Charity Watchdogs

Charity watchdogs, whether as standalone organizations, commentators or journalists, provide a potentially useful resource to help the public understand the charitable sector and some of its issues.

Some people have attacked charity watchdogs. They feel that by highlighting certain problems with a few organizations in the charitable sector they may be seen to contribute to public mistrust of charities. Others take the view that we cannot ignore the egregious misconduct of a very small number of charities and let these bad organizations hide out amongst the goodwill and glow of 85,000 charities in Canada. Whether it is tax evasion schemes, fraudulent receipting, improper fundraising, abuse of children or vulnerable beneficiaries, or other egregious conduct, we suggest that the charitable sector and our society should not allow the few bad actors impunity just because they are ostensibly in the “charitable sector”.

The biggest challenge with some charity watchdogs is that they sometimes inappropriately simplify issues and promise too much. For example, one cannot tell whether a charity is a good or effective charity simply by looking at the ratio of money spent on the “cause”. There is no list of “Best” charities in Canada for donors as what is best is actually very subjective as we illustrate in this post http://www.smartgiving.ca/finding-good-charities/how-to-find-a-good-charity/

Some charity watchdogs try to evaluate a large numbers of charities using methodology that, whether they acknowledge it or not, is too dependent on unreliable financial numbers and ratios that are fraught with problems. These ratios, when over emphasized, often make hideous charities look great or good charities look bad. Furthermore, while it may be easier to see a bad charity, it is much more difficult to distil good charities from great charities. The emphasis on financial numbers and ratios rewards charities that are sloppy in filling out their T3010 Registered Charity Information Return, promote non-transparent accounting or are downright dishonest.

Watchdog organizations are here to stay and sometimes they provide useful information.

Donors should be cautioned about relying on charity watchdogs to do the thinking for them. A donor who is interested in a charity is often in a far better position to understand the charity and whether its a worthy charity if they are prepared to do some research and perhaps volunteer with the organization. You may find some of our suggestions helpful on “Best Ways to Donate to Charity” http://www.smartgiving.ca/donate-to-charity/best-way-to-donate/

The best thing that a savvy charity can do is be aware of the criteria used by watchdogs, consider improvements with respect to some of the criteria if they make sense to your charity, let the watchdog know why certain criteria or rating systems may not be appropriate, be able to respond to queries from watchdogs, and be prepared to discuss with stakeholders, including the media, why a good charity may not, in some cases, look so great when particular methodology is used.

For many charity watchdogs, just like the charities they are watching, they are a work in progress and have significant room for improvement. A good watchdog, like a good charity, will listen, be prepared to acknowledge mistakes, offer its work with some humility and be constantly trying to improve.