Thou Shalt Not Be Accountable Is Not a Commandment

This article was originally published on 12/01/2008. It was updated on 9/20/2023 to include our dba name, CharityWatch, and links to updated articles about St. Joseph's Indian School and the Salvation Army. 

Unresponsive to CharityWatch's attempts to obtain updated financial documents, St. Joseph's Indian School (SJIS) will now join the ranks of other "?" rated charities, such as Southwest Indian Children's Fund/Don Stewart Association, among others. In most cases, charities claiming a religious aspect to their missions are not legally required to publicly disclose information that many other charities must report to the IRS each year. Donors wanting to know how such a charity spends its contributions, compensates its employees, or even who sits on the charity's board of directors may be at a loss if the charity does not want to willingly open its books to outside scrutiny.

St. Joseph's Indian School received an F rating from CharityWatch based on our analysis of its 2004 audited financial statements for spending only 34% of its budget on bona-fide programs that do not include direct mail or other fundraising appeals. These financial documents were sent to us in 2005 by a CharityWatch member who had been a donor to SJIS and had requested and received these documents directly from the charity. The member also forwarded to CharityWatch a mail solicitation she received from the charity dated July 1, 2005 which contained multiple appeals for funds, a keychain, and information about SJIS's programs. Without access to 2005 financial information, we do not know how much SJIS spent on such solicitations in that year. In the prior year, the group spent "$13,819,076 for informational materials and activities that included fund-raising appeals," according to its 2004 audit. [NOTE: Read CharityWatch's updated article about St. Joseph's Indian School].

Donating to charities with religious exemption status does not always have to be an act of faith. For example, some groups with religious exemption, such as the Salvation Army, make their audited financial statements available to CharityWatch and others upon request. Most major religious charities perform valuable public services and make an effort to be accountable to the public. It is a shame that some charities with religious exemption do not willingly open their books to the public so that donors can see how their contributions to charity are being used. Requiring that a charity provide a copy of its most recent audited financial statements as a condition of your donation is one option for donors uncomfortable with giving to a charity that operates with little public accountability.

Call to Donors: Do you want to know how charities rated "?" by CharityWatch due to religious exemption stack up against other nonprofit organizations? Ask the charities for a copy of their most recent audited financial statements, including notes, and forward them to CharityWatch for our analysis. In this way you can help CharityWatch to make charities more accountable for how they spend your contributions.