Editorial: Updated expectations of animal charities

From ANIMAL PEOPLE, July/August 2008:
If for just 15¢ you could ensure that
every donation you make to animal charity goes to
a charity that does what it claims to do, and
does it well, would you spend the 15¢?
The ordering price of the newly published
10th annual edition of the ANIMAL PEOPLE Watchdog
Report on Animal Charities is $25.00–about the
same as the average donation to any type of
charity these days. Divide the Watchdog Report
price by the 165 succinct reviews of prominent
animal charities that it contains, and the
average price per review is 15¢, barely a third
of the cost of mailing a donation.
The ANIMAL PEOPLE Watchdog Report on
Animal Charities helps you to target your
donations and bequests to accomplish more for
animals. The ANIMAL PEOPLE Watchdog Report
gives you an informed independent investigative
perspective on the 117 U.S. animal charities that
you are most likely to hear from by direct mail
or through e-mailings, or hear about in the
news, and on 48 foreign animal charities whose
work is of particular note. People who make large
donations, frequent donations, or are planning
their estates will find the ANIMAL PEOPLE
Watchdog Report especially helpful.
There are free online resources to which
the Watchdog Report may be compared– but only
superficially.

The most recent available Internal
Revenue Service Form 990 public accountability
filings for all U.S. charities may be downloaded
from <www.GuideStar.org>. Similar web sites
provide the filings of British and Canadian
charities. We use these sites intensively and
highly recommend them, but average donors often
find nonprofit accountability filings quite
difficult to interpret. The Watchdog Report
abstracts the most important data for donors to
know, as a single line of type, including both
the ratio of program-to-overhead spending that
each charity claims, and the ratio as we believe
it actually would be, if no direct mail expense
is claimed as a “program” cost under the heading
of “public education.”
The web site Charity Navigator is
increasingly popular with donors to U.S.
charities of all sorts, but tends to be hugely
misleading, because the Charity Navigator
ratings are based on mere mechanical crunching of
Form 990 data, with little if any attention paid
to individually evaluating each Form 990 to make
sure the numbers are correctly reported, and
none of the assessment of major programs,
policies, administrative activity, and changes
of direction that make up most of each Watchdog
Report entry.
Donors might presume that since most Form
990 filings are made by chartered accountants,
they will be accurate. Yet the IRS itself
estimates that about 25% of all IRS Form 990
filings are incorrectly completed, sometimes
through simple error, often from seemingly
deliberate efforts to conceal or misrepresent
information. Very few such errors are flagged by
the IRS, because the IRS relatively rarely
audits nonprofit filings: that is not where the
IRS generates revenue. A correctly completed
Form 990 is hugely important to charity donors,
but since charities don’t pay taxes, this tends
to be of little concern to the IRS –except when
the charity turns out to be a front for tax
evasion.
The other major charity reviewer, the
Wise Giving Alliance, does line item financial
analysis, to its credit, but it also applies
standards of governance to all charities, across
the boards, that tend to be impractical and
self-defeating for any small charity, any
charity of highly specialized purpose, and any
charity still controlled by the founders. While
the Wise Giving Alliance financial standards are
reasonable, the Wise Giving Alliance governance
standards are basically appropriate to
universities, hospitals, and other old and
large charities, but inappropriate for most of
the rest of the charitable spectrum, animal
charities most of all.
The 2008 ANIMAL PEOPLE Watchdog Report is
prefaced, like each edition since 2003, with
simple explanations of the most common methods by
which experts evaluate nonprofit financial data,
so that each reader can use the same tools to
assess any charity. A second preface includes
the 10-point ANIMAL PEOPLE codes of ethics for
animal charities and fundraisers. This year we
have amended the code of ethics for animal
charities for the first time since 2003, because
the ongoing leadership transitions at the World
Society for the Protection of Animals, detailed
on pages 16-18 of this edition, illustrated to
us that our original standard for integrity of
purpose was insufficiently clear.
The orginal standard stipulated that,
“The activities of an animal protection charity
should verifiably endeavor to help animals,
committing the overwhelming volume of resources
raised to animal protection work other than
fundraising, administration, and the
maintenance of reserve funds.
“a) ANIMAL PEOPLE believes that all
fundraising and program literature distributed by
an ethical animal protection organization should
be truthful, accurate, and up-to-date, and
should be amended or withdrawn, as is
appropriate, when circumstances change or new
information emerges. If a project, campaign,
or program is announced but fails to be
developed, for whatever reason, donors should
be told what happened and what was done instead
with the resources raised in the name of that
project, campaign, or program.
“b) ANIMAL PEOPLE believes it is
inherently unethical for board members and
executives of animal charities to simultaneously
represent organizations, businesses, political
parties, or other entities whose activities or
goals conflict with the activities and goals of
the animal charities.”
To the above we have added, “ANIMAL
PEOPLE believes that board members and executives
of animal charities should explicitly,
personally, and on the public record endorse the
goals and policies of the animal charities they
represent. In the instance that a board member
or executive opposes or seeks to amend the goals
and/or policies of the animal charity he/she
represents, the position of the board member or
executive should be clearly articulated, and on
the public record.”
Until WSPA elected a board president and
board members who have refused to personally
endorse some of the founding policies of WSPA on
the public record, we never imagined that this
could become an issue.

Additional points of ethics

Among the other major points in the
ANIMAL PEOPLE code of ethics for animal
charities, we believe that under all except the
most unusual circumstances, which should be
clearly, fully, and prominently explained to
donors with solicitations for funds, an ethical
animal protection charity should hold fundraising
and administrative cost to less than 35% of total
expense within a calendar or fiscal year. ANIMAL
PEOPLE considers “fundraising costs” to include
any use of telemarketing to solicit funds, as
well as any direct mailings which solicit funds,
include envelopes for the return of donations,
and would probably not have been mailed if postal
rules forbade the inclusion of the donation
envelopes. (This standard parallels the
guidelines of the Wise Giving Alliance.)
Twenty-three of the 117 U.S. charities
listed in the 2008 Watchdog Report flunk this
standard, including seven that are included only
because the high volume of direct mail sent on
their behalf tends to bring inquiries from
recipients far more often than their program
service would appear to warrant. The 2008 ANIMAL
PEOPLE Watchdog Report also includes what may be
the last listing for an apparently defunct
charity, once internationally prominent, which
collapsed into debt as result of a bad contract
with a direct mail fundraiser.
ANIMAL PEOPLE believes, in general
agreement with the Wise Giving Alliance and
Charity Navigator, that under all except the
most extraordinary circumstances, which should
be clearly, fully, and prominently explained to
donors, an ethical animal protection charity
should avoid keeping more than twice the annual
operating budget of the charity in economic
reserves, including investment accounts and the
reserved assets of subsidiaries.
Of the 23 U.S. charities in the 2008
ANIMAL PEOPLE Watchdog Report that appear to
flunk this standard, several came by their
wealth recently, through receipt of huge
bequests, and are now expanding their program
service. But several others appear to have
forgotten that they received their wealth from
people who expected them to work much more
vigorously to relieve and prevent animal
suffering, not just sit on their assets.
A few may still be actively fundraising
chiefly to avoid having the IRS reclassify them
as private foundations, meaning their revenues
would no longer be tax-exempt.
Among the standards unique to ANIMAL
PEOPLE are that we believe an ethical animal
charity should behave in a manner which considers
the welfare of all animals. Just as it would be
unethical for a human welfare charity to
sacrifice the well-being of some people in order
to benefit a chosen few, so ANIMAL PEOPLE
believes it is inherently unethical for an animal
charity to cause some animals to suffer on behalf
of other animals.
For example, ANIMAL PEOPLE finds
unethical any policies which promote the
well-being of some animals, including endangered
species, by encouraging the killing of predators
or competitor species. We likewise find
unethical any policies which encourage the
release or return of animals to habitat where the
animals are unwelcome and may be at high risk of
enduring human cruelty or extermination.
ANIMAL PEOPLE recommends that all food
served for human consumption by or on behalf of
animal charities should be vegetarian or,
better, vegan. This recommendation was
controversial when ANIMAL PEOPLE first
editorially advanced it, in 1995. It is now
widely echoed, including in the food policy of
the Humane Society of the U.S.
ANIMAL PEOPLE believes that an ethical
animal charity should take into consideration the
well-being of the whole of the animal-related
nonprofit sector.
ANIMAL PEOPLE views as inherently
unethical the involvement of an animal protection
charity, or the officers, directors, and other
management of the charity, in any form of crime
except for occasional acts of open civil
disobedience undertaken in connection with
nonviolent protest.
ANIMAL PEOPLE believes that animal
protection charities should not be directed or
managed by persons of felonious criminal history
involving theft, fraud, or violence against
either humans or nonhuman animals. Though this
might seem almost to go without saying,
criminals have several times seized control of
animal charities, exploiting them for personal
gain.
ANIMAL PEOPLE believes that even beyond
the requirements of law, an ethical animal
protection organization must discourage racism,
sexism, sexual predation, discrimination, and
harassment, and that even beyond the
requirements of law, an ethical animal charity
must maintain facilities which are safe, clean,
and physically and emotionally healthy for
animals, visitors, and staff.
ANIMAL PEOPLE believes that if and when
an ethical animal charity finds itself to be in
violation of any of these standards, even if
accidentally and unintentionally, it must
immediately work to resolve the problems.
ANIMAL PEOPLE views as inherently
unethical the use of legal action to attempt to
silence criticism, a trend we noted in the U.S.
several years ago and are now beginning to see in
other nations. ANIMAL PEOPLE believes that
charities and their officers, directors, and
management should view themselves as operating
under public scrutiny, for the public benefit,
and as being therefore public figures, who are
subject to the same kinds of observation,
criticism, commentary, and satire as elected
officials and candidates for public office.
This includes us.
ANIMAL PEOPLE believes that an ethical
animal-related charity, if it employs an outside
fundraiser or fundraising counsel, should hire
only fundraisers or fundraising counsels with no
conflicts of interest, such as simultaneously
representing organizations or political
candidates with goals opposed to those of the
animal-related charity.
The complete ANIMAL PEOPLE standards for
ethical charities, along with our standards for
fundraisers, are accessible at
<www.animalpeoplenews.org>, as well as in the
Watchdog Report, or will be sent on request by
e-mail.
The 2008 ANIMAL PEOPLE Watchdog Report on
Animal Charities may be ordered for $25 per copy
from P.O. Box 960, Clinton, WA 98236;
360-579-2505.