Glossary

No Material Diversion of Assets:

 A diversion of assets – any unauthorized conversion or use of the organization's assets other than for the organization's authorized purposes, including but not limited to embezzlement or theft – can seriously call into question a charity's financial integrity. We check the charity's last two Forms 990 to see if the charity has reported any diversion of assets. If the charity does report a diversion, then we check to see if it complied with the Form 990 instructions by describing what happened and its corrective action. This metric will be assigned to one of the following categories:

• There has been no diversion of assets within the last two years.
• There has been a diversion of assets within the last two years and the charity has used Schedule O on the Form 990 to explain: the nature of the diversion, the amount of money or property involved and the corrective action taken to address the matter. In this situation, we deduct 7 points from the charity's Accountability and Transparency score.
• There has been a diversion of assets within the last two years and the charity's explanation on Schedule O is either non-existent or not sufficient.  In this case, we deduct 15 points from the charity's Accountability and Transparency score.