishing it to the public.
BBB Standards for Charity Accountability
Charities must meet the following20 standards prior to achieving accreditation from BBB WGA.
Board Oversight – The board must oversee the CEO’s activities, the organization’s budget, fundraising practices, conflict of interest, and accounting procedures.
Board Size – The board must have a minimum of five voting members.
Board Meetings – The board must meet at least three times a year and provide opportunities for those with physical disabilities to attend.
Board Compensation – Voting board members are not compensated more than 10% directly or indirectly.
Conflict of Interest – No board or staff members can have conflicting interests in the organization resulting from business or personal relationships.
Effectiveness Policy – The organization must have a policy that calls for an assessment of its effectiveness to achieve its mission.
Effectiveness Report – The board must approve a submitted report outlining the organization’s performance and effectiveness in reaching its mission.
Program Expenses – The nonprofit must spend at least 65% of its expenses on programs.
Fundraising Expenses – The nonprofit must spend no more than 35% of its expenses on fundraising.
Accumulating Funds – The charity’s unrestricted net assets must not be more than three times the size of the past year’s expenses or three times the current year’s budget.
Audit Report – The nonprofit must make annual financial statements to all when requested. These statements must be audited if they raise more than $1 million per year.
Detailed Expense Breakdown – The organization’s financial statement must show what portion of expenses was used for fundraising, programs, and administrative activities.
Accurate Expense Reporting – The charity must accurately report its expenses.
Budget Plan – The board must approve the annual budget for the current fiscal year that outlines projected expenses.
Accurate Materials – Fundraising and informational materials must be accurate and not misleading. Fundraising material must honestly show how the organization spends donor funds.
Annual Report – The nonprofit must have an annual report available to all that includes its:
The past year’s program accomplishments
List of officers and board members
Total income in the past fiscal year
Website Disclosures – The nonprofit’s website must share the same information required on annual reports, along with its address and link to the most recent IRS 990 Form.
How donor information will be used
Contact information for the charity in order to review personal details
How to inform the charity that they don’t want their information to be shared
What security measures are in place
The organization must also share this information in written form at least once a year.
Cause Marketing Disclosures – The nonprofit must clearly disclose how it benefits from the sale of products and services. Promotions must disclose the following:
The portion of the sale that benefits the charity
The length of the campaign
Any maximum or minimum donation amount
Complaints – The nonprofit must respond promptly to complaints made to BBB Wise Giving Alliance.
Obtaining Your Seal
There is no charge to undergo BBB Wise Giving Alliance’s accountability assessment, and all accredited charities are featured on the BBB WGA website.
Accredited charities do have the option of obtaining a license to display the BBB Accredited Charity Seal on their websites and in promotional materials. There is, however, aprocess all organizations must follow to get licensing as well as an annual fee associated with the license.
Step 1 – Meet all 20 BBB charity standards
Nonprofits must first complete the online enrollment form and send it with the requested materials for review.
BBB WGA will review the information, prepare reports, and send invitations to complete additional reports as needed.
The results will be available on Give.org whether or not the organization gains accreditation.
Charities that meet all standards are called BBB Accredited Charities.
Step 2 – Sign the licensing agreement and pay the required fees
Approved charities that wish to receive and display a seal must sign a license agreement and submit annual fees.
Fees are on a sliding scale based on revenue received in the past year.
Step 3 – Continued compliance
Every two years, your charity must complete and submit a full questionnaire and supporting documents for review.
If BBB WGA determines that a charity no longer meets standards, it will terminate the organization’s participation in the seal program.
How to Display Your BBB Accredited Charity Seal
You did it! Your nonprofit has received accreditation from the BBB, and you’ve secured the licensing to share it. Now what?
Because BBB Wise Giving Alliance provides accreditation for national nonprofit organizations, there are some rules about who can use the seal. Once a national nonprofit receives a seal, it can only be used for national offices and websites unless the national office controls the governance, finances, and fundraising of its regional affiliates.
Accredited national nonprofit organizations can display the BBB Accredited Charity Seal on all websites and promotional material, including:
After you receive notification from the BBB that you can share the seal, be sure to announce your accreditation to your supporters. Many donors will be unaware of the importance of this seal, so it’s essential to share what qualifications you met to achieve this status.
Pro tip:Place the BBB seal on your donation page for high visibility and to boost donor trust.
Donorbox makes it easy to showcase your BBB Accredity Charity seal by adding it directly to your Donorbox donation form. Learn more and find a step-by-step guidehere.
Earning accreditation from the BBB Wise Giving Alliance is a hallmark of credibility for nonprofits. The BBB’s rigorous standards and transparency provide organizations with the standing they desire. Embracing BBB accreditation is not only a badge of honor; it is a testament to your dedication to serving your beneficiaries and donors.
We’ve written several articles to help your nonprofit meet and uphold these standards. Bysigning up to receive weekly tips and resources, you’ll be taking a significant step toward fulfilling your mission.
Visit our website to see the various ways Donorbox’s powerful suite of fundraising tools can also help you build donor trust and bring in more donations.
Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.