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March 20, 2017

Where Does $100 to Samaritan’s Purse Go?

by Anne Paddock

Samaritan’s Purse – based out of Boone, North Carolina – is a non-profit 501 (c) (3) established in 1970 by Bob Pierce who died in 1978. W. Franklin Graham (son of Billy Graham) became Chairman, President, and CEO of Samaritan’s Purse in 1979 and has held the position since although he is also an evangelist for the Billy Graham Evangelistic Association. Samaritan’s Purse is a nondenominational Christian organization that provides “spiritual and physical aid to hurting people around the world.”

Key points (from the 2015 IRS Form 990) to know about Samaritan’s Purse are summarized as follows:

  • The organization raised nearly $600 million in 2015, of which $380 million were cash and $220 million non-cash.
  • The organization spent nearly $500 million (of which $208 million were non-cash expenses, grants) in 2015 with most of the remaining $100 million put into savings.
  • The organization gave grants totaling $223 million, of which $208 million were non-cash and $15 million were cash. Most revenue is used to support the organization: program, management, and fundraising costs.
  • The organization had nearly $400 million in their net fund balance (like a savings account) at FYE 2015  concentrated in publicly traded securities, cash, and land, buildings, and equipment.
  • The Chairman, President and CEO had total compensation of $822,233.
  • Ten other executives were paid a total of $2.6 million, with an average compensation package of $260,000.
  • Eight family members of the President, CEO received compensation/benefits totaling $367,000.
  • The President, CEO’s brother Roy Graham is a Board member.
  • The Assistant Treasurer has a family member, Richard Furman on the Board.
  • The organization reports first class or charter travel, travel for companions, housing allowance or residence for personal use, and personal services.
  • There are 18 voting members of the governing body, of which 12 are independent. 17 are men, 1 is a woman.
  • Most of the organization’s work is concentrated in Africa:  the largest recipients by region include Sub-Sahara Africa ($154 million), Asia: East and South ($61 million), and South and Central America  ($56 million). North America received $21 million.
  • The organization employs 2,295 employees at a total cost of $98 million (average compensation of $42,700).
  • The organization spent $39 million on fundraising.
  • The Executive Committee has 3 board members, 2 of which are independent. They can act on matters of business and financial concern (except for matters precluded by the by-laws).

According to the IRS Form 990 (2015) the organization raised $594 million in 2015, of which $220 million (37% of total revenue) were non-cash gifts – mostly shoebox gifts (a shoebox filled with toys, hygiene items, and school supplies) that were collected at more than 4,000 locations. The remaining revenue – $374 million (63% of total revenue) mostly came from cash contributions, gifts, and grants.

Samaritan’s Purse reported $492 million in expenses (not including depreciation) which represents 83% of total revenue. The remaining funds – approximately $82 million – were added to the fund balance which grew from $305 million the year before to $387 million at year-end after unrealized losses, joint costs, and changes in assets were deducted.

Expenses can be looked at two ways:  in the three broad categories of program, management, and fundraising or by line item.

Samaritan’s Purse reported $433 million (73% of revenue) in program expenses, $22 million (4% of revenue) in management expenses, and $37 million (6% of revenue) in fundraising expenses, not including depreciation. $102 million (17% of revenue) remained. $82 million (14% of revenue) was put into savings while $20 million (3% of revenue) was unrealized losses, changes in assets, and joint costs). Based on these figures, a $100 contribution was spent as follows:

$100:  Contribution

-$ 06:  Fundraising Expenses

-$ 04:  Management Expenses

-$ 73:  Program Expenses

-$83:  Subtotal Fundraising, Management, and Program Expenses

$ 17:  Remaining

-$ 03: Joint Costs, Asset Change

-$ 14:  To Fund Balance (Savings Account)

$   0

However, if only cash contributions and cash expenses are considered (meaning $220 million in non-cash revenue and the $208 million in non-cash grants are not included), then the total revenue was $374 million ($594 million less $220 million) while the total expenses were $284 million ($492 million less $208 million) which is 76% of revenue. $225 million ($433 million less $208 million) or 60% of revenue was spent on program expenses, $37 million (10% of revenue) on fundraising, and $22 million (6% of revenue) on management. $82 million (22% of revenue) went to the fund balance, and $8 million (2% of revenue) from unrealized losses, changes in assets, and joint costs.

$100:  Cash Contribution

-$ 10:  Fundraising Expenses

-$ 06:  Management Expenses

-$ 60:  Program Expenses

-$ 76:  Subtotal Fundraising, Management, and Program Expenses

 $ 24:  Amount Remaining

-$ 02: Joint Costs, Asset Change

-$ 22:  To Fund Balance (Savings Account)

$    0

Expenses by line item show that costs can be broadly categorized as follows:

  • Grants and Assistance to Foreign Organizations:  $220 million (37% of revenue)
  • Grants and Assistance to Domestic Organizations and Individuals: $3 million (1% of revenue)
  • Compensation (salaries, benefits, etc.):  $98 million (17% of revenue)
  • Materials and Supplies:  $61 million (10% of revenue)
  • Travel and Conferences:  $37 million (6% of revenue)
  • Office, IT, Occupancy, etc:  $29 million (5% of revenue)
  • Fees for Services (legal, accounting, other):  $21 million  (4% of revenue)
  • Advertising and Promotion:  $14 million (2% of revenue)
  • Bibles:  $8 million (1% of revenue)

A $100 contribution was spent as follows on the above line items:

$100:  Cash Contribution

-$ 17:  Compensation, Benefits

-$  5:  Office, IT, Occupancy, Etc.

-$  4:  Fees for Services (legal, accounting, other)

-$  2:  Advertising and Promotion

-$  6:  Travel and Conferences

-$ 10:  Materials and Supplies

-$ 44:  Subtotal

 $ 56:  Amount Remaining

-$ 37:  Grants and Assistance to Foreign Organizations

-$ 01:  Grant and Assistance to Domestic Organizations

-$ 01:  Bibles

$  17:  Amount Remaining

-$ 03: Joint Costs, Asset Change

-$ 14: To Fund Balance (Savings Acct)

$    0

Again, if only cash contributions and cash expenses are considered, then we see a $100 contribution was spent as follows:

$100: Cash Contribution

-$ 26: Compensation, Benefits

-$   8: Office, IT, Occupancy, Etc.

-$  6: Fees for Services (legal, accounting, other)

-$  3: Advertising and Promotion

-$ 10: Travel and Conferences

-$ 16: Materials and Supplies

-$ 69: Subtotal

 $ 31: Amount Remaining

-$ 4: Cash Grants and Assistance to Foreign Organizations

-$ 1: Cash Grant and Assistance to Domestic Organizations

-$ 2: Bibles

$ 24: Amount Remaining

-$  2: Joint Costs, Asset Change

-$ 22: To Fund Balance (Savings Acct)

$ 0

As illustrated above, the clarity of where cash is spent emerges when non-cash contributions and non-cash grants are eliminated).  Very little cash is given in the form of grants and assistance to foreign and domestic organizations. Instead, cash is primarily used to support salaries, benefits, office and overhead, travel, conferences, material and supplies, advertising, and promotion of the organization. In other words, cash is primarily used to run the machine – the 2,295 staff that administer the program, manage and raise funds for the organization.

Noteworthy information revealed on the tax return also include the following:

Of the $220 million in grants to entities outside of the US, approximately $203 million (92%) were shoebox gifts, $13 million were cash grants (6%), and $4 million (2%) were in materials and supplies.

Of the $3.3 million in grants to organizations and individuals in the United States, there were 26 organizations that received grants greater than $5,000 with the largest cash grants made to:

  • Jersey Shore United ($300,000)
  • Coney Island Cathedral ($262,680)
  • Missionary Flights International ($250,000)
  • Macedonia Baptist Church of Rockaway Beach ($153,223)
  • The Museum of the Bible ($100,000)
  • Mission Aviation Repair Center ($68,750)
  • Christian Light Missionary Baptist ($58,500)
  • Moody Aviation ($50,000)
  • Salem Evangelical Free Church ($50,000)
  • Gordon-Conwell Theological Seminary ($50,000)

The three largest recipients of expenditures by region were:

  • Sub-Sahara Africa:  $154 million
  • Asia (East and South):  $61 million
  • South and Central America :  $56 million

Samaritan’s Purse is a Christian organization managed by an 18-member board (17 men and 1 woman) that has 2,295 employees that are primarily engaged in administering programs, managing the organization or fundraising. Most grants given are in the form of non-cash leaving cash revenue to pay for the above three major category expenses (program, management, and fundraising) and for savings. In 2015, the organization increased their net fund balance by $82 million to nearly $400 million at year-end.

To read the 2015 IRS Form 990, click here.

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