bluestrike.org Charity Watchdogs 1

Charity Watchdogs: Managing your Organization’s Profile and Ratings

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Thanks and welcome to the webinar!

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BLUE STRIKECharity Watchdogs: Managing Your Organization’s Profile and Ratings

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WELCOME

• This is a 45-minute webinar to help organizations manage their profile and ratings with charity watchdogs groups.

• It has been developed for organizations engaged in advocacy, civic engagement, policy work, and public interest law.

• The information and call to action are intended for fundraising staff and executive directors.

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Blue Strike: Inspiring Support for Civic Engagement

Mary Dillon Kerwin

Presidentmarydillonkerwin@bluestrike.org

(703) 399-0855

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AGENDA

Today, we will cover:

Section 1: Who are the watchdogs?

Section 2: Why do they matter?

Section 3: Three steps to improve your ratings.

We will wrap up by 2:00 PM.

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SECTION 1: CHARITY WATCHDOGS WHO ARE THEY?

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Who are they?

The top four:

Better Business Bureau Wise Giving Alliance

Charity Navigator

CharityWatch (a.k.a American Institute for Philanthropy)

Guidestar

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Change is afoot

Guidestar has added new levels of transparency and seals. More changes are coming.

Charity Navigator has begun adding impact measures to its profiles.

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SECTION 2Charity Watchdogs: Why are they important?

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Why are they important?

Donors, foundations, corporations, and the media consult these sites for objective information about your organization.

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Donors look up your profile

About one-quarter of people do some kind of research before deciding to give.

Association of Fundraising Professionals

Hope Consulting (2010)

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Donors make giving decisions based on ratings

A higher rating has been shown to translate into higher revenue.

Lower ratings may discourage people from giving to you.

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Research on rating impact

Brown, Meer, Williams (2014) found “evidence that subjects' choice of charity is impacted by third-party evaluations.” Social Distance and Quality Ratings in Charity Choice

Grant (2010) estimates “that one more star increases contributions by 3 to 8%. The Response to Third-party Rating: The Effects on Charitable Giving.

Chhaochhari and Ghosh(2008) found that charities with the highest ratings received 16 percent more charitable donations than those with the lowest ratings.

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They affect your brand

You don’t have time to explain a bad rating to everyone.

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They impact morale

Your staff and volunteers deserve recognition for the good work they do.

Your brand should reflect your commitment to your mission.

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SECTION 3How to improve your ratings

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Call to action

#1: Pay attention to how you spend money and how you count the money you spend.

#2: Hire an auditor who understands the ins-and-outs of the charity watchdog game.

#3: Educate your board and staff about the importance of ratings and profiles.

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Action #1: Spending

Pay attention to how you spend money and how you count the money you spend.

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Review spending

Take a hard look at your spending.

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Reduce overhead

Check out Blue Strike tips for reducing overhead.

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Allocate Carefully

Make sure you’re not putting program expenses into administration and fundraising.

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Good Looking Pie Charts

Revenue

Contributions 65%

Foundations 15%

Planned

Gifts 13%

Other 7%

Expenses

Program84%

Fundraising8%

Administration7%

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Union of Concerned Scientists

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Action #2: Auditor

Hire an auditor who understands the ins-and-outs of the charity watchdog game.

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IRS Form 990

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Women’s Resource Center of Monroe County

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Financial statements

Year end financials Audit IRS 990

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IRS 990 Part IX Page 10

The audit’s functional expense statement informs your expense sheet on the 990.

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Review draft of audit

Leave time for back and forth with the auditor.

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Action #3: Board & Staff

Educate your board and staff about the importance of ratings and profiles

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action #3: board & staff

• Put it on board agenda.

• Explain the basics.

• Show comparisons.

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Board Governance and Oversight

•Establish audit committee•Pass needed policies•Pay attention to executive compensation

•Review 990

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Charity Navigator Accountability and Transparency Measures

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Charity navigator

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Board source templates

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Better Business Bureau Form

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Assign staff

Assign a staff person to update profiles and monitor changes to the ratings systems.

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Tame the watchdogs

Deal directly with the staff at the watchdogs. They are sensitive to criticism.

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Materials match your work

Make sure your materials accurately describe your accomplishments and activities.

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Your call to action

#1: Pay attention to how you spend money and how you count the money you spend.

#2: Hire an auditor who understands the ins-and-outs of the charity watchdog game.

#3: Educate your board and staff about the importance of ratings and profiles.

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ADDITIONAL RESOURCESResources, Research, and Articles

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Other Resources for Improving your Rating

Internal Revenue Service

http://www.irs.gov/instructions/i990/ar03.html

Venable Law

https://www.youtube.com/channel/UCTrOm1a4P2Ue00TA3hCl3xQ

Board Source https://www.boardsource.org/eweb/dynamicpage.aspx?webcode=BDSOnlineStoreLanding

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Research

Social Distance and Quality Ratings in Charity Choice, Alexander Brown May 2014

http://econweb.tamu.edu/jmeer/Brown_Meer_Williams_Charity_Choice.pdf

The Response to Third-Party Ratings, Laura Ellyn Grant 2010

http://www2.bren.ucsb.edu/~lgrant/grant_jmp_F2010.pdf

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More about the Watchdogs

Charity Rater Part I: Charting the Bad and the Bad

http://www.blueavocado.org/content/charity-raters-part-i-charting-bad-and-bad

Charity Rater Part II: Managing Your Ratings by Blue Avocado

http://www.blueavocado.org/content/charity-raters-part-ii-managing-your-rating

Stanford Social Innovation Review

http://www.ssireview.org/articles/entry/the_ratings_game

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Previous Blue Strike Webinars

Donor Advised Funds: What You Need to Know with Ruben Orduna

Sending Your Executive Director on Tour 

Introduce Your Board to Fundraising

Simple Tips for Publishing Your Donor List

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Upcoming Blue Strike Trainings and Webinars

Get Ready, Here It Comes . . . Year End Fundraising

Tuesday, August 11, 2015

8:30 to 10:00 AM (Washington, DC)

Recapturing Lapsed Donors: Strategies for Getting Them Back

Tuesday, September, 2015

1:15 PM ET (12:15 PM Central/10:15 am Pacific)

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BLUESTRIKE.ORG

Thank you for participating today!

From Mary Dillon Kerwin

President of Blue Strike

Check out our other slide shows at http://www.bluestrike.org/resources

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BLUESTRIKE.ORG

THANK YOU!

July 14, 2015