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April 6, 2017

Where does $100 to USA For UNHCR Go?

by Anne Paddock

Commercials for USA for UNHCR televising the plight of refugees across the world have been playing on various networks lately. Showing refugees – especially children – at their most vulnerable is enough to make most people pick up the phone and make a donation but beware because the most recent financial information (IRS Form 990 2015) indicates that less than 60 cents of every dollar donated to this organization goes to THE UN organization that helps refugees.

USA (United States Association) for UNHCR (United Nations High Commissioner for Refugees) is a Washington, DC-based not-for-profit 501 (c) (3) that collects donations for the UNHCR – a separate organization that provides shelter, water, food, and protection for refugees through the United Nations (UN). UNHCR is also known as the UN Refugee Agency and is a member of the United Nations Development Group which is governed by the UN General Assembly. USA for UNHCR is a basically a charitable organization in the USA that that has partnered with UNHCR to solicit and collect funds for UNHCR.

In 2015, USA for UNHCR collected $47.4 million, of which $44.9 million were cash contributions, gifts, and grants while $2.5 million were non-cash donations (marketable securities, clothing, shoes, software). Expenses totaled $41.9 million (with $39.9 million being cash expenses and $2 million non-cash grants) which means the organization spent 89% ($39.9 million) of the total revenue collected ($44.9 million). The remaining funds went in the net fund balance (like a savings account) of USA for UNHCR.

Cash contributions and cash expenses can be analyzed two ways:  by category (program, management, fundraising, grants) or by line-item with the later providing more detail on where dollars were spent.

If you donated $100 to USA for UNHCR in 2015, how much of that donation went to the refugees? The short answer is that $59 of that $100 was given in grants to UNHCR (who deducts functional expenses before using the funds) while $21 was spent on fundraising, $3 on management, $6 on programs, leaving $11 in which the organization placed in savings, as illustrated below:

$100:  Contribution

-$  21:  Fundraising

-$   3:   Management

-$   6:   Program Expenses

-$  59:  Grants

-$  89:  Subtotal Expenses

$   11:  Amount Remaining to the Fund Balance (like a savings account)

If cash expenses are looked at by line item, the $100 cash contribution was spent as follows:

$100:  Contribution

-$   8:  Compensation and Benefits

-$   8:  Office

-$   6:  Advertising

-$   4:  Other Services, Legal, and Accounting

-$   2:  Royalties

-$   1:  Merchant Fees, Dues, Subscriptions, List Costs

-$   1:  Travel and Conferences

-$ 30:  Subtotal Functional Expenses

$  70:  Amount Remaining

-$ 59:  Cash Grants

$  11:   Amount Remaining to Fund Balance (like a savings account)

As illustrated above, the amount that goes to the UN for refugees does not change but the detail shows where the rest of the donation was specifically spent.

The IRS Form 990 (2015) also reveals the following information:

15 independent contractors received more than $100,000 in compensation, most of which appear to be telemarketing, direct mail, social media, list rentals, and advertising. The most highly compensated contractors were:

  • Gabriel Group of Earth City, MO:  $2.7 million
  • M&R Strategic Services of Washington, DC:  $1.9 million
  • Direct Donor Television of Bowie, MD:  $570,000
  • PMG of Columbia, MD:  $488,500
  • Names in the News of Oakland, CA:  $396,626

What the 990 does not tell the reader is three things:  how much the telemarketing and direct mail firms raised, how much they retained or were compensated, and how much USA for UNHCR was provided. So, if contributions were given to telemarketing companies, then the donation was further diluted before reaching USA for UNHCR.

Outside of grants, the organization’s highest expense is for compensation and benefits for the 88 employees.  $3.5 million was spent in this category in 2015 ($8 out of every $100) of which $1.4 million was provided to 7 staff:

  • Anne-Marie Grey, Executive Director:  $346,407
  • Franklin Guerrero, Sr Director of Development:  $208,603
  • Brian Reich, Director, Digital Hive:  $193,557
  • Charles L Anderson, Sr Advisor, Program and Strategy: $186,902
  • Edward McNeal, Director, Major Gifts:  $149,819
  • Jennifer L Patterson, Director, Communications:  $154,440
  • Abraham S. Fichman, Director, Finance and Business: $131,568

USA for UNHCR paid $855,231 in royalties in 2015 but the recipient is not listed, although it appears to be the UN, UNHCR, or an organization affiliated with the UN.

No first class, charter travel, companion travel, or fees to health or social clubs were paid.

At the end of 2015, USA for UNHCR had $19.8 million in assets with $15.4 million in cash and liquid investments followed by $3.1 million in receivables and $1.2 million in prepaid expenses. Liabilities totaled $8.9 million of which $8.2 million was due to UNHCR, leaving net assets of $10.9 million (which was up from $5.4 million the prior year). The increase in net assets by more than $5.5 million was because the organization did not spend all the cash donations.

In conclusion, USA for UNHCR appears to be primarily a fundraising organization for UNHCR, giving $59 of every $100 collected to UNHCR. For donors that want dollars to go further, then they may want to consider bypassing USA for UNHCR and making a donation directly to UNHCR. Unfortunately, the website for UNHCR provides a donation link right back to USA for UNHCR – an organization they partner with to raise funds.

To read the IRS  Form 990 (2015) click here.

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