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March 23, 2018

Where Does $100 to UNICEF Go?

by Anne Paddock

The United States Fund for UNICEF (“UNICEF”) is a non-profit organization primarily engaged in raising contributions and awarding grants to other organizations that work with health and education issues in more than 150 countries (but primarily in Sub-Sahara Africa).

Established in 1947, the organization is based in New York City in a headquarters that was acquired and equipped with a $43.5 million (which had a year-end balance of about $37.5 million) bond issue in 2007.

The IRS Form 990 (2015 for the year beginning July 1, 2015 and ending June 30, 2016) reports the following key information about UNICEF:

The organization employed 285 individuals who were collectively compensated $29.7 million (an average of $104,000 each) with 35 individuals receiving more than $100,000 in compensation.  The most highly compensated individual was Caryl M Stern (President, COO, and Director) who received total compensation of $618,244.

18 independent contractors received more than $100,000 in compensation. The five highest compensated contractors were:

  • $4.8 million:  EAGLECOM, Inc. of New York, NY for direct tv marketing
  • $2.8 million:  Charles River Interactive, Inc. of Waltham, MA for search engine marketing for USF Web property
  • $2.0 million:  Blackbaud of Atlanta, GA for database management
  • $ .6 million:  Scholastic, Inc. of Jefferson City, MO for market data services
  • $ .5 million:  MSP of Pittsburgh, PA for acknowledgement services

At year-end, UNICEF had $114 million in net fund assets.

UNICEF raised $553.2 million which was a $53 million increase over the previous year’s revenue. $418 million was cash revenue while $135.2 million were non-cash contributions (primarily drugs and medical supplies) which were awarded in a grant to an organization in Sub-Sahara Africa. It is important to note the non-cash contributions ($135.2 million) and the corresponding non-cash grant ($135.2 million) were the exact same amount.

Expenses were $543.5 million and can be viewed two ways:  by looking at the four broad expense categories (grants, program, management, and fundraising) or by specific expense category (i.e. grants, compensation, office, fees for services, etc). Both ways are beneficial with the later providing more detail.

Expenses By Broad Category (Grants, Program, Management, and Fundraising)

UNICEF is primarily engaged in raising funds and distributing those funds via grants to other organizations (primarily outside the United States with Sub Sahara Africa the largest recipient). The $543.5 million in expenses were reported as follows:

$553.2 million:  Total Revenue

-$465.3 million (or 84% of revenue):  Grants

-$ 41.4 million (or 7% of revenue):  Fundraising Expenses

-$ 22.1 million (or 4% of revenue):  Program Expenses

-$ 14.7 million (or 3% of revenue):  Management Expenses

-$543.5 million (or 98% of revenue):  Total Expenses

$    9.7 million (or 2% of revenue):  Amount Remaining:  To Net Fund Balance

Using the above information, $100 in revenue was spent as follows:

 $100:  Revenue

-$   7:  Fundraising Expenses

-$   4:  Program Expenses

-$   3:  Management Expenses

-$ 14:  Subtotal Fundraising, Program, and Management Expenses

$ 86:  Amount Remaining

-$ 84:  Grants

$   2:  Amount Remaining:  To Net Fund Balance

However, if the above analysis was done to exclude the non-cash contributions ($135.2 million) and non-cash grants ($35.2 million), then total cash revenue was $418 million while non-cash grants of $135.2 million reduces total (cash) grants to $330.1 million. A broad category expenses analysis would be:

$418 million:  Total Cash Revenue

-$330.1 million (or 79% of revenue):  Grants

-$ 41.4 million (or 10% of revenue):  Fundraising Expenses

-$ 22.1 million (or 5% of revenue):  Program Expenses

-$ 14.7 million (or 4% of revenue):  Management Expenses

-$408.3 million (or 98% of revenue):  Total Expenses

$    9.7 million (0r 2% of revenue:  Amount Remaining:  To Fund Balance

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$  10:  Fundraising Expenses

-$   5:  Program Expenses

-$   4:  Management Expenses

-$ 19:  Subtotal Fundraising, Program, and Management Expenses

$ 81:  Amount Remaining

-$ 79:  Grants

$   2:  Amount Remaining:  To Net Fund Balance

The difference in the two approaches above comes down to how non-cash contributions are viewed.  If the reader is only interested in how cash revenue was spent, then the second approach (that disregards non-cash contributions and non-cash grants) shows that $19 out of every $100 in revenue is spent on fundraising, program, and management expenses while $79 in cash grants were awarded.

Expenses By Specific Category

$553.2 million:  Total Revenue

-$465.3 million (or 84% of revenue):  Grants

-$  29.7 million (or 5% of revenue):  Compensation, Benefits, Pensions, Payroll Taxes

-$  14.1 million (or 3% of revenue):  Advertising, Printing,Telemarketing, Mailing List Rentals, Postage and Shipping

-$  13.4 million (2% of revenue):  Other Expenses (other fees for unspecified services and other expenses)

-$  8.5 million (2% of revenue:  Payments to Affiliates

-$  5.7 million (1% of revenue):  Office, IT, Occupancy, Repairs and Maintenance

-$  3.6 million (.5% of revenue):  Fees for Services (legal, accounting, fundraising)

-$  3.2 million (.5% of revenue):  Travel and Conferences

-$543.5 million (98% of revenue): Total Expenses

$   9.7 million (or 2% of revenue):  Amount Remaining:  To Fund Balance

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$   5:   Compensation, Benefits, Pensions, Payroll Taxes

-$   3:  Advertising, Printing,Telemarketing, Mailing List Rentals, Postage and Shipping

-$   2:  Other Expenses (other fees for unspecified services and other expenses)

-$   2:  Payments to Affiliates

-$   1:  Office, IT, Occupancy, Repairs and Maintenance

-$   1:  Fees for Services (legal, accounting, fundraising) and Travel and Conferences

-$ 14: Subtotal  Organization Expenses

$ 86:  Amount Remaining

-$ 84:  Grants

$   2:  Amount Remaining:  To Net Fund Balance

If the above analysis was done to exclude the non-cash contributions ($135.2 million) and non-cash grants ($135.2 million), then total cash revenue was $418 million while non-cash grants of $135.2 million reduces total (cash) grants to $330.1 million. A specific category expense analysis would be:

$418.0 million:  Total Revenue

-$330.1 million (or 79% of revenue):  Grants

-$  29.7 million (or 7% of revenue):  Compensation, Benefits, Pensions, Payroll Taxes

-$  14.1 million (or 3% of revenue):  Advertising, Printing,Telemarketing, Mailing List Rentals, Postage and Shipping

-$  13.4 million (3% of revenue):  Other Expenses (other fees for unspecified services and other expenses)

-$  8.5 million (2% of revenue:  Payments to Affiliates

-$  5.7 million (2% of revenue):  Office, IT, Occupancy, Repairs and Maintenance

-$  3.6 million (1% of revenue):  Fees for Services (legal, accounting, fundraising)

-$  3.2 million (1% of revenue):  Travel and Conferences

$408.3 million (98% of revenue): Total Expenses

$   9.7 million (or 2% of revenue):  Amount Remaining:  To Fund Balance

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$   7:   Compensation, Benefits, Pensions, Payroll Taxes

-$   3:  Advertising, Printing,Telemarketing, Mailing List Rentals, Postage and Shipping

-$   3:  Other Expenses (other fees for unspecified services and other expenses)

-$   2:  Payments to Affiliates

-$   2:  Office, IT, Occupancy, Repairs and Maintenance

-$   1:  Travel and Conferences

-$   1:  Fees for Services (legal, accounting, fundraising)

-$ 19: Subtotal  Organization Expenses

$ 81:  Amount Remaining

-$ 79:  Grants

$   2:  Amount Remaining:  To Net Fund Balance

The difference in the two approaches above comes down to how non-cash contributions are viewed.  If the reader is only interested in how cash revenue was spent, then the second approach (that disregards non-cash contributions and non-cash grants) shows that $19 out of every $100 in revenue is spent on fundraising, program, and management expenses, while $79 out of every $100 is spent on cash grants primarily to three areas:  $179 million to Sub-Sahara Africa, $49 million to South Asia, and $41 million to the Middle East and North Africa.

The bottom line is that UNICEF spent $19 out of every $100 in revenue to cover organization costs. About $79 out of every $100 in revenue was awarded to 9 other 501 (c) (3)’s and 1 other organization to meet the mission of the organization. What the 990 does not tell us is the specific 10 organizations that received the grants and how much each organization took out for program, management, and fundraising costs which would further dilute any cash donation to UNICEF.

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

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