BBB Doubling Seal Fee For Largest Charities
August 16, 2013 Don McNamara
The BBB Wise Giving Alliance (WGA) has revised the fee schedule for the national charity seal it offers to nonprofits, with smaller organizations seeing no change and the largest organizations seeing increases that double what they pay now.
H. Art Taylor, president and CEO of WGA, said the changes go into effect in January 2014.
“We’re in the 10th year of this program (which started in 2003), and we haven’t changed the fee schedule since that time, so just normal practice would require at some point that you make some changes,” Taylor said.
“But in addition to that, what we want to do is continue to generate more revenue so we can put more effort into promoting the seal and increasing the value of the seal,” he added.
Taylor said the new fee schedule was seen in the WGA as a matter of fairness and that the WGA’s aim was to keep fees as low as possible. The fee schedule change had the approval of the WGA board, Taylor said.
“Charities at the lower end were paying a much higher percentage of their revenue just because of scale. We thought it was important to make that a little more equitable, but in fairness we thought this was the right way to do it,” he said.
Since 2003, WGA has offered national charities that meet the Standards for Charity Accountability the option of applying for a BBB national charity seal that can be displayed both online and in the organizations’ solicitation materials. The intent is to help donors make informed giving decisions and promote high standards of conduct among organizations that solicit contributions. The seal attests that the charity adheres to the WGA’s standards. Participation in the seal program requires a license agreement and a fee based on a sliding scale.
Under the new fee schedule, organizations with operating budgets up to $1 million will pay $1,000 a year for the seal, which is no change from previous years. Organizations with budgets of $1 million to $4.9 million will pay $2,000, also no change. Organizations between $5 million and $9.9 million will pay $3,500, an increase of $500.
The big changes will come with larger organizations. Those with budgets between $200 million and $299.9 million will see the fee increase from $15,000 to $25,000. Those between $300 million and $499.9 million will go from $15,000 to $27,500 and those of $500 million or more will go from $15,000 to $30,000.
Taylor said he received a letter from an organization he would not identify but which he described as “at the higher end” complaining about the change and one “at the lower end” arguing that its fee should be lowered.
According to Taylor, “History has shown that 70 percent of the charities that we accredit (i.e., national charities that meet all 20 BBB standards) get the seal, and once they get it very few choose not to get it for the subsequent years.”
He said that 90 percent renew, and “given that this is a voluntary program we think that’s pretty impressive.”
There are 361 national charities licensed to use the BBB Accredited Charity Seal. The organization reports on 1,262 organizations. Of those 1,262 groups, 497 (39%) are accredited, 270 (22%) do not meet one or more standards and 377 (30%) declined to disclose data to the BBB. There are 118 (9%) reviews in progress, according to the BBB.
Of the 497 charities that are accredited (meet all 20 standards) 73 percent opt to license the BBB Accredited Charity Seal.