Governance & Transparency Benchmarks
CharityWatch evaluates certain criteria related to a charity's Governance and Transparency. Donors may want to consider a charity's willingness to be open and transparent with CharityWatch to be a good litmus test for determining its commitment to public accountability. It is also helpful for donors to know whether or not a charity reports having basic policies in place that may prevent self-dealing or fraud, and that may protect and encourage whistleblowers who want to report wrongdoing.
These factors do not affect a charity's letter grade rating, Program %, or Fundraising ratio, as CharityWatch believes it is important to provide donors with separate financial measurements showing how efficiently a charity raises and spends public dollars. However, only highly efficient charities that meet the below Governance and Transparency benchmarks are eligible to receive Top-Rated status from CharityWatch.
Meets Transparency Benchmarks.
|Provides Financial Information:|
To meet transparency benchmarks, a charity must post a complete copy of its most current, independent audited financial statements on its public web site. It must provide complete copies of its IRS tax form(s) 990 to CharityWatch upon request, and may be required to answer questions related to its financial reporting and/or provide additional documentation if such information is necessary for CharityWatch to complete a meaningful evaluation.
|Reports regularly & consistently monitoring & enforcing compliance with a written Conflict of Interest Policy:|
|Reports required, annual disclosure by officers, directors, and key staff of interests that could give rise to conflicts:|
|Reports having a written Whistleblower Policy:|
|Reports having a written Document Retention and Destruction Policy:|
|Reports providing copy of tax form to all board members prior to filing it with IRS:|
|Reports that financial statements were audited by an independent accountant:|
|Board of Directors||Yes||No|
|Reports at least 5 voting board members:|
|51% or more of voting board members reported as independent:|
|Reports documenting minutes of board and board committee meetings:|
CharityWatch reviews a charity's tax form to see if it reports having certain policies in place, a sufficiently large and independent governing body, and other basic governance information that serve as standard benchmarks for large charities of national scope or interest. Meeting such benchmarks, in the opinion of CharityWatch, should be viewed by donors as the bare minimum standard rather than an assurance that a particular charity is well-governed. For example, a charity may report that is has a whistleblower policy, but simply having a policy in place does not promote good governance if the policy is weak or is not routinely enforced. Donors should also keep in mind that many charities that meet basic governance standards do not raise and spend the public's donations efficiently or effectively.
CharityWatch urges donors concerned about a particular charity's governance to conduct additional research.