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Service. The CBBB and the Philanthropic Advisory Service were
formed in 1971, as the successors to the National Better Business
Bureau and its Solicitations Control Division, respectively. The
NCIB is exempt under section 501(c)(3) as a charity; it was
founded in 1918. CBBB and NCIB also prepared and issued reports
on whether particular charitable organizations met CBBB’s and
NCIB’s respective fundraising and operational guidelines.
Typically, a report on a particular charitable organization was
prepared as a result of CBBB’s or NCIB’s receipt of inquiries
with respect to that charitable organization.
Among its guidelines, CBBB generally recommends that (1) a
charitable organization’s fundraising costs not exceed 35 percent
of related contributions, and (2) total fundraising and
administrative expenses not exceed 50 percent of its total
income. However, CBBB recognizes that a charitable organization
that does not meet these percentage limitations may provide
evidence demonstrating that its use of funds is reasonable. In
particular the CBBB pamphlet on standards states as follows:
The higher fundraising and administrative costs of a newly
created organization, donor restrictions on the use of
funds, exceptional bequests, a stigma associated with a
cause, and environmental or political events beyond an
organization’s control are among the factors which may
result in costs that are reasonable although they do not
meet these percentage limitations.
The overwhelming majority of the charities that the CBBB reviews
meet all 22 of the CBBB’s guidelines.
Similarly, among its guidelines, NCIB generally recommends
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