Watchdog's 'Top 10 Transparency Dodgers' List Has Some Serious Flaws

Better Business Bureau Wise Giving Alliance (BBBWGA) released a list of the top 10 charities, ranked based on fiscal year 2014 contributions, that did not verify their transparency by completing the watchdog's evaluation.

BBBWGA dubbed the charities on its list "transparency dodgers."

"A charity’s failure to disclose important information relevant to BBBWGA evaluation should be a red flag for donors, and the BBBWGA urges donors to avoid charities that dodge transparency," BBBWGA said in a press release.

Here's the list:

1. Dana-Farber Cancer Institute
2. Fred Hutchinson Cancer Research Center
3. Teach For America
4. NeighborWorks America
5. John F. Kennedy Center for the Performing Arts
6. National Fish and Wildlife Foundation
7. City Year
8. United States Holocaust Memorial Museum
9. Pact
10. Local Initiatives Support Corp.

There are some problems with this list, however. Critics have pointed out that BBBWGA requires extra work on the nonprofit's part, whereas other big watchdogs, like Charity Navigator and Charity Watch, rate and score organizations based on publicly available documents the charities already have submitted to the government.

When comparing these 10 charities to their respective Charity Navigator ratings, the "red flags" often appear as three- or four-star ratings. Of the five rated, five have four stars and two have three stars. The other three are ineligible due to government funding, revenue threshold or nonprofit status. Teach for America has maintained its four-star rating since Charity Navigator's creation in 2001 and currently has an accountability and transparency score of 96.00, and an overall score of 94.91. Unlike Charity Navigator, BBBWGA requires national charities to complete evaluations that address 20 standards measuring charity governance, effectiveness, finances and fundraising.

“Transparency is the mark of a well-run charity,” said H. Art Taylor, CEO and president of BBBWGA. "Failure to disclose important operations information demonstrates a complete disregard to the importance of trust.

"The majority of charities agree to an evaluation, and it’s concerning when charities refuse," he continued. "Failure to disclose information isn’t just about snubbing the BBBWGA reporting process—these charities are snubbing the people and donors who are asking BBBWGA to verify the charity’s trustworthiness."

BBBWGA's evaluation consists of more than 250 questions, according to NBC News. BBBWGA sent each charity three letters requesting the information in a two-month period, with the latter one sent via certified mail, Bennett Weiner, CEO of BBBWGA, told the media outlet. Last month, the watchdog reached out one more time to seek participation and warn of an upcoming press release that would list noncomplying charities.

Taylor claimed his organization was more trying to encourage than shame charities to participate in BBBWGA's process.

"We don't know if they're good or bad," he told NBC News. "We don't know anything about them because we don't have the information we need."

All 10 charities provided written responses about BBBWGA to NBC News. Six of them—Nos. 3, 4, 5, 6, 7 and 9—claimed the watchdog never contacted them.

"We always welcome outside review and pride ourselves on transparency and full disclosure, as required by law and our congressional charter," Jeff Trandahl, executive director of the National Fish and Wildlife Foundation, wrote to NBC News. "This appears to be more of a media stunt than an effort to gain information."

Three others—Nos. 1, 2 and 8—declined participation because they feel their information is easily accessible for potential donors and watchdogs.

"Transparency in all forms is always of foremost concern to Dana-Faber Cancer Institute and to our donors," Ellen Berlin, the institute's director of media relations, wrote to NBC News. "Dana-Farber is currently reviewed by the IRS, attorney general's office and other regulatory bodies, and we go above and beyond to comply with all of their requirements so that we can be transparent to all."

The final group—Local Initiatives Support Corp.—did not see value in participating since less than 1 percent of its contributions come from individuals.

"It is unfortunate that BBBWGA chose this strategy to try to force reputable organizations to participate in its service," a spokesperson for the organization wrote to NBC News.