How is Revenue Spent at the ASPCA?

The ASPCA is one of the most widely recognized non-profits focused on animal welfare in the country.  Founded in 1866, the ASPCA has been around for more than 150 years.  As is the case with most non-profits, the issue isn’t whether the ASPCA does good things (they do) but  whether they could do more or better with the public support they receive.

The Form 990 (2016) submitted to the IRS reveals the following key information about the ASPCA including Revenue and Expenses, Assets and Liabilities, Independent Contractors, and Fundraising:

REVENUE and EXPENSES

$217.4 million in revenue was reported, most of which came from contributions, gifts, and grants ($197 million or 91% of total revenue) and program service revenue ($13.6 million or 6% of revenue).

Expenses totaled $203 million (not including $5.4 million of depreciation) and can be looked at two ways: by broad category (Program, Grants, Management, and Fundraising) or by specific line item category (i.e. compensation-related, travel and conferences, veterinary and medical services, etc). Each approach is valuable with the former providing a general overview while the later provides specific information on how revenue was spent.

Expenses by Broad Category (Program, Grant, Management, and Fundraising)

$203 million in expenses were reported in the following four categories:

• $139.0 million (or 64% of revenue):  Program Expenses
• $ 14.1 million or (6% of revenue):  Grants
• $ 10.1 million (or 5% of revenue):  Management Expenses
• $ 39.8 million (or 18% of revenue):  Fundraising Expenses

After the above expenses were covered, the ASPCA had $14.4 million (7% of revenue) which was added to the fund balance. At year-end the net fund assets were $231.3 million.

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

 $100:  Revenue

-$  18:  Fundraising Expenses

-$   5:   Management Expenses

–$ 23:  Subtotal:  Fundraising and Management Expenses

 $ 77:  Revenue Remaining

-$ 64: Program Expenses

-$   6:  Grants

-$ 70:  Subtotal:  Program Expenses and Grants

$  7:  Amount Remaining:  To Fund Balance

$   0

As illustrated above, the ASPCA spent $23 out of every $100 in revenue on fundraising and management expenses, and $70 out of every $100 on program expenses and grants, leaving $7 out of every $100 for the fund balance.

Expenses by Specific Line Item Category

$203 million in expenses were reported in the following specific line item categories:

• $ 79.5 million (or 36% of revenue):  Compensation-Related Expenses
• $ 38.7 million (or 18% of revenue):  Office-Related Expenses
• $ 34.0 million (or 16%  of revenue):  Advertising and Promotion
• $ 14.1 million (or 6% of revenue):  Grants
• $ 12.4 million (or 6% of revenue):  Other Expenses (primarily fees for unspecified services)
• $ 12.2 million (or 6% of revenue):  Veterinary and Medical Services and Operating Supplies
• $  7.3 million (or 3% of revenue):  Travel and Conferences
• $  4.8 million (or 2% of revenue):  Fees for Services (mgmnt, legal, acct, lobbying, fundraising, investment)

As illustrated above, the largest expense was compensation-related expenses which totaled $79.5 million for 1,177 employees which equates to an average compensation of $68,000, although 161 individuals received more than $100,000 in compensation with the most highly compensated employee the President and CEO, Mathew Berdshadker who received $463,651.

$36 out of every $100 in revenue was spent on staff related expenses) which is to be expected given that the purpose of the organization is to educate the public and provide services that involve animal welfare. Office-related expenses (office, IT, occupancy, insurance, repair and maintenance, dues and membership) were $38.7 million or $18 of  every $100 in revenue) which is, in part because the organization is based in New York City where the costs of staffing an office are generally higher than in other parts of the country.

The ASPCA spent $34 million (or $16 out of every $100 in revenue collected) on advertising and promotion – more than what was spent on grants ($14.1 million) and veterinary and medical services and operating supplies ($12.2 million).

$12.4 million or $6 out of every $100 was spent on fees for outside services that were not specified.

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

$100:  Revenue

-$ 36:   Compensation-Related Expenses

-$ 18:  Office-Related Expenses

-$ 16:  Advertising and Promotion

-$  6:  Grants

-$  6:  Other Expenses (primarily fees for unspecified services)

-$  6:  Veterinary and Medical Services and Operating Supplies

-$  3:  Travel and Conferences

-$  2:  Fees for Services (mgmnt, legal, acct, lobbying, fundraising, investment)

-$ 93: Total Expenses

$   7:  Amount Remaining:  to Net Fund Assets

As illustrated above, a significant portion of revenue – $142.7 million ($65 out of every $100) was spent on staff, office, fees for services, and travel and conferences. $34 million (or $16 out of every $100) was spent on advertising and promotion while $26.3 million was spent on grants, veterinary and medical services, and operating supplies.

ASSETS and LIABILITIES

The ASPCA reported total assets of $262.4 million with $172 million in cash, publicly traded securities, and investments and $50 million in land, building and equipment (primarily land, buildings and leasehold improvements),  and $19 million in perpetual trusts.

Liabilities totaled $31 million with $17 million being annuity obligations, unfunded pensions, and deferred rent while $14 was for accounts payable and grants payable.

Net Assets were $231.3 million at year-end with $161.7 million unrestricted, $44.6 million temporarily restricted, and $25 million permanently restricted.

INDEPENDENT CONTRACTORS

The five highest paid independent contractors in 2016 were:

• $20.7 million:  Eagle-Com, Inc. of Toronto, Ontario for media broadcast
• $ 8.5 million:  True North of New York, NY for media placement
• $ 4.0 million:  SMS Direct, Inc. of Manassas, VA for printing services
• $ 3.8 million:  Forum Services Group, Inc. of New York, NY for staffing and consulting services
• $ 3.4 million:  Patton Kiehl of Thornburg, VA for data processing

FUNDRAISING

As stated above, the ASPCA spent nearly $40 million on fundraising. The four (4) highest paid individuals or fundraising entities were:

• Donor Services Group, LLC of Hollywood, CA raised $4 million and was compensated $1.6 million, netting the ASPCA $2.4 million. The organization kept 40% of what they raised.
• DialogueDirect, Inc. of New York, NY raised $2,428,910 million and was compensated $2,506,415 million, costing the ASPCA $77,505.
• Telefund, Inc. of Chicago, IL raised $1,033,185 and was compensated $361,399, netting the ASPCA $671,786.
• MDS Communications of Phoenix, AZ raised $185,635 and was compensated $56,930 (30%) , netting the ASPCA $128,735 (70% of donations).

In total, the four above organizations raised $7.7 million, were compensated $4.6 million (61% of revenue), netting the ASPCA $3.1 million (39%).

To read the IRS Form 990 (2016), click here.