Fundraising at Save the Children

Fundraising is a major function at most non-profits including the Save the Children organization in the US, which is legally known as Save the Children Federation, Inc. (referred to as Save the Children in this post). Based in Fairfield, Connecticut, Save the Children raised $760 million in 2017 and spent $720 million, $528 million (or 69% of revenue) of which was awarded in grants overseas, including grants to related organizations.

In 2017, Save the Children obtained most revenue from contributions:  $420 million from contributions, gifts and grants and $322 million from government grants. $67 million of those contributions, gifts, and grants were in the form on non-cash contributions (primarily food, drugs, and medical supplies). Another $18 million came from primarily from investment income, gains on investments, and fees for service contracts.

Total fundraising costs were $57 million in 2017, most of which was attributable to three areas:

• $22 million:  Compensation-Related Costs (Compensation, Benefits, Pensions, Payroll Taxes)
• $14 million:  Professional Fundraising Fees
• $14 million:  Office-Related Expenses

Save the Children engages in all types of fundraising activities including mail, internet, phone, and in-person solicitations. IN addition, the organization solicits government grants, non-government grants, and holds special fundraising events.

On the IRS Form 990 (2017) submitted by Save the Children to the IRS, the highest paid fundraisers were reported to be:

• New Canvasing Experience, Inc.:  A professional solicitor, this organization raised $2,227,449 and was compensated $4,312,900:  $2,085,451 more than they raised.
• Dialogue Direct, Inc.:  A professional solicitor, this organization raised $1,511,235 and was compensated $2,082,259:  $1,291,024 more than they raised.
• Ways Fundraising:  A professional solicitor, this organization raised $700,773 and was compensated $1,583,974:  $883,201 more than they raised.
• APCO Group USA:  A professional solicitor, this organization raised $783,323 and was compensated $1,551,831;  $768,508 more than they raised.
• UP Fundraising, Inc:  A professional solicitor, this organization raised $486,324 and was compensated $969,716;  $483,392 more than they raised.
• Givebridge, Inc.:  A professional solicitor, this organization raised $336,171 and was compensated $799,740; $463,569 more than they raised.
• Donor Services Group, LLC:  A professional solicitor, this organization raised $3,030,604 and was compensated $369,287 (12 cents of every $1 raised), netting $2,661,317 to Save the Children.
• Direct Point Group, Inc:  A fundraising council, this organization raised $2,906,006 and was compensated $576,808 (20 cents of every $1 raised), netting $2,329,298 to Save the Children.
• TrueSense Marketing: A fundraising council, this organization raised $1,209,996 and was compensated $537,026 (44 cents of every $1 raised), netting $672,970 to Save the Children.
• MDS Communications Corp:  A professional solicitor, this organization raised $765,724 and was compensated $534,553 (70 cents of every $1 raised), netting $231,171 to Save the Children.

If all of the above were considered collectively, these 10 organizations raised $13,957,605 and were compensated $14,038,094, costing Save the Children $80,489. Basically, Save the Children lost money using the above professional fundraisers. The information begs the question of why utilize fundraisers who cost more than they raise? And, for those considering donations, don’t respond to solicitors if you want your donation dollars to go further.

Save the Children held 11 fundraising events that raised $3,769,417. After deducting the contributions ($3,605,499), Save the Children had gross receipts of $163,918. Save the Children spent $781,656 on rental facility costs and other direct expenses which resulted in a loss of $617,738.  However, it is important to point out the IRS requires non-profits to net out the contributions so that expenses are netted out of receipts.

To read the IRS Form 990 (2017), click here.