Wednesday, September 14, 2016

Should the media have a role in rating charities?

No one wants to be ripped off in the name of charity.

Everyone has heard of charities whose practices may be or are questionable. When the situation is serious enough it makes the news.

In response to public concerns several institutions exist that "rate" charities. The information published by these organizations is accessed by individual donors, foundations, employees, volunteers, independent contractors, and even private and government watchdog groups.

As a freelance grant writer and consultant, I can attest that if you aren't rated by one of these organizations, or you have received a poor rating or some sort of alert it will impact your fundraising capabilities.

How they work.

The information available to the public on rating sites can range from simple proof of nonprofit status to an actual assessment of the legitimacy of the organization and its practices.

Spoiler Alert!  Almost without fail, these private, usually nonprofit organizations have a minimum revenue qualifier that determines which charities they will rate.  For most it is in the one million dollars and up range, but at the very least it requires the filing of a 990, not just the postcard.

For that reason, you are not likely to find your local food pantry or animal rescue on some of these websites.  Some, like GuideStar, will list the basics even for smaller charities, which at least allows you to be sure they are registered.

You can also search the IRS website for verification of approved status, the general web for anecdotal reviews or consult your local Better Business Bureau.

I don't recommend social media sites like Facebook as a single source for rating a charity, but they may flesh out the dry facts available elsewhere.
But who rates the raters? Are these just online collectors of  raves and rants by fake reviewers, disgruntled employees, clients or donors?

For the answer to that you have to ask yourself a few questions. Questions such as: how did they come to be in existence, how reliable is their information, and what criteria do they use to assign ratings?

One well known organization is Charity Navigator or CN so let's see what they have to say about their process.

Charity Navigator has been in business as a nonprofit since 2001 according to their website, arising out of a perceived need to shed light on the inner workings of charities.

Originally conceived by Pat and Marion Dugan, whose story is available on the website, CN is a bellwether rating organization.

It is definitely one of the top three starting points on my list of charity verification sources.

On September 1, Charity Navigator instituted a new rating scale.

The website goes into great detail about their methodology. You can view it here.

I mentioned that CN is one of several sources I use before deciding whether to agree to offer my services, as well as my own donations to a nonprofit.

One thing has always caused me to view some of the information  available throughout the industry with a squinty eye, and the CN website details it perfectly.

That is the way media reporting is included in a list of rating criteria alongside nonprofit experts, seemingly assigning those reports the same level of credibility as those done by experts.

For instance, one of the ways to get a poor rating is to have an employee or official who  embezzles from your charity, a story often first reported by a news agency.

While some might see that as blaming the victim, there is sound reasoning behind it.

It goes to the ability of the charity to monitor its use of funds by having adequate financial security safeguards in place and actually using those safeguards to prevent theft.  It addresses the character of the organization itself.

But it also goes to the accuracy of the information.

CN freely admits that it does not, and indeed has no ability to, assess the accuracy of the media information it uses.

For me that's a cautionary flag.

Yes, where there is smoke there is usually fire, and news reports are definitely a smoke signal.

Conversely, one has only to look at the media's conduct during this election season to have serious concerns about the ethics, veracity and credibility of the media.

For that reason, if the allegation of financial mismanagement or criminal activity is one of the major knocks against the organization being rated, I tend to hold my opinion in abeyance until I can ascertain if it was an isolated incident in an otherwise sterling record.

I would also want to know whether anyone followed up with actual arrests and/or prosecution of the persons involved and whether there is any past history or indication of financial malfeasance or incompetence.

Charities, even more than Caesars wife, have to be above reproach and the larger and more visible they are the less leeway they have.

Still, accusations usually make the front page, while any retractions or exonerations are usually  buried on page 52 under last week's stock market report.

I am not saying that you or CN should disregard this type of information. I don't, and neither should you.

I am saying that media reports should be vetted as thoroughly as the charity before it they are used as a criteria for either approval or condemnation.