Salinas, Calif.-Let's face it, we're asked to give to charity year round not just at the holidays. With over 2 million charities in America there are many worthy causes that pull at our heart strings and we want to give. But what our Center for Investigative Action found out, blind emotional giving can land the majority of your donation into administration or general expenses and not towards prime charitable programs.
The Center for Investigative Action sought an expert at watching and rating charities. We found Daniel Borochoff from Charitywatch.Org. Borochoff is President and Founder of the international charity watchdog group that's tracked and rated charities for over 20 years. He states a troubling issue, "do realize that a lot of manipulation goes on to get you to want to give."
So we went to work...to find out just where does your money go when you give to a charity? Here's how you can find out...this complicated looking IRS form is called a 990. It's easy to go online, look at the IRS 990 form of the charity of your choice and find out the charities program expenses verses their fundraising and administration costs. One such web site is knows as the National Center for Charitable Statistics.
We did some digging on a few of the most well-known non-profits on the central coast---using CharityWatch's guide to determine if a non-profit, registered through the IRS as a 501 c 3 non profit, is spending your donation wisely.
Borochoff gave us the rule of thumb. "The minimum should be 35 dollars to raise 100 dollars. Charities should be at least 60 percent of their budget toward charitable programs."
One very well known charity is the Monterey Peninsula Foundation which has two main sources of revenue. The ATT Pebble Beach National Pro Am and the Nature Valley First Tee Open golf tournaments. The Monterey Peninsula Foundation's Mission is grant funding.
Looking at it's 990 form, total revenue for year ending June 2011 was 11.9 million dollars. The Foundation's most recent 990 is not available do an extension that they filed with the IRS. It funded 5 point 7 million dollars in charitable grants that year---roughly half their revenue. Their total administration expenses were 1.9 million, about 16 percent of total revenues. The foundation ended the year with a revenue surplus of 3.1 million dollars. According to CharityWatch's scale, it's in good standing. The foundation's Director of Philanthropy Laurel Lee-Alexander said look at these factors when considering a donation. "By looking at their financial's, by looking at the staff, number of board members they have, have you had direct experience with the non profit?"
CharityWatch said a high rated charity spends no less than 60 percent on mission program expenses, outside of that, scrutiny is wise.
Santa Maria's Good Samaritan Shelter mission is to support services to the homeless. Looking at the shelter's most recently published 990 form for year ending June of 2011....program expenses are listed as 2.4 million dollars. Administration and fundraising is listed as roughly 766 thousand. That means roughly 70 percent of their revenue this year went to support the homeless. By Charitywatch.Orgs standard, a stellar non-profit.
We should mention that the system of reporting financial's for non profits in America is set by the IRS. CharityWatch as well as other non-profits we talked to on the central coast agree that the system can be vague and expenses can be interpreted differently by each non profit and by the IRS when it audits these organizations. A lot of the interpretation lies with the charity's mission.
For example, the National Steinbeck Center in Salinas has the mission to quote "Build community, celebrate creativity inspired by the words of John Steinbeck."
The Steinbeck Center is currently undergoing an audit and their most recent 990 form was not available for our story. What's available publicly is the form 990 for year ending June 2011. About a year and half old.
We found total program expenses were roughly 1.2 millions dollars, but administration and fundraising expenses are over 992 thousand dollars. So for this report year, the Steinbeck Center spent roughly 83 dollars in administration and fundraising for every 100 dollars of program expenses. An extremely high percentage by CharityWatch.Org's scale. This is not uncommon for this type of non profit, because it deals in information and education, something not as tangible as food and shelter and more costly to operate. Suffice to say, this could be a concern to a contributor...we sought comment from the national Steinbeck center.
Board President and CPA Chris Steinbruner commented "The bottom line is the NSC does an amazing job given our staffing and budget. We are a great investment for our donors and community....we are not where we need to end up...our contribution revenue and program revenue need to be higher to fully pay for our facilities. We are working diligently on this."
By contrast, take the Food Bank of San Luis Obispo County. A different type of non profit, but one asking for your money and support none the less. Their mission? "procurement and distribution of food to agencies serving the needy." Its end of year June 2011 totals show 9.4 million dollars goes to the programs to feed the hungry, while just over 464 thousand dollars goes to administration and fundraising expenses. That means 95 dollars of every 100 dollars goes to feeding the hungry. By CharityWatch's standard, a stellar charity. The vast majority of your cash donation will feed the hungry.
You see the central coast Salvation Army bell ringer everywhere, where does you money go with them? Major Kris Potter shared its financial's with us. "Nationally 86 cents of every dollar goes back into the community. Here on the central coast its about 70 to 75 cents. We're in a high rent district here so our expenses are a bit higher." Still well within CharityWatch's standard. At least 70 dollars of every 100 dollars donated goes to the central coast mission.
Because the IRS standards are open to some interpretation CharityWatch's Borochoff said the best way to give is to, "Let your emotions motivate you to want to give and help, use your brain to make an informed giving decision."
Ultimately you'll give to whom you want to. If you want the majority of your dollar to go to the charities mission then be a wise giver and look into where your money goes.
