Posted on Apr 5, 2016
Support Veterans and Active Duty Servicemembers : Charity Navigator
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I f you have not used or looked at Charity Navigator before giving to any Non-Profit, (and not just Non-Profits that aid Vets and currently serving members of the military), you should check them out.
I am deliberately not giving to any Non-profit until I have investigated them through Charity Navigator. Wounded Warrior project is currently on their "watch list" due to many of their reported problems and the recent firing of their CEO and CFO(?), after a sixty-minute piece uncovered lavish spending by their Executives and a poor accounting on the costs to run the organization vs the amount of money actually spent on providing services to their Veterans.
That is just one kind of the acid test when evaluating a Non-profit, how much of their donations are eaten up in overhead costs (salaries, rent/building costs, travel, marketing, etc.) vs how much of their annual donations are spent directly to support their mission and beneficiaries and programs. Most experts say to look for a Non-profit to spend not more than X percentage on overhead and costs (AKA Program ratio), vs how much are spent on programs and services that directly support its mission and beneficiaries.
BUT see also: There's no question that nonprofit organizations have an obligation to manage their finances responsibly. There's also no question that ratios can be valuable tools for evaluating charitable groups. By themselves, however, these figures can be more misleading than helpful.
Take program ratio—the percentage of an organization's total expenditures that is devoted to programs and services—as an example. A number of things, such as size, age, and location, affect a nonprofit's expenses. (For example, a nonprofit in an area with a high cost of living will need to pay more for office space, supplies, and salaries than a comparable organization in a less costly area. For a discussion about nonprofit size and age, see How to Calculate Ratios, below, and Renata J. Rafferty, "Risk and Return: Defining Your 'Comfort Zone'.")
An organization's mission is even more important in determining its costs. Say you are thinking of contributing $100 to either a local art museum or a neighborhood food bank. From the organizations' financial pages on GuideStar, you calculate that the art museum spends 72 cents of every dollar on programs, whereas the food bank spends 95 cents of every dollar on programs. Obviously, the food bank is the more efficient organization and will put your donation to better use. Right?
Not necessarily. The median program ratio for art museums is 71 percent, and the median program ratio for food banks is 94 percent. Thus, both the art museum and local food bank are slightly above the middle of their respective peer groups.
Why is there such a difference between the two medians? Typically, art museums have higher overhead costs (such as insurance, building maintenance, security) and fundraising expenses than food banks.
At GuideStar, we believe that the ultimate test of an organization's efficiency is how well it performs its mission. Unfortunately, this criterion is not always reflected in ratios of any kind. Look, for example, at the following two hypothetical organizations that provide job training to people about to go off welfare. From : https://www.guidestar.org/Articles.aspx?path=/rxa/news/articles/2004/why-ratios-arent-the-last-word.aspx
Groups like Charity navigator take much of the thinking and time consuming research out of your hands and make it easier for you to chose who you want to support based upon their research.
I am deliberately not giving to any Non-profit until I have investigated them through Charity Navigator. Wounded Warrior project is currently on their "watch list" due to many of their reported problems and the recent firing of their CEO and CFO(?), after a sixty-minute piece uncovered lavish spending by their Executives and a poor accounting on the costs to run the organization vs the amount of money actually spent on providing services to their Veterans.
That is just one kind of the acid test when evaluating a Non-profit, how much of their donations are eaten up in overhead costs (salaries, rent/building costs, travel, marketing, etc.) vs how much of their annual donations are spent directly to support their mission and beneficiaries and programs. Most experts say to look for a Non-profit to spend not more than X percentage on overhead and costs (AKA Program ratio), vs how much are spent on programs and services that directly support its mission and beneficiaries.
BUT see also: There's no question that nonprofit organizations have an obligation to manage their finances responsibly. There's also no question that ratios can be valuable tools for evaluating charitable groups. By themselves, however, these figures can be more misleading than helpful.
Take program ratio—the percentage of an organization's total expenditures that is devoted to programs and services—as an example. A number of things, such as size, age, and location, affect a nonprofit's expenses. (For example, a nonprofit in an area with a high cost of living will need to pay more for office space, supplies, and salaries than a comparable organization in a less costly area. For a discussion about nonprofit size and age, see How to Calculate Ratios, below, and Renata J. Rafferty, "Risk and Return: Defining Your 'Comfort Zone'.")
An organization's mission is even more important in determining its costs. Say you are thinking of contributing $100 to either a local art museum or a neighborhood food bank. From the organizations' financial pages on GuideStar, you calculate that the art museum spends 72 cents of every dollar on programs, whereas the food bank spends 95 cents of every dollar on programs. Obviously, the food bank is the more efficient organization and will put your donation to better use. Right?
Not necessarily. The median program ratio for art museums is 71 percent, and the median program ratio for food banks is 94 percent. Thus, both the art museum and local food bank are slightly above the middle of their respective peer groups.
Why is there such a difference between the two medians? Typically, art museums have higher overhead costs (such as insurance, building maintenance, security) and fundraising expenses than food banks.
At GuideStar, we believe that the ultimate test of an organization's efficiency is how well it performs its mission. Unfortunately, this criterion is not always reflected in ratios of any kind. Look, for example, at the following two hypothetical organizations that provide job training to people about to go off welfare. From : https://www.guidestar.org/Articles.aspx?path=/rxa/news/articles/2004/why-ratios-arent-the-last-word.aspx
Groups like Charity navigator take much of the thinking and time consuming research out of your hands and make it easier for you to chose who you want to support based upon their research.
Support Veterans and Active Duty Servicemembers : Charity Navigator
Posted from charitynavigator.org
Non-Profits
Charity
Wounded Warrior Project
Posted 8 y ago
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Program Spending
Charities often tell donors that a certain amount of every dollar goes directly to "programs," which usually mean direct services provided to the recipients of their assistance (the homeless, for example, or children). But read the fine print, says CharityWatch: sometimes these statements say "of every dollar spent" and sometimes they say "of every dollar donated." Those are two different numbers, as ProPublica's reporting on the Red Cross demonstrates. The Form 990 not only lists the totals for money coming in and going out, but in Part III (often the second page of the completed form, as with the 2013 form for the New York-based Coalition for the Homeless), the group also describes the program services that it performed, how much they cost and indicates whether there were any significant changes to existing programs. If you're unsure about exactly what a charity does, Part III can help clear up that uncertainty, but it is also the place where charities promote their accomplishments.
http://digg.com/2015/how-to-vet-nonprofits-before-you-donate
Charities often tell donors that a certain amount of every dollar goes directly to "programs," which usually mean direct services provided to the recipients of their assistance (the homeless, for example, or children). But read the fine print, says CharityWatch: sometimes these statements say "of every dollar spent" and sometimes they say "of every dollar donated." Those are two different numbers, as ProPublica's reporting on the Red Cross demonstrates. The Form 990 not only lists the totals for money coming in and going out, but in Part III (often the second page of the completed form, as with the 2013 form for the New York-based Coalition for the Homeless), the group also describes the program services that it performed, how much they cost and indicates whether there were any significant changes to existing programs. If you're unsure about exactly what a charity does, Part III can help clear up that uncertainty, but it is also the place where charities promote their accomplishments.
http://digg.com/2015/how-to-vet-nonprofits-before-you-donate
How To Vet Nonprofits Before You Give
Charity solicitations are as much a part of the holiday season as decorations. If you give, it’s a good idea to know what the nonprofit organization does with your money. ProPublica has a nice tool to do that with.
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