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October 28, 2015

Where does your $1 to March of Dimes go?

by Anne Paddock

The March of Dimes is one of the most well-known charities in this country with a mission to improve the health of babies by preventing birth defects, premature birth, and infant mortality by enhancing the availability and quality of healthcare and prevention services for women and babies with specific programs (to see which programs are funded in your state, check with the local chapter). Few people can resist contributing to an organization that “helps moms and babies in your community” but before making a charitable donation to the March of Dimes, it is important to understand where your dollars are going.

We all want our charitable dollars to help the needy (in this case, moms and babies) and although most people understand that charities have to spend money to make money and that non-profits need to compensate employees well to retain them, we don’t want our dollars used to pay big salaries and support a lot of overhead. To know where dollars are coming from and where these dollars are spent, it is necessary to read the organization’s IRS Form 990, which ran 92 pages in length in 2014.  Since most people don’t have the time to analyze and decipher the financial data reported on the 990 by the March of Dimes, a summary follows:

  • In 2014, the March of Dimes received $196 million in revenue, with the majority ($187 million) from contributions, fundraising events, and grants (the other $9 million came from investment income, program services and other sources).
  • March of Dimes used Infocision Management Group (IMG) for fundraising telemarketing. IMG raised $7.4 million and were compensated $3.1 million (42 cents of ever dollar raised), netting March of Dimes $4.3 million (58 cents of every dollar). The organization also used Advanced Business Technology for telemarketing. They raised $654,000 and were compensated $188,000 (29 cents of every dollar raised) netting March of Dimes $466,000 (71 cents of every dollar).
  • The March of Dimes spent $204 million ($8 million more than what they brought in) and were able to because the organization has assets from previous years that were saved. At year-end, they had $70 million in publicly traded securities, $21 in other securities – primarily in a hedge fund, $9 million in cash, $4 million in other short-term assets and more totaling $140 million in assets. Liabilities – primarily accrued pension liabilities and medical benefits for employees – totaled $115 million, leaving $25 million in net assets.
  • $96 million (49%) was spent on salaries, pensions, employee benefits, and payroll taxes. 129 individuals received more than $100,000 in compensation. 60 independent contractors received more than $100,000 in compensation. 10 executives (President, Executive VP, Asst Secretary, Asst Treasurer, Medical Director and five Senior VP’s) received a collective $3.3 million (ranging from $255,000  to $510,000).
  • March of Dimes reports First Class or Charter Travel and Tax Indemnification and Gross Up Payments. The reason for Business or First Class travel:  to “minimize change fees” when the President of the organization travels.
  • Of the $96 million spent on salaries, pensions, employee benefits, and payroll taxes, $73 million was paid to employees in program services while $23 million was for employees in management and fundraising.
  • $29.6 million (15%) was given to 297 programs (primarily domestic).
  • $19.9 million (10%) was spent on printing.
  • $13.8 million (7%) was spent on other service expenses (no further detail because this number does not exceed 10% of total expenses so the IRS does not require a breakdown).
  • $11.2 million (6%) was spent on postage and shipping.
  • $9.2 million (5%) was spent on travel, conventions, conferences, and meetings.
  • $8.5 million (4%) was spent on occupancy.
  • $6.2 million (3%) was spent on telemarketing/data fees, and other expenses (legal, accounting, equipment rental, interest, professional fundraising services, etc).

In other words, a $1 contribution to the  March of Dimes was spent as follows:

$ 1.00:   Contribution

-$0.37:   Salaries, pensions, benefits, etc. for program service staff

-$0.12:   Salaries, pensions, benefits, etc. for management and fundraising staff

-$0.10:   Printing

-$0.07:   Other Service Expenses

-$0.06:   Postage and Shipping

-$0.05:   Travel, Conventions, Conferences, Meetings

-$0.04:   Occupancy

-$0.03:   Telemarketing/Data Fees

-$0.01:   Other Expenses

-$0.85: Total Expenses

-$0.15: Grants and Assistance to Programs


It is important to note that there are those who will argue that a portion of the printing, other service expenses, postage and shipping, travel, convention, conferences, meetings, occupancy, and telemarketing/data fees should be part of program service expenses but these expenses are not necessarily monies that go directly to help moms and babies. Many contributors don’t want their charitable dollars to go to rent or mortgage payments, lawyers, accountants, telemarketers, hotels, restaurants, convention centers, equipment rental companies, fundraising services, etc. – when these expenses total millions and millions of dollars.

The argument that program service staff salaries (and benefits) benefit moms and babies is a stronger argument in that these people administer educational and outreach programs to help moms and babies. And, yet without knowing what these positions are (the 990 does not provide this information), it is difficult to know how much of the money spent on these staff positions –  37 cents out of every dollar – directly benefits moms and babies (compared to grants given to research).

Based on the IRS Form 990, it appears that 52 cents (37 cents for program service staff and 15 cents for grants and assistance to programs although these entities also have management and fundraising costs) out of every $1 donated goes more towards directly helping moms and babies, although that number may be less depending on what the program service staff positions are. The remaining 48 cents goes to pay the salaries and benefits of management and fundraisers, printing, postage, shipping, travel, conventions, conferences, meetings, occupancy, telemarketing, legal, accounting, interest, fundraising services, equipment rental, and other expenses.

To read the March of Dimes 2014 IRS Form 990, click here.

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