CharityWatch is America's most independent and assertive
charity watchdog. Rather than merely repeat charities' self-reported finances using simplistic
or automated formulas, we delve deep to find the real story of how efficiently
charities use your donations to fund the programs you want to support. Founded in 1992 as
the American Institute of Philanthropy (AIP), CharityWatch continues
to expose nonprofit abuses and advocate for your interests as a donor.
The Chronicle of Philanthropy
published several of our triumphs in an in-depth profile of CharityWatch
& our president Daniel Borochoff: An
MBA's Sleuthing Skills Puts Charities on the Hot Seat.
The mission of CharityWatch, a nonprofit charity watchdog and information
service, is to maximize the effectiveness of every dollar contributed
to charity by providing donors with the information they need to
make more informed giving decisions.
To research and evaluate the efficiency, accountability and governance
of nonprofit organizations; to educate the public about the importance
of wise giving; to inform the public of wasteful or unethical practices
of nonprofits and provide recognition to highly effective and ethical
charities; to advise CharityWatch members
and conduct special investigations and evaluations of nonprofits;
to expand and re-define our programs periodically to meet the continuing
challenge of keeping the contributor informed.
no to robo-ratings. All charity ratings are not alike. Other
charity information services use simplistic or automated systems
to generate ratings. CharityWatch analysts dig deep, carefully scrutinizing
the individual finances of charities to give donors a clearer understanding
of how their cash donations are being spent.
CharityWatch ratings are considered
the most stringent in the sector. When a charity makes a claim
that it spends "90% on programs," donors often wrongly assume this
means $90 out of every $100 dollars they donate will be spent on
the charity's programs, and only $10 will go to overhead. This is
often not the case. Charities have wide latitude to include activities
in their program expenses that most donors would not consider to
be the bona-fide programs they are intending to support.
Other charity raters simply repeat or
repackage at face value whatever a charity reports without adequate
analysis of its finances or how it is operating. The CharityWatch
rating system is unique in that we carefully analyze a charity's
finances and make adjustments to better reflect the goals of most
donors who want their cash donations to be used efficiently. We
do not allow charities to count the funds they spend on direct mail
or telemarketing in their program spending, or to include large
amounts of undisclosed and often overvalued donated goods in their
expenses, even if their accountants allow them to do so.
CharityWatch is fiercely independent.
We do not charge the charities we review to be listed in our Guide
or for the right to publicize their rating, nor do we accept any
advertising whatsoever on our web site or in our publication. Our
board of directors does not include any heads of nonprofit associations
who receive their pay from the groups they are watching. Because
over 95% of our support comes from small, individual donations,
we have the freedom to speak openly and to be critical of the unethical
practices of charities, without concern for special interests cutting
CharityWatch uses reliable information
and treats charities consistently and fairly. The self-reported
information charities provide in their tax forms or solicitation
materials may not be the most useful source of information for donors.
Unlike some raters that rely on the tax form alone, CharityWatch
reviews a charity's tax form in conjunction with its more reliable
audited financial statements, which are produced by independent,
Certified Public Accountants outside of the charity. Audits often
include information that a charity chooses to not report about itself
in its tax form.
The rules governing charity financial
reporting leave a lot of room for variation, which results in a
great deal of information that is inconsistent, unclear, or even
incorrect. Sometimes a charity may be doing an outstanding job with
its funds but receive poor ratings from others due to computer-automated
or overly simplistic evaluations that do not take into account the
complexity of charity financial reporting and accounting rules.
CharityWatch rates charities that
other raters won't. CharityWatch is the only national charity
watchdog to evaluate social welfare groups that are not eligible
to receive tax-deductible contributions such as the ACLU, Human
Rights Campaign, League of Women Voters, NARAL Pro Choice America,
National Right to Life Committee, and Sierra Club. CharityWatch
also rates many religious charities such as the Salvation Army that
are exempt from filing a tax form with the IRS but that share their
audited financial statements with CharityWatch.
Bottom Line: With no SEC or federal
government watchdog, no investors who will sue if given false information,
and loose reporting rules, the nonprofit sector has little oversight
and much room for financial manipulation. CharityWatch digs deep
into the complex and often confusing financial reporting of charities
and issues easy to understand A+ to F letter grade ratings for donors
who want to know how efficiently their donations are being spent.
Chronicle of Philanthropy:
What Nonprofits Say About Spending and How Donors Respond
BBB Charity Ratings, Seal of Approval Under Fire
BOARD OF DIRECTORS
President and Founder
Daniel Borochoff has long been a strong and independent
voice for ethics and transparency in the nonprofit sector. He
founded CharityWatch, a nationally acclaimed charity watchdog,
in 1992 to address the need for research and analysis on charity
finances, fundraising practices and governance. CharityWatch,
originally named "American Institute of Philanthropy"
or "AIP," provides information on wise giving to thousands
of concerned individuals, foundations, and corporations. Borochoff
has over 25 years of experience as a philanthropic and financial
analyst. Thousands of newspapers, magazines, TV and radio stations
have covered his insights into nonprofit practices. He was a founding
board member of the Hearts and Minds Network and the ePhilanthropy
During times of crisis, Borochoff has been asked
by Congress to give critical and independent testimony. Borochoff
testified on the charities response to the survivors of
9/11 in 2001 and in 2005 he testified on the charities' response
in the aftermath of Hurricanes Katrina and Rita. CharityWatch's
research on veterans charities failing performance, while
wars in Iraq and Afghanistan rage on, triggered Congressional
hearings in 2007 and 2008 and Borochoff was again asked by Congress
Borochoff served on two task forces of the Financial
Accounting Standards Board that set accounting standards for charities.
He served as an awards panelist for the Society of Professional
Journalists (SPJ), Independent Sector, and the Community Arts
Assistance Program for the City of Chicago. He has been a speaker
at national SPJ conferences, the National Association of Attorneys
General/NASCO conference, the Independent Sector annual conference,
and the American Institute of CPAs Not-for-Profit Financial Executive
Forum. He has an MBA from Indiana University and a BS in Accounting from Syracuse University.
President and Founder, Forestree, Inc.
New York, New York
Clinton E. Berry
Worldwide Procurement, PepsiCo
Somers, New York
William W. Newbill, Esq.
Public Sector Attorney
Newbill practices law in the public sector in Dallas,
Texas, and previously worked as a social worker and in public
welfare programs with low income and minority populations in Tulsa,
If you would like to obtain the IRS 990
tax form for CharityWatch (and many other nonprofits), please visit
the website of The
Foundation Center. Because our name change to "CharityWatch"
is so new, it may be easier to locate the document by using our
original name, "American Institute of Philanthropy" in
the search field. Please check our Links
page for additional resources.
most recent audited financial statements for American Institute
of Philanthropy dba CharityWatch
(PDF documents require Adobe®
Acrobat® Reader to view.)
Institute of Philanthropy dba CharityWatch is
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received by American Institute of Philanthropy/CharityWatch and
dedicated to the charitable purpose during the last reporting period
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of Philanthropy/ CharityWatchs latest annual report may be
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American Institute of Philanthropy dba CharityWatch
is a 501(c)3 nonprofit organization, IRS EIN #33-0491030.