2 0 1 3 A n n u A l r e p o r t

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BBB Institute for Marketplace Trust

O u r M i s s i O n :To provide research and education about consumer/business

marketplace issues, develop standards and best practices for ethical marketplace behavior, and promote ethical conduct in the marketplace.

2013 Board of Directors

CHAIrMAnKen CarrollManager, Customer ValueSuccessFactors Inc.

Kip MorsePresidentBBB serving Central Ohio

Dana RosenfeldPartnerKelley Drye & Warren LLP

David WeissPresidentBBB serving Greater Cleveland

Edwin WelchPresidentI. L. Long Construction

Carol WilnerVice President, Public AffairsAT&T Services, Inc.

eX-oFFICIo MeMBer Rodney DavisPresidentBBB Institute for Marketplace Trust

Letter from the BBB Institute ChairmanI am pleased to present the BBB Institute for Marketplace Trust Annual Report for 2013.

Engagement was the keyword for the BBB Institute for Marketplace Trust in 2013 as we delivered on our commitment to serve our mission by expanding both our board of directors and our programs.

Our six board members represent BBBs, national corporations, nonprofits, and the legal profession; and bring expertise in fundraising, strategy and finance, and business self-regulation to the foundation. We value their many contributions and thank them for their volunteer service to BBB. Of course, we also recognize the service of our continuing board members who have supported BBB Institute for years.

Our flagship program, BBB Military Line, grew in 2013 from both a program delivery and a financial perspective. Becoming nationally recognized as a financial education provider for military consumers, BBB Military Line brought its valuable message to venues held at the White House, Pentagon, and several high profile conferences. Twenty-eight local BBBs continued to bring uniquely tailored financial education to service members and their families across the country. Of course, this was made possible by our sustaining partnerships and the committed organizations that sponsor BBB Military Line. Our new consumer education program, BBB Smart Investing, performed well in the marketplace. The goal of the program is to arm people with the necessary tools and resources to make informed investing decisions and avoid scams. Thanks to our partner, the FINRA Investor Education Foundation, we also launched our first offering under this new program “Outsmarting Investment Fraud.” Since its inception, 58 BBBs have received training in administering and presenting the program to local audiences. Finally, the BBB Center for Character Ethics (an affiliate of the BBB Institute) entered its third year in 2013 with the launch of the “Cure for the Common Company” campaign.

Continuing on a forward trajectory in 2014, growth and longer term funding initiatives and opportunities are well underway. All programs are fully funded and BBB Institute experienced a milestone, bringing in over $1,000,000 in funding and in-kind contributions during 2013. BBB Institute was further entrusted with a Cy Pres Award to create an ad review consumer education program; a major project for BBB Institute in 2014. The trust and recognition of our partners allow BBB Institute to optimally operate and to lay a solid foundation for future good work in the marketplace. Trust is at the heart of what we do, and our partners link arms with us in that effort.

I thank each of you for your support of the BBB Institute for Marketplace Trust during 2013, and look forward to updating you on our progress in 2014 and beyond.

Sincerely,

Ken CarrollChairman of the Board BBB Institute for Marketplace Trust

Ken Carroll

BBB Military Line

The mission of BBB Military Line® is to provide consumer education and advocacy on behalf of military consumers in the marketplace. Our 22 million plus current and former military members and their families are often targets of consumer scams and substandard business practices.

Launched in 2004 as a partner in the Department of Defense (DoD) Financial Readiness Campaign, BBB Military Line has established numerous partnerships with the private sector and government agencies. As part of the DoD Financial Readiness Campaign, the Council of Better Business Bureaus (CBBB) signed Memoranda of Understanding with the DoD and Departments of the Army, Navy, Air Force, and Marine Corps that allow BBBs access to military installations for educational purposes. CBBB is also a US Coast Guard Qualified Organization, which allows BBB Military Line to reach Coast Guard members.

BBB Military line is sustained through support from:Capital One Bank

Defense Credit Union Council (DCUC)FINRA Investor Education Foundation/SaveAndInvest.org

The McGraw-Hill Companies

With Contributions from:Bank of America (BoA)

eMentor Leadership ProgramInCharge Debt Solutions

Military SavesVeteran eMentor Program

USO Metropolitan Washington

InitiativesJoining Forces

DoD Financial Readiness Campaign

28 BBBs/Branches account for all “Education and Outreach” efforts

BBB Military Line reached a total of 87,715 members of the military community in 2013. 

Extensive community-based representation is maintained through 103 BBB locations throughout the U.S. With a BBB located near virtually all U.S. military installations, BBBs are positioned to deliver national and geographically-focused informational, educational, outreach, and advocacy services. BBB Military Line has created uniquely tailored financial literacy curricula that local BBB staff members teach on topics, including:

• TheSmartConsumer(AdultandTeen)• DealsforWheels(AdultandTeen)• HowtoBuyaHome• InvestingforRetirement• Scams&IDTheft

Social Media 15%

Web Presence 10%

Education and Outreach 75%

2013 Highlights• BBBMilitaryLine,alongwithsustaining

partner Defense Credit Union Council (DCUC), conducted a pilot program whereby installations and their local BBBs established an information sharing avenue of military complaint data (personal identification protected). The program aims to reveal trends in local substandard business behaviors that adversely impact military consumers.

• BBBMilitaryLine,withsupportfromtheFINRAFoundation,createdthe “Outsmarting Investor Fraud” financial workshop, an in-person instructional event that highlights the vulnerabilities of financial fraud, and identifies persuasive skills and ways to reduce risky behaviors by asking questions and checking information.

• ThroughclosecollaborationinsupportoftheDoDFinancialReadinessCampaign, BBB Military Line joined fellow partners DCUC, the FINRA Foundation, Association of Military Banks of America (AMBA), and Military Saves to form the “Financial Readiness Communities of Practice,” an informal group that assists and advises the DoD Financial Readiness office on issues surrounding and impacting military consumers.

• BBBMilitaryLinecontinuedtopromoteitsrobustsocialmediaefforts,informing and alerting military consumers through Facebook, Twitter, and the monthly newsletter, the Trusted Scout.

BBB Smart Investing 2013 saw the continuance of BBB Smart Investing, the landmark consumer education program that provides investors with the necessary tools and resources to make informed investing decisions and avoid scams.

The first offering under this important program was “Outsmarting Investment Fraud,” funded by a generous grant from the FINRA Investor Education Foundation, which is affiliated with the Financial Industry Regulatory Authority (FINRA). BBBs conducted campaigns and hosted educational events within their service areas. Outreach awards were provided to BBBs that reached their target attendee goals and continue to help support their efforts. A two-year program with a third-year option, BBB and the FINRA Foundation agreed to engage the third-year option in 2014, continuing support of BBB outreach.

The centerpiece of the educational effort is a DVD, “TRICK$ OF THE TRADE: Outsmarting Investment Fraud,” which is shown at BBB Smart Investing events and given away at fairs. To increase their outreach efforts, some BBBs are renting spaces at local movie theaters for screenings, creating a fun learning experience.

Fifty-eight BBBs received training in administering and presenting the program to local audiences. Forty-two BBBs have been accepted into the program.

A co-branded microsite helps bring the BBB Smart Investing online, further educating and informing consumers on investment fraud.

Center for Character Ethics

The BBB Center for Character Ethics (an affiliate of the BBB Institute for Marketplace Trust) advances the mission of “building better businesses” by providing an integrated suite of trust assessment, training and recognition programs.

The Center provides thought leadership in the individual and organizational ethics fields. A unique collaboration of 14 local BBB Centers for Character Ethics, the Center has been recognized in the Top 100 Thought Leaders by Trust Across America.

In 2013, the Center introduced upgraded versions of its core ethics framework: BBB UncommonSenseTM and its companion, the UncommonSense Leadership Character Self-Assessment. The tools, in combination with the Center’s BBB EthicalEnterprisingTM Framework, and the BBB EthicalEnterprising TRUST Assessmentsm, are used by local Centers to objectively measure organizational trust and reward best practices through the annual BBB Torch Award for Ethicssm program.

In 2013, the Center also introduced www.buildtrustBBB.org and rolled out the “Cure for the Common Company” campaign, a video, web splash page and print-supported kit, created for local Centers to raise awareness of the confidential BBB EthicalEnterprise TRUST Assessment survey tool. The BBB EthicalEnterprise TRUST Assessment is designed as the “on ramp” for local BBB Centers to engage accredited and non-accredited businesses who see a value proposition in their firm becoming assessed, trained and recognized for its trust-building best practices.

The mission of each Center for Character Ethics is to provide highly effective assessment, training, and recognition programs designed to advance marketplace trust that target both individuals and enterprises in their service areas. To accomplish this “training” (consulting) mission, the local Center will need to partner with one or more locally-vetted, annually-reviewed, highly qualified, leadership and organizational development consultant. These consultants are needed to provide the high quality feedback and training programs associated with the EETA and other specialized programs. In 2013, the Center published a Local Consultant Trust Guide, to assist local Centers in the vetting and selection of consultants who will deliver the Better Business Building training component at their Centers.

Throughout 2013, local BBB Centers motivated K-12 educators to recognize high-character pursuits and outcomes in their students. The Center’s Laws of Life, Students of Integrity and the Toledo Center’s In Pursuit of Ethics programs involved over 11,000 students nationally and more than $100,000 in scholarships.

BBB INSTITUTE FOR MARKETPLACE TRUSTStatement of Activities

Year Ended December 31,

2013 2012

Revenue

Cy Pres Award . . . . . . . . . . . . . . . . . . . $ 418,253 . . . . $ -

FINRA Grant . . . . . . . . . . . . . . . . . . . . . 400,000 . . . . 400,000

Sponsorships . . . . . . . . . . . . . . . . . . . . 140,000 . . . . 157,086

Contributions . . . . . . . . . . . . . . . . . . . . 100,179 . . . . 90,896

Myers Award . . . . . . . . . . . . . . . . . . . . . 5,800 . . . . 15,550

Total revenues . . . . . . . . . . . . . . . . . . . 1,064,232 . . . . 663,532

Expenses

Program services:

FINRA Grant . . . . . . . . . . . . . . . . . . . . 293,520 . . . . 238,907

BBB Military Line . . . . . . . . . . . . . . . . 264,344 . . . . 406,630

Other . . . . . . . . . . . . . . . . . . . . . . . . . . 28,641 . . . . 25,208

Total program services . . . . . . . . . . 586,505 . . . . 670,745

Supporting services:

Management and general . . . . . . . . 61,897 . . . . 36,981

Fundraising . . . . . . . . . . . . . . . . . . . . . 7,123 . . . . 3,243

Total expenses . . . . . . . . . . . . . . . . . . 655,525 . . . . 710,969

Changes in net assets . . . . . . . . . . . . . 408,707 . . . . (47,437)

Net assets

Beginning of year . . . . . . . . . . . . . . . . 33,824 . . . . 81,261

End of year . . . . . . . . . . . . . . . . . . . . . $ 442,531 . . . . $ 33,824

The Institute received a Cy Pres Award in 2013 restricted to developing a “California Advertising Outreach Program” to educate California consumers about false advertising law and consumer legal remedies. The award does not indicate a particular time period during which the funds must be used.

BBB INSTITUTE FOR MARKETPLACE TRUSTStatement of Financial Position

Year Ended December 31,

2013 2012

ASSETS

Cash and cash equivalents . . . . . . . . $ 480,190 . . . . $ 47,083

Total assets . . . . . . . . . . . . . . . . . . . . . . 480,190 . . . . 47,083

LIABILITIES AND NET ASSETS

Accounts payable . . . . . . . . . . . . . . . . 850 . . . . 850

Due to affiliated organization . . . . . . 36,809 . . . . 12,409

Total liabilities . . . . . . . . . . . . . . . . . . . 37,659 . . . . 13,259

Net assets

Unrestricted . . . . . . . . . . . . . . . . . . . . . 21,728 . . . . 27,074

Temporarily restricted . . . . . . . . . . . . 420,803 . . . . 6,750

Total net assets . . . . . . . . . . . . . . . . . 442,531 . . . . 33,824

Total liabilities and net assets . . . . . . . $ 480,190 . . . . $ 47,083

Council of Better Business Bureaus, Inc.

3033 Wilson Boulevard, Suite 600 | Arlington, VA 22201703-276-0100 | bbb.org

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