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Three Cups charity comes up short on BBB standards

by: , Lake Oswego High School student Shailini Pandya, left, and Lakeridge High School student Amy Guillotte, right, organized the Pennies for Peace fundraising drive for the Central Asia Institute as part of Lake Oswego Reads. The students presented assemblies, distributed fliers, created displays and delivered the decorated jugs to the nine elementary schools where the drive is taking place. It wraps up Friday and a check will be presented to Greg Mortenson, CAI executive director, Wednesday at LOHS.

The Central Asia Institute, the charity behind the book 'Three Cups of Tea,' fails to meet the accountability standards set by the Better Business Bureau Wise Giving Alliance.

According to the report, issued in October 2006, the CAI does not meet three out of the 20 standards listed by the BBB, which range from online information to governance practices.

Those not met by CAI include: Charity should have a minimum of five voting members on its board (CAI has four); missing Web site disclosures such as financial information and access to an IRS Form 990; and a link to a privacy policy is missing from its Web site, ikat.org. (The link has now been established).

CAI, which is based in Montana, also did not provide complete information, including an audit report, in order to meet 11 other standards in the BBB list.

The financial information listed on the report - including salaries, expenses and income - was pulled from a 2004 CAI tax return form.

CAI executive director and 'Three Cups of Tea' co-author Greg Mortenson will visit Lake Oswego next week to give a public talk as part of the citywide reading program Lake Oswego Reads.

During his visit, Mortenson will also accept donations on behalf of CAI.

Speaking by phone from his home in Bozeman, Mont., Mortenson said it would take too much time and resources for his three-person staff to meet all BBB criteria, which he says is designed with large charities in mind.

'Our main consideration is to comply with IRS standards instead,' he said.

He pointed out his preference for the charity watchdog Web site CharityNavigator.org, which gave CAI a score of 59.39 out of 100 points and a 'good' overall rating.

'Donors should look at more than one organization than the BBB,' Mortenson said. 'When I give money to non-profits, I usually don't refer to the BBB.'

Nevertheless, CAI hired a part-time consultant last October to look into how the charity can comply with watchdog organizations, including the BBB.

'This BBB issue is coming up more and more and I'm aware we don't meet criteria,' Mortenson said. 'We certainly want to meet all (standards), but our overhead is extremely low and we've been going through so much, so fast … It's certainly a priority.'

This year's book selection, 'Three Cups of Tea,' tells the story of how CAI began and how, under Mortenson's leadership, the organization builds schools for kids in Pakistan, Afghanistan and Krygyzstan.

As part of CIA's Pennies for Peace program, students at all nine Lake Oswego elementary schools are collecting change to buy school supplies for CAI. Each school's jug can hold hundreds of dollars. That fund-raiser ends Friday.

The Lake Oswego Public Library also plans to distribute CAI donor envelopes during the Mortenson talk Wednesday. Pennies for Peace will also present him with a check during the public event.

Many residents have expressed their desire to donate to Mortenson's cause, said LO Reads organizer Cyndie Glazer.

In a statement to the Lake Oswego Review, Glazer said the library takes the BBB report seriously and contacted CAI's operations director Jennifer Sipes about the issue.

'We feel there is nothing to be concerned about, especially after researching their financial records including their IRS Form 990 … that was filed in August 2007,' the statement said.

Carolyn Heymann, Lake Oswego, contacted the Review and the library after reading the BBB report and becoming concerned about CAI.

'A lot of groups are competing for our dollars and we just need to be aware of (the rating),' she said. 'Before they tug at our heartstrings and we write that big check, we need to consider non-profits that haven't been brought in by what we read.'

Heymann, who read 'Three Cups of Tea' and supports the idea behind CAI, suggested that instead of donating money to Mortenson, Lake Oswego residents with non-profit experience could donate their time and expertise to help CAI meet proper compliance.

'As much as we like putting money into (the cause), we might better serve giving (CAI) help with management,' Heymann said. 'It seems (Mortenson) needs help getting it sorted out.'

Indeed, the BBB report indicates that CAI is in the minority when it comes to compliance.

Sixty-five percent of the 1,200 national charities evaluated by the BBB meet all 20 BBB standards and another large percentage meet most, said Bennett Weiner, chief operating officer of the BBB.

That includes popular local charities, the Oregon Food Bank and Medical Teams International (formerly Northwest Medical Teams).

'We're very intentional about our involvement with the BBB,' said Bas Vanderzalm, president of Tigard-based Medical Teams International. 'We feel by following standards, it makes us a stronger organization and communicates to those who are concerned about governance that we are attempting to do the best job possible. It also builds confidence in those who support us.'

Vanderzalm said he would have serious questions about CAI if he were a donor who was considering giving financial support to Mortenson's cause.

'When an organization does not meet (standards), it should be able to explain why,' he added.

The BBB, CharityNavigator.org and the American Institute of Philathropy are among three prominent online charity watchdog organizations in the United States.

But unlike the other two sites, the BBB bases each report on 20 specific standards - rather than a few broad areas.

CharityNavigator.org, for instance, rates charities by two areas: Financial health and organizational efficiency/capacity. The AIP site does not rank CAI.

The BBB system allows the organization to take evaluations much further than the federal standard, Weiner said.

'Accountability requires more than having a financial statement,' he added.

Ninety-five percent of the charities evaluated by the BBB are in response to public inquiries, while the rest are evaluated by BBB at the charity's own request.

Like other watchdog groups, the BBB posts reports so donors can decide which causes to support and which ones to avoid

'We're the most experienced charity evaluator and we've been around for a long time,' Weiner said. 'Our standards are broad-based and we look at many different aspects of a charity and make those findings available to the public.'

Each report lasts two years and can be updated through communication with charity administrators. The final report is not issued until the charity gives input.

'We can correct (the reports),' Weiner said. 'If we tell (charities) certain things are missing, they will post them because they know (our standards) are basic threshold measures for accountability.'

Although the CAI has not made it a priority to update their report, its board plans to analyze each watchdog report next month and decide how to proceed, Mortenson said.

He added that board members would be open to Heymann's idea of getting assistance from Lake Oswego non-profit leaders.

'We have phenomenal support in Lake Oswego,' he said. 'What's happening there is mind-boggling.'

All donations from Lake Oswego residents will help purchasing supplies to build schools, which can cost from $15,000 to $30,000 apiece depending on size and location, Mortenson said.

He added that the CAI currently educates about 25,000 students at a cost of $680,000 per year. As CAI expands, the organization will make an effort to show donors the tangible result of their generosity through regular newsletters, Web site updates and videos of CAI schools posted on YouTube.

As for the BBB standards CAI did not meet, Mortenson said his organization purposely chooses to have four members on its board to keep costs down and that donors' names and contact information are never shared or publicly posted.

'If anyone wants (financial reports), they can e-mail, call or write and we'll send them,' Mortenson offered.

For more information on Central Asia Institute, visit www.ikat.org

To read CAI's report on the Better Business Bureau Wise Giving Alliance Web site, visit www.give.org

'Three Cups of Tea' talk set

Greg Mortenson and David Oliver Relin, co-authors of 'Three Cups of Tea,' will speak at 7 p.m. Wednesday in the Lake Oswego High School auditorium as part of Lake Oswego Reads. All of the tickets for the free event have been handed out, but the talk will be broadcast in the school cafeteria and other rooms. It will also be re-broadcast on Tualatin Valley Community Television (channel 28) throughout the months of February, March, April and May. For other LO Reads activities throughout February, visit www.ci.oswego.or.us/library and click on the blue LO Reads box.