Where does $1 to the ASPCA go?

The American Society for the Prevention of Cruelty to Animals (ASPCA) works to ensure the safety and protection of animals through education, animal health services, anti-cruelty operations, community outreach, disaster/emergency services, and government relations. A 501 (c) (3), the ASPCA files an IRS Form 990 annually which provides financial information on the organization to the public.

The most recent IRS Form 990 (2014) reveals the following information:

The ASPCA raised $191 million of which $164 million (86%) came from contributions, grants, gifts, and campaigns while $15 million (8%) came from program service fees and $12 million (6%) from investment income, sale of assets, royalties, miscellaneous income, and fundraising events.

Functional expenses (net of depreciation) totaled $171.2 million (90% of revenue) spent as follows:

• $62.5 million (33% of revenue) for salaries, pension, benefits, and payroll taxes;
• $6 million (3% of revenue) for salaries, pension, benefits, payroll taxes, severance, and consulting to key employees
• $26.9 million (14% of revenue) for advertising and promotion;
• $22.2 million (12% of revenue) for office, IT, occupancy, insurance, repair and maintenance;
• $15.1 million (8% of revenue) for operating supplies
• $8.5 million (4% of revenue) for other expenses (no detail provided);
• $5.9 million (3% of revenue) for legal, accounting, management, lobbying, professional fundraising, and investment fees;
• $5.3 million (3% of revenue) for veterinary and medical services, and transport;
• $4.6 million (2% of revenue) for travel, conferences, conventions, and meetings; and
• $14.2 million (8% of revenue) for grants to other organizations. 1,288 grants were given to 844 organizations with 315 non-profits (501 (c) (3)’s)  receiving more than $5,000. These grants were primarily for spay/neuter, live release, anti-cruelty, intake reduction, relocation, and equine programs.

Details on the above include the following reported information:

The ASPCA has 953 employees. 128 staff receive in excess of $100,000 in compensation. 23 key executives were given $6 million in compensation (although $416,660 were severance payments to two former employees and $191,66 was for consulting services for the former President and CEO):

1. Mathew Bershadker, President and CEO:  $538,057 (including a $100,000 bonus)
2. Edwin Sayres, Former President and CEO:  $191,666 (for “consulting services” for 1 year; 5 equal payments)
3. Steven Hansen, COO through 10/15/13:  $289,660 (severance package)
4. Melissa Norden, Former SVP and Chief of Staff:  $127,000 (severance package)
5. Elizabeth Estroff, SVP Communications:  $332,792
6. Louise Murray, VP Animal Health:  $326,823
7. Todd Hendricks, SVP Development and Marketing:  $321,236
8. Jed Rogers, III DVM, SVP Animal Health Services:  $315,329
9. Stephen Musso, EVP Capital Projects:  $313,501
10. Julie Morris, SVP Community Outreach:  $307,542
11. J’Mai Gayle, Director of Surgery:  $300,046
12. Sarah Levin Goodstine, SVP Operations:  $280,207
13. Nancy Perry, SVP Government Relations:  $269,238
14. Arturo Rios, SVP HR through 10/31/14:  $268,133
15. Randall Lockwood, SVP Forensic Sciences:  $263,293
16. Stacy Wolf, SVP Cruelty:  $261,997
17. Gail Buchwald, SVP Adoption Center:  $240,168
18. Beverly Jones, SVP and CLO:  $229,207
19. Wilhelmina Waldman, VP Philanthropy:  $222,368
20. Elysia Howard, VP Marketing and Licensing:  $210,886
21. Bert Troughton, SVP Strategy Management:  $210,129
22. Mark Abrahams, SVP and CFO through 4/16/14:  $125,628
23. Johanna Richman, SVP and CFO:  $91,081

If the above compensation packages totaling $6 million are deducted from the total amount spent on compensation for all employees ($68.5 million) then $62.5 million was spent on 930 employees which equates to an average of $67,204 per employee.

148 contractors were paid in excess of $100,000 with the five largest being:

1. $15.6 million:  Eagle-Com, Inc.:  Media Broadcast
2. $ 7.3 million:  True North, Inc.:  Media Placement
3. $ 4.2 million:  Patton Kiehl:  Data Processing
4. $ 2.7 million:  SMS Direct, Inc.:  Printing Services
5. $ 2.1 million:  Forum Group Services, Inc.:  Staffing Agency

Three professional fundraisers were paid $2 million to raise $11.8 million through direct marketing, fundraising services, and membership appeals. In other words, for every dollar raised, 17 cents was paid to the fundraiser while 83 cents was given to the ASPCA.

The ASPCA reported $233 million in total assets at year-end, of which $149 million (64%) were in liquid investments (cash, securities), $44 million (19%) were in land, buildings, and equipment, $21 million (9%) in beneficial interests in perpetual trusts, $15.8 million (7%) in accounts receivable, and $3.7 (1%) million in prepaid expenses.

Liabilities totalled $26.5 million, $14.1 million of which is deterrent rent, annuity obligations, and unfunded pension obligations.  $9.5 million are account payable while $2.9 million are grants payable.

Net assets totaled $206.6 million at year-end – up $8.7 million from $197.9 million from the previous year primarily because the ASPCA did not spend as much as they collected (which was mitigated by about $6 million in investment losses).

In summary, $1 in revenue was spent as follows:

$1.00:  Revenue

-$0.33: Salaries, benefits, pension, and payroll taxes to employees

-$0.03: Salaries, benefits, pension, payroll taxes, severance, and consulting fees to 23 key employees

-$0.14:  Advertising and promotion

-$0.12:  Office, IT, occupancy, insurance, repair and maintenance

-$0.08: Operating supplies

-$0.04: Other expenses

-$0.03: Legal, accounting, mgmnt, lobbying, professional fundraising, and investment fees

-$0.03:  Veterinary and medical services, and transport

-$0.02:  Travel, conferences, conventions, and meetings

-$0.82:  Subtotal Functional Expenses

 $0.18:  Amount Remaining

-$0.08: Grants to other organizations for spay/neuter, anti-cruelty, live release, etc. programs

$0.10:  Amount Unspent

The bottom line is that the ASPCA raised nearly $200 million dollars in 2014 and spent 90%. The organization is staff intensive because of the services provided (i.e. spay/neuter, education, veterinary services, etc) and yet more donations were left unspent (nearly $17 million in 2014) than were delivered in grants to other organizations ($14 million) providing these services. Given that the ASPCA has more than $200 million in net assets, these funds could have been put to use in other programs instead of being added to the fund balance. The $6 million in compensation provided to 23 key employees (of which more than $600,000 was for severance packages to two former employees and “consulting” services from the past President) and more than $500,000 to the President and CEO is notable  (although one key staff person is a veterinarian). And, finally 14 cents of every dollar being spent on advertising and promotion is nearly twice as much as is spent on grants to other non-profits providing spay/neuter, live release, equine, and anti-cruelty programs.

To review the complete ASPCA 2014 IRS Form 990, click here.

Update:  To read the analysis based on the ASPCA 2015 IRS Form 990, click here.