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December 11, 2014

Non-Profits and CitizenAudit.org

by Anne Paddock

‘Tis the season for non-profits to raise some serious funds and with a bull stock market, low unemployment, and a stronger economy, charitable organizations should raise large amounts of cash this year. We all want our charitable dollars to help those in need so before you make a donation, it’s important to know where your money is being spent. How much will be used to pay salaries, marketing firms, office space, mailings, traveling, and most importantly, how much is actually going to the recipients of the charity?

These answers are all easily obtained by looking at IRS Form 990 – annual disclosures (total contributions, line item expenses including highly compensated employees, how much the charity distributed and how much they retained on their balance sheet) but the government doesn’t publish these reports and the charitable organization does not always provide a link to view these forms on their website. Enter CitizenAudit.com – a website that empowers everyone to investigate non-profits by providing a 10-year database of fully digitized financials (in a pdf format) – for free to the general public.

Last week, a friend of mine from Columbia told me about Teleton USA (www.teletonUSA.com) – a 501 (C) (3) non-profit organization that “was founded and organized to focus exclusively on educational and charity work.” The organization primarily raises funds in the Hispanic community through a 29-hour telethon (to be on December 12-13, 2014) to help sick, disabled, and mentally challenged children in the Hispanic community.

IRS Form 990 through CitizenAudit.com revealed the organization raised nearly $18 million last year, of which $142 thousand (2%) went to programs while $3.4 million (19%) went to fundraising and management costs (including $2.2 million on the telethon, $436 thousand on travel, $289 thousand on other expenses, $323 thousand on service charges, $67 thousand on legal, $71 thousand on IT). The remaining $14.3 million (79%) is shown on their balance sheet as an asset.

What this all means is that for every dollar donated to Teleton USA, 79 cents was kept by the charity, 19 cents went toward fundraising and management costs, and 2 cents went towards the programs for which they were raising funds for.  This is not to say, Teleton USA won’t use the 14 million to help children and their families at a later date but I have to wonder if those who donated money last year have any idea how little of their donation actually went to help the children last year?

Although most people think of  non-profit organizations as charities, the category is actually quite vast and includes the National Football League, museums, NPR, Sierra Club, Nature Conservancy, Greenpeace, Doctors Without Borders, Ted Talks, 4-H, the ACLU, the ASPCA, PETA, and more.  Click on this link: www.citizenaudit.org, type in the organization name in the search bar, and click on the pdf file to bring up Form 990 to learn about how these organizations raise and spend donations. Or, google the organization name along with the words “IRS FORM 990.”

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