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April 26, 2017

Where does $100 to Halifax Urban Ministries Go?

by Anne Paddock

Halifax Urban Ministries (HUM) “provides assistance with rent, utilities, clothing, medical, and food for needy families, and meals and shelter for the homeless.” Based in Daytona Beach, Florida, HUM is a non-profit 501 (c) (3) serving the local area in both preventing homelessness and assisting the homeless.

The following information is reported on the IRS Form 990 (2014) and/or the organization’s website:

HUM reported having 35 employees and 20 independent voting members (14 men and 6 women) of the governing board of the organization.

No one received more than $100,000 in total compensation. The Executive Director received total compensation of $91,053 in 2014.

No first class travel, social or club memberships, or companion travel was reported.

Total reported revenue was $2.8 million, of which $1.9 million were cash contributions, gifts, and grants, and cash from fundraisers while $900,000 were non-cash contributions.

Total reported expenses were $2.2 million, of which $1.2 million were non-cash grants in the form of food and clothing. The remaining $1 million was spent on program ($900,000) and management expenses ($100,000).  The specific line item expenses in program and management were reported to be:

  • Compensation and Benefits:  $675,000
  • Utilities, Supplies, Repairs, Maintenance, Insurance, Labor:  $200,000
  • Office, Occupancy, Accounting:  $125,000

The remaining revenue not spent – $600,000  – was added to the fund balance, which grew to $1.1 million at year-end and was concentrated in pledges and contributions receivable ($886,000), followed by cash ($160,000).

There are two ways to look at how a $100 contribution was spent:  based on whether the expense was a program or management expense or by line item with the line item providing more detail. It is also important to consider whether the contribution was a cash or non-cash expense. If the contribution was non-cash in the form of food or clothing, then the entire contribution appears to go directly to recipients. If the contribution was cash, then the contribution was spent differently.

Looking at just cash contributions and cash grants, the organization received $1.9 million in cash and had $1 million in cash expenses. But because the non-cash grants ($1.2 million) from the organization were higher than the non-cash contributions ($900,000) to the organization, HUM appears to have spent $300,000 on food and clothing for the intended. So, a $100 cash contribution appears to have been spent as follows:

$100: Contribution

-$ 35:  Salaries and Benefits

-$ 10:  Utilities, Supplies, Repairs, Maintenance, Insurance, Labor

-$  7:   Office, Occupancy, Accounting

-$ 16:  Food, Clothing, etc purchased and then granted as a non-cash grant

-$ 68: Subtotal Expenses

$  32:  To Fund Balance

In summary, HUM raises cash and collects non-cash contributions in the form of food and clothing. They also appear to buy food and clothing to distribute as a non-cash contribution. The majority of the organization’s cash is spent on 4 items:  staff, facilities, the office, and food/clothing although the organization did save nearly a third of cash contributions in 2014 and place these funds in their fund balance. If all the expenses except the “office, occupancy, accounting” expenses were considered as going directly to help the intended (since running a shelter and feeding people is labor intensive), then that translates to $61 of every $100. $32 of every $100 in cash contributions were put into savings while $7 of every $100 was used for  “office, occupancy, accounting.”

To read the IRS Form 990 (2014) click here.

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