Question: Hawaii Public Radio recently won national accolades for the efficiency of its fundraising and underwriting operations as well as sound fiscal management, but not every nonprofit can attain such recognition. How important is it, then, for local nonprofits to register and maintain a clean track record with the Better Business Bureau?
Answer: It’s important for people to realize that the nonprofit sector plays a significant role in the social and economic lives of Hawaii’s people. It provides services ranging from health care to education, human services, public safety and arts and culture. Given the importance, my sense is that people need information about the nonprofits to make wise choices, and so that’s the role of the Better Business Bureau.
I would tell consumers and donors to look at all available information (about charities), including the IRS, Charity Navigator, the American Institute of Philanthropy, Guidestar, and of course locally, there’s the Attorney General (Charities Program Administrator) Hugh Jones, who provides insight with regard to making sure charities fund-raise properly and register appropriately, and then there’s us. I think we provide a comprehensive look for donors to get information about charities, and that comprehensive information, when tied with other sources, gives a complete view, and a level of comfort in helping to decide whether to donate or not.
Q: How much does the process of accreditation cost for a nonprofit?
A: In money terms, we don’t charge. It does take some time and effort to get the information together so that the nonprofit can meet the 22 standards.
We look at a charity, and if it doesn’t meet the criteria, we do not slam the door on it. Where it needs help to get information, we try to give as much assistance as possible. The whole notion is that we want to make sure that the information provided to the donor can be trusted.
Q: Is the registration process similar to that for businesses, and what must a nonprofit do?
A: I would think it’s a little more demanding than it is on businesses.
Q: Is there a renewal process, and how often is it required?
A: For accreditation it is once a year.
Q: Are there nonprofits that may be too small or too large for BBB consideration?
A: I’m not sure about too large, but I think being too small has to do with being able to gather up the policies and things of that nature (necessary for accreditation). Nonprofits are known for living on the edge with regard to resources, and the smaller they are, the more they do that. They may not be designed to gather all that information.
Q: How does BBB Hawaii hold nonprofits accountable? Is it the 22 steps alone?
A: It’s by being accredited. When you pass the 22 steps for accreditation, you come away with that hard-earned accreditation, and then you can request to be part of the seal program, which shows people you are accredited.
Q: What is the seal program?
A: It has to do with purchasing a seal, and it shows charities have met all the standards.
Q: So the seal could be a window sticker, or an image to include on letterhead, or a website?
A: Exactly.
Q: How many nonprofits are currently listed with BBB Hawaii?
A: I think we have 151 in our records, and somewhere on the order of about 35 to 40 are accredited.
Q: In this day and age of information access via the Internet, user-generated online reviews of consumer experiences and the like, is retaining a good rating with the BBB still relevant?
A: The question we constantly ask ourselves is, Are they trustworthy, are the reviews trustworthy?
They have a purpose, and I’m not sure I would say the purpose is designed to give donors great comfort as to whether or not a charity meets standards. (Accreditation) will certainly send a signal of transparency to the donors.
Unlike Angie’s List (which offers user-posted information with a paid subscription), we research our answers.
One thing people don’t know about us is that we decline businesses and revoke memberships when businesses don’t meet our standards, and I don’t think I can say that about a lot of places.
Q: Has a nonprofit’s accreditation been revoked in recent history?
A: Rather than declining accreditation, we realize the organization is going to fall short. If it gives up trying to gain accreditation, we’ll encourage it to try and stay with it, and if it can’t, that’s understandable.
Q: Is accreditation by the BBB and certification by other organizations that rate nonprofits more important than ever?
A: The landscape has changed considerably over the last few years for nonprofits. Where they were once funded to some extent by government. I think that’s becoming a tougher access point. And so, at least when I open my mail at home, I find more and more appeals from nonprofits who are after the private dollar now, and in doing so, I think donors and consumers are interested in how they spend their money, whether (nonprofits) achieve their mission. By looking at (IRS Form) 990, you can get an idea of how responsible a charity is, but you want more information about that, such as governance, whether they are achieving their mission. To allow any third party to take a look (at the nonprofit’s financials), in my mind, says a lot about the charity, that they allow the third party to come in, take a look, and print or publish the results.
——— Interviewed by Erika Engle
