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Mission Statement, Goals and More
AIP thoroughly checks out the charities

MISSION STATEMENT
The mission of the American Institute of Philanthropy (AIP), a nonprofit charity watchdog and information service, is to maximize the effectiveness of every dollar contributed to charity by providing donors with the information they need to make more informed giving decisions.

GOALS
To research and evaluate the efficiency, accountability and governance of nonprofit organizations; to educate the public about the importance of wise giving; to inform the public of wasteful or unethical practices of nonprofits and provide recognition to highly effective and ethical charities; to advise AIP members and conduct special investigations and evaluations of nonprofits; to expand and re-define our programs periodically to meet the continuing challenge of keeping the contributor informed.

THE AIP DIFFERENCE
Say NO to Robo RatingsSay no to robo-ratings. All charity ratings are not alike. Other charity information services use simplistic or automated systems to generate ratings. AIP analysts dig deep, carefully scrutinizing the individual finances of charities to give donors a clearer understanding of how their cash donations are being spent.

AIP's ratings are considered the most stringent in the sector. When a charity makes a claim that it spends "90% on programs," donors often wrongly assume this means $90 out of every $100 dollars they donate will be spent on the charity's programs, and only $10 will go to overhead. This is often not the case. Charities have wide latitude to include activities in their program expenses that most donors would not consider to be the bona-fide programs they are intending to support.

Other charity raters simply repeat or repackage at face value whatever a charity reports without adequate analysis of its finances or how it is operating. AIP's rating system is unique in that we carefully analyze a charity's finances and make adjustments to better reflect the goals of most donors who want their cash donations to be used efficiently. We do not allow charities to count the funds they spend on direct mail or telemarketing in their program spending, or to include large amounts of undisclosed and often overvalued donated goods in their expenses, even if their accountants allow them to do so.

AIP is fiercely independent. We do not charge the charities we review to be listed in our Guide or for the right to publicize their rating, nor do we accept any advertising whatsoever on our web site or in our publication. Our board of directors does not include any heads of nonprofit associations who receive their pay from the groups they are watching. Because over 95% of our support comes from small, individual donations, we have the freedom to speak openly and to be critical of the unethical practices of charities, without concern for special interests cutting our funding.

AIP uses reliable information and treats charities consistently and fairly. The self-reported information charities provide in their tax forms or solicitation materials may not be the most useful source of information for donors. Unlike some raters that rely on the tax form alone, AIP reviews a charity's tax form in conjunction with its more reliable audited financial statements, which are produced by independent, Certified Public Accountants outside of the charity. Audits often include information that a charity chooses to not report about itself in its tax form.

The rules governing charity financial reporting leave a lot of room for variation, which results in a great deal of information that is inconsistent, unclear, or even incorrect. Sometimes a charity may be doing an outstanding job with its funds but receive poor ratings from others due to computer-automated or overly simplistic evaluations that do not take into account the complexity of charity financial reporting and accounting rules.

AIP rates charities that other raters won't. AIP is the only national charity watchdog to evaluate social welfare groups that are not eligible to receive tax-deductible contributions such as the ACLU, Human Rights Campaign, League of Women Voters, NARAL Pro Choice America, National Right to Life Committee, and Sierra Club. AIP also rates many religious charities such as the Salvation Army that are exempt from filing a tax form with the IRS but that share their audited financial statements with AIP.

Bottom Line: With no SEC or federal government watchdog, no investors who will sue if given false information, and loose reporting rules, the nonprofit sector has little oversight and much room for financial manipulation. AIP digs deep into the complex and often confusing financial reporting of charities and issues easy to understand A+ to F letter grade ratings for donors who want to know how efficiently their donations are being spent.

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BOARD OF DIRECTORS
Daniel Borochoff
President and Founder

Daniel Borochoff has long been a strong and independent voice for ethics and transparency in the nonprofit sector. He founded the American Institute of Philanthropy (AIP), a nationally acclaimed charity watchdog, in 1992 to address the need for research and analysis on charity finances, fundraising practices and governance. AIP provides information on wise giving to thousands of concerned individuals, foundations, and corporations. Borochoff has 20 years of experience as a philanthropic and financial analyst. Thousands of newspapers, magazines, TV and radio stations have covered his insights into nonprofit practices. He was a founding board member of the Hearts and Minds Network and the ePhilanthropy Foundation.

During times of crisis, Borochoff has been asked by Congress to give critical and independent testimony. Borochoff testified on the charities’ response to the survivors of 9/11 in 2001 and in 2005 he testified on the charities' response in the aftermath of Hurricanes Katrina and Rita. AIP’s research on veterans charities’ failing performance, while wars in Iraq and Afghanistan rage on, triggered Congressional hearings in 2007 and 2008 and Borochoff was again asked by Congress to participate.

Borochoff served on two task forces of the Financial Accounting Standards Board that set accounting standards for charities. He served as an awards panelist for the Society of Professional Journalists (SPJ), Independent Sector, and the Community Arts Assistance Program for the City of Chicago. He has given speeches at national SPJ conferences. In 2010 Borochoff was invited to speak at the National Association of Attorneys General/NASCO Conference. He has an MBA from Indiana University and a BS in Accounting from Syracuse University.

Ray Lay
Secretary/Treasurer
President and Founder, Forestree, Inc.
Chicago, Illinois

James Vallone
Director
Chief Auditor, Bank of New York
New York, New York

Clinton E. Berry
Director
Worldwide Procurement, PepsiCo
Somers, New York

William W. Newbill, Esq.
Director
Public Sector Attorney
Dallas, Texas

Newbill practices law in the public sector in Dallas, Texas, and previously worked as a social worker and in public welfare programs with low income and minority populations in Tulsa, Oklahoma.

FINANCIAL INFORMATION

If you would like to obtain AIP's (and many other nonprofits') IRS 990 tax form, please visit the website of The Foundation Center. Please check our Links page for additional resources.

AIP's most recent audited financial statements
(PDF documents require Adobe® Acrobat® Reader to view.)

STATE DISCLOSURES
American Institute of Philanthropy (AIP) is registered in the following states which require these statements:

Florida – “A copy of the official registration and financial information may be obtained from the division of consumer services by calling toll-free, within the state, 1-800-HELP-FLA.”

Maryland – Copies of information are available through the Secretary of State.

Michigan – Registration number is MISC 11307.

New Jersey – Information filed with the Attorney General concerning this charitable solicitation may be obtained from the Attorney General of the State of New Jersey by calling 201-504-6215.

New York – Copies of the annual report can be obtained from the Office of the Attorney General, Dept. of Law, Charities Bureau, 120 Broadway, New York, NY 10271.

North Carolina – A copy of the license to solicit charitable contributions as a charitable organization or sponsor and financial information may be obtained from the Department of Human Services, Solicitation Licensing Branch, by calling 919-733-4510.

Pennsylvania – “The official registration and financial information of the American Institute of Philanthropy may be obtained from the Pennsylvania Department of State by calling toll-free, within Pennsylvania, 1-800-732-0999.”

Virginia – Financial statements are available from the State Division of Consumer Affairs.

Washington – Financial information is available from the Secretary of State. Washington residents call toll-free 1-800-332-4483.

West Virginia – “West Virginia Residents may obtain a summary of the registration and financial documents from the Secretary of State, State Capitol, Charleston, WV 25305.” Registration with these governmental agencies does not imply endorsement by the state.

AIP is a 501(c)3 nonprofit organization, IRS EIN #33-0491030.

 
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Last Update: October 26, 2010