Juneteenth organizations to donate to1/23/2024 ![]() ![]() The average this year is 87%, unchanged from last year. The math is simple: program support expense divided by total expense. Here’s a rundown on the financial efficiency ratios we calculate, and what they mean:ĬHARITABLE COMMITMENT This shows how much of a charity’s total expense went directly to its charitable purpose (also known as program support or program expense), as opposed to management, certain overhead expenses and fundraising. Or just contact the charity and ask for a set of filings. Many filings can be downloaded for free from Guidestar, Foundation Center, ProPublica and, even if the charity isn’t based there, the New York State Attorney General. Look around for a link to “financials,” “financial information,” “accountability,” “990,” “annual report” or “about us,” or try punching in those terms into a search box. (The IRS lets charities with annual gross receipts below $200,000 or end-of-year total assets of less than $500,000 file a far-less-revealing form called the 990-PF, or, if the annual gross receipts are below $50,000, a 990-N, which literally is a postcard.) Many charities now include some or all of these documents on their own websites. Information needed to calculate efficiencies of many nonprofits can be found on the IRS Form 990 tax return (parts VIII and IX), a formal financial statement or an annual report. The goal is to identify those charities with out-of-whack ratios-often due to wildly high fundraising costs-and no acceptable reason for them. Like any enterprise, charities have to pay for things like rent, insurance and utilities. ![]() Overhead, a direct or indirect component of these calculations, is not in and of itself bad. If ratios are a lot worse at the charity you’re interested in, you can contact them and ask for an explanation.Īnother caution: Financial efficiency measures are just a starting place for analysis by a would-be donor. ![]() It’s possible to dig up financial filings and then compare financial efficiency ratios to the five food banks on our list. Say you’re looking at donating to a local food bank. The Forbes list covers a wide range of categories, including health care, domestic and international needs, environmental, animal welfare, religious and youth. The ratios for a museum or foreign aid provider can’t be usefully compared with those of, say, a hospital or a single-illness charity.īut in the same category, the ratios can be very helpful in analysis. Which leads to our annual caution: Don’t compare efficiency ratios for different kinds of charities. Therein lies the value of the Forbes list in helping to evaluate similar charities not on the list. We also avoid nonprofits with very few direct donors (such as virtually every private foundation) and charities that receive most of their donations indirectly from federated campaigns, community chests and such vehicles.įor each of the 100 charities on our list, we calculate three financial efficiency ratios, also indicating the direction of change from the prior year if available. Among them: purely academic institutions (which tend to concentrate on their own alumni), donor-advised funds often run by some of the big financial companies (which are not operating charities but a holding vehicle for money that will eventually go to an operating charity), and the many religious entities that aren’t required to make public their financial information (an obvious exclusion). Since our list trends toward charities that appeal to the general public, we don’t evaluate certain categories of nonprofits. Everything else coming in is included in other revenue, and the three categories summed as total revenue. For each charity we list separately private support and government support. So we don’t count as a private donation membership dues, reasoning that the donor/member is receiving a thing of value, like reduced admission fees for a museum. To be counted by us, a contribution must be based on pure charitable intent, with the donor getting back nothing beyond the satisfaction of supporting a favored cause. ![]()
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