Talk:CharityWatch

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Untitled[edit]

Recently User:ChicagoAIP has been editing here in an apparent attempt to "sanitize" some of the criticism against AIP, apparently contrary to WP:COI and WP:NPOV. Any further edits of this nature by this user should probably be reported to the administrator's noticeboard for verification. Mervyn Emrys (talk) 23:54, 14 June 2009 (UTC)

AIP's Edits[edit]

The American Institute of Philanthropy (AIP) monitors and edits this page from time to time under the user names ChicagoAIP and Charitywatchdog. We welcome legitimate criticism as we have full faith in our rating criteria and believe that it outweighs the majority of criticisms leveled against us. We do, however, make occasional edits to criticism when it does not genuinely reflect the nature of the source material or is improperly sourced. As a watchdog organization we are critical of some charities and, in turn, those charities may be critical of us. As with any Wikipedia page, we hope readers consider the reliability of the source material for all information on this page.

We strive to edit with a neutral point of view, meaning we do not aim to self-promote and we sometimes edit unfair criticism and erroneous information if they are not backed up with source material. Ideally this page should give members of the Wikipedia community a balanced summary of AIP and what we do so they can make an educated decision about AIP’s research, ratings and overall role as a charity watchdog.ChicagoAIP (talk) 21:23, 22 June 2009 (UTC)

Clever edits to this article by AIP proponents have frequently gone far beyond the characterization presented here, and have often violated WP:COI and WP:NPOV. Claims to the contrary are not supported by the evidence presented in the "History" section of this page. Their intent is clearly to "sanitize" and "spin" the language in a manner most favorable to AIP. If its adherents cannot tell the difference, perhaps they should be banned from editing on this page? Mervyn Emrys (talk) 14:56, 26 July 2009 (UTC)
I do not have a dog in this fight, but I think it would be useful for AIP's critics here to provide concrete details of alleged violations. Speaking of unspecified "clever edits" to the article -- and implying that readers should go through the history themselves to look for them -- is less than helpful. Please provide specific examples of abusive edits. Nandt1 (talk) 13:13, 18 April 2011 (UTC)

Unable to verify sentence within source[edit]

I am unable to verify the following sentence in the source material provided:

Paralyzed Veterans of America asserts that the criticisms leveled here against charity watchdogs all apply to AIP.[33]

Can someone point me to the page where Paralyzed Veterans of America (PVA) says this? I am unable to find mention of PVA anywhere in the source material.ChicagoAIP (talk) 19:25, 26 June 2009 (UTC)

It was Vietnam Veterans Memorial Fund, not PVA. Correction made in text. Mervyn Emrys (talk) 14:52, 26 July 2009 (UTC)


Bias[edit]

I came to the talk page because it seemed heavily biased and not npov. I was certainly not surprised that it has been found that aip has been editing this page. I would suggest that someone should go through this article piece by piece and fix it. just my own humble opinion Seeasea (talk) 18:46, 15 October 2009 (UTC)

Neutral Point of View[edit]

This article still suffers from neutrality issues. Many of the "statements" made are promotional language from the AIP website. For examples, see the introductory paragraph where I noted a neutrality issue, and the first sentence in the About section, which read "..to identify charities that are financially efficient, and ones that are not..." This implies that AIP's standards for financial efficiency are the only standards out there, or that AIP has a final say in whether or not a nonprofit is financially efficient. I reworded this sentence to make it more neutral.

Additionally, much of the Criticisms section is written like a rebuttal. Criticisms are provided, but they are then refuted (with statements that begin "However,....). These rebuttals are sometimes supported with "citations" that linked to an article written by AIP's founder on AIP's website. I removed one such citation that appeared in three or four places; I'll try to find better citations in the near future. I will also come back to do more work on this section in the future.

Finally, I wonder if "Criticism of AIP and other charity raters methodology" is an appropriate section heading. Shouldn't it just be "Criticism of AIP's methodology"? If there is a larger topic about charity raters and their methodology, should it be its own article - not discussed within the AIP article?

Since there seems to be some controversy about who has been editing this article in the past, I'll note that I read an article in the NYTimes about Livestrong, and they mentioned Charity Watch, so I came on to read more about them. I don't work for or have a stake in a nonprofit that is evaluated by Charity Watch, although I do work in the sector. BklynRobbi 13:07, 18 October 2012 (UTC)

I agree: "Criticism of AIP and other charity raters methodology" shouldn't include criticisms of other organizations, particularly when AIP is one of the organizations making such criticisms. — Preceding unsigned comment added by 98.169.95.69 (talk) 00:48, 28 June 2013 (UTC)

External links modified[edit]

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External links modified[edit]

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Criticism section[edit]

Can't believe everything becomes a target for partisan bickering... Criticism section, as it existed, was solely to raise largely nonnotable complaints by people with an obvious reason to have a contrary viewpoint (either rated poorly or for political reasons). According to NPOV policy, things must display relevance so as not to give undue weight to fringe views. Having a criticism section twice as long as entire rest of article definitely violates that. This group is frequently in the news, but criticism aren't. Weighing that makes it doubtful that a criticism section should even exist. Instead of just deleting it outright, I moved the POV section to the talk page for improvement before it returns to the article.

For example, starting the entire section with a highly partisan first paragraph is bizarre. We need a good source, but instead the first links just go to homepages of organizations that supposedly can say something to back up some part of the sentence, but not the statements as a whole, and not without massive personal digging. This is essentially an editor's personal view with citations provided to give the appearance of reliability, but which are not in the URLs provided and which have not in any way been measured against the notabilty of the overall topic. They have no encyclopedic reason for being here, just an advancement of opinion of editor.

Second paragraph starts the same way, with a blind link to an IRS document that supposedly supports the personal opinion mentioned, but not that any notable source has actually stated that opinion.

Many places throughout the section cite a note so we think it has a source, but reading the note actually says source was removed for being biased - then why even leave the statement if it has no sources??

Out of all that we maybe have a case for a rewrite of the fourth paragraph for inclusion, as at least it has real sources, and maybe the seventh. Linking to a main page for an organization and claiming they make an argument is not a source for that argument, it is falsifying sources. We need a source saying EXACTLY what the article says. It currently reads like a hatchet job on the charity for no reason except *personally* trying to discredit it. This is not your blog. Citation needed, and relevance established, please. 2601:844:4202:E280:4D41:47B8:48D6:75D3 (talk) 18:55, 8 October 2016 (UTC)


Criticism[edit]

The criticism from low-rated charities is the claim that AIP’s rating system does not follow Generally Accepted Accounting Principles (GAAP) or rules for reporting financial information on the IRS tax Form 990. These groups posit that if AIP took the figures as reported in these financial documents, their ratings would be outstanding.[citation needed] GAAP reporting rules provide guidelines for a charity to report its financial activities and these reporting rules do not measure or claim to measure how efficiently an organization is raising and spending donated money.[1][2]

Charities have latitude in how they choose to report activities within IRS and GAAP standards.[1][2][3] In addition, a charity can spend as little as 1% of its budget on its programs and be in compliance with GAAP and IRS reporting requirements.[4] Direct mail and telemarketing solicitations that contain educational messages and other income-generating activities that accounting rules allow charities to report as program costs,[5] are not considered to be program services by many donors.[6] For these reasons AIP analyzes and makes adjustments to the audits and tax forms of some charities for consistency and to better reflect the goals of many donors who want their donations to be spent on bona fide programs.[7]

Another criticism is that national charity rating organizations like Charity Navigator, BBB, and AIP do not rate the quality of charitable programs.[citation needed] AIP encourages donors to consider a charity’s program accomplishments in relationship to the resources it receives.[7]

Studies of charity watchdogs’ methods have raised concerns about the validity of their ratings and suggest they may not be reliable sources for charity ratings.[8] However, such studies frequently lack independence because they are often published by nonprofit consultants who are paid by the charities that watchdogs oversee or are critical of.[9] AIP rates nearly 550 charities.[10] AIP states on its website that the quality and in-depth level of analysis it performs is time-intensive and limits the number of groups that it is able to review.[11]

Charity rating organizations have been criticized by philanthropy experts for the validity of their evaluation methods and their conclusions. A study developed by nonprofit consultants[9] reported in the Stanford Social Innovation Review—an award-winning magazine covering successful strategies of nonprofits, foundations and socially responsible businesses—gave the opinion that some watchdog groups:

  • Rely too heavily on simple analyses and ratios derived from poor-quality financial data;
  • Overemphasize financial efficiency while ignoring program effectiveness; and
  • Do a poor job of conducting analyses in important qualitative areas, such as management strength, governance quality and organizational transparency.

Specifically, this study gave the opinion that AIP’s shortcomings include a “gotcha” mentality and lack of transparency, saying that “AIP is not afraid to fail an organization; in fact, they specifically aim to review nonprofits they feel aren’t spending wisely or performing ethically, to help educate the public.” [8] The study quotes AIP president Daniel Borochoff saying, “We’re really looking at the numbers and what they mean, not just running [tax form] 990 inputs through an equation…At times we actually find that a nonprofit is selling itself short in the way they report numbers, and help them fill out their [tax form] 990 more accurately, but more often we see nonprofits misleading potential donors with the way they report their financials. You have to ask yourself why the other rating organizations aren't seeing the same really bad things going on with the numbers at some of these other charities.” [8] With respect to AIP’s transparency, the report states that “A donor sees the [charity’s] score but only limited explanation, which can cause more harm than good.” The study goes on to say that “While it is true that nonprofits have wide latitude in completing their 990’s (and many go to great lengths to misrepresent their financial information), it is difficult for a donor to understand what specific adjustments AIP made to a given nonprofit’s rating and why.”[8]

On the positive side, the report states that AIP “recognizes the limitations of the 990 and thus develops its financial health ratios by analyzing a charity’s audited financial statements. AIP’s small staff of analysts looks closely at specific calculations, including how nonprofits allocate telemarketing costs, which are often labeled 'education and outreach,' and in-kind contributions which they assert are overvalued, among other practices they think nonprofits use when preparing their [tax form] 990 to cast a more positive light on their financial position." [8]

The study said:

A more effective nonprofit rating system should have at least four main components: improved financial data that is reviewed over three to five years and put in the context of narrowly defined peer cohorts; qualitative evaluation of the organization's intangibles in areas like brand, management quality, governance, and transparency; some review of the organization's program effectiveness, including both qualitative critique by objective experts in the field, and, where appropriate, "customer" feedback from either the donor or the aid recipient's perspective; and an opportunity for comment or response by the organization being rated.[12]

A second study, Rating the Raters: An Assessment of Organizations and Publications that Rank/Rate Charitable Nonprofit Organizations,[13] provides a separate assessment of AIP, Charity Navigator, Better Business Bureau Wise Giving Alliance, and other charity information services. The major findings are:

  • Approaches and criteria are not the same. The methodologies and criteria used vary significantly among the various rating and ranking organizations.
  • Evaluation criteria may not be readily apparent. Not all nonprofit rating and ranking groups make it easy for the donor to determine the evaluation method and criteria used.
  • Evaluators may use criteria that are overly simplistic. Simple financial ratios and/or measurements that apply in some circumstances may not apply in others.
  • Evaluators focus on financial measurements and overlook program effectiveness. Financial "efficiency" is assessed by most third-party ratings groups as a percentage of contributions received. This tends to be their primary focus.
  • Competence of the evaluator is critical and difficult to determine. It is virtually impossible for donors to determine the relevant credentials, expertise and experience of the rating organization's staff.
  • Evaluators often derive revenue as a result of their rating reports, creating a potential conflict of interest and questioning whether these groups are motivated by the desire to inform potential donors or by the media attention that improves their revenue stream. AIP, for instance, charges a $3 fee for a sample copy and requires $40 membership, which it uses to fund research, as a condition for receiving its annual rating reports.[14] The BBB charges charities it reviews up to $15,000 to use its charity seal to publicize their ratings.[15]

Some groups criticized by AIP, such as Paralyzed Veterans of America, have pointed out that they formerly met "all 20 criteria that the Better Business Bureau Wise Giving Alliance establishes for charities, including that a charity's fundraising costs not exceed 35 percent of contributions, a common standard."[16]

According to AIP, its analysts "dig deep, carefully scrutinizing the individual finances of charities to give donors a clearer understanding of how their cash donations are being spent." AIP says that its ratings are the most stringent in the sector; that it is independent because over 95% of its support comes from small, individual donations; that it uses reliable information and treats charities consistently and fairly; and that it rates charities that other raters will not.[17]

  1. ^ a b "American Institute of Certified Public Accountants". Aicpa.org. Retrieved 2012-08-13. 
  2. ^ a b "Financial Accounting Standards Board". Fasb.org. Retrieved 2012-08-13. 
  3. ^ "IRS Form 990 Instructions" (PDF). Retrieved 2012-08-13. 
  4. ^ "Supreme Court of the United States, ''Madigan v. Telemarketing Associates, Inc.''" (PDF). Independentsector.org. Retrieved 2012-08-13. 
  5. ^ "How to Report a Joint Activity". Journal of Accountancy. 1998-12-15. Retrieved 2012-08-13. 
  6. ^ House Committee on Oversight & Government Reform, "Waste, Fraud, and Abuse" hearing, Daniel Borochoff Testimony, December 13, 2007, p. 4 Archived February 16, 2008, at the Wayback Machine.
  7. ^ a b Daniel Borochoff. "American Institute of Philanthropy, Rating Criteria". Charitywatch.org. Retrieved 2012-08-13. 
  8. ^ a b c d e Lowell, Stephanie, Brian Trelstad, and Bill Meehan. “The Ratings Game: Evaluating the Three Groups that Rate the Charities.” Stanford Social Innovation Review. Accessed January 25, 2011.
  9. ^ a b Social Innovation Review: About the Contributors: http://www.ssireview.org/about/our_contributors/. Accessed January 25, 2011.
  10. ^ The American Institute of Philanthropy A-Z List: http://www.charitywatch.org/azlist.html. Accessed January 25, 2011.
  11. ^ American Institute of Philanthropy FAQs: http://www.charitywatch.org/faq.html#cover. Access January 25, 2011.
  12. ^ Lowell, Stephanie, Brian Trelstad, and Bill Meehan. “The Ratings Game: Evaluating the Three Groups that Rate the Charities.” Stanford Social Innovation Review. Summer 2005, p. 43. Accessed May 16, 2009. [1]
  13. ^ National Council of Nonprofit Associations, Rating the Raters: An Assessment of Organizations and Publications That Rate/Rank Charitable Nonprofit Organizations [dead link]
  14. ^ Daniel Borochoff. "CharityWatch Charity Rating Guide and Watchdog Report". Charitywatch.org. Retrieved 2012-08-13. 
  15. ^ "Charity Seal Program Fee Schedule - U.S. BBB". Bbb.org. Retrieved 2012-08-13. 
  16. ^ Howell, Deborah. “A Veteran’s Charity Cries Foul.” Washington Post, February 24, 2008, p. B06.
  17. ^ Daniel Borochoff. "CharityWatch Mission Statement, Goals and More". Charitywatch.org. Retrieved 2012-08-13.