How is $100 to the Carter Center Spent?

The Carter Center, Inc. (Carter Center) was established in 1981 as a 501 (c) (3) to “advance human rights and alleviate unnecessary human suffering.” Based in Atlanta, Georgia, the Carter Center is a very well endowed organization ($768 million as of August 31, 2017) that raises about $120 million annually. Rather than primarily operating as a grantor, the Carter Center works towards achieving their goals with their own staff and in conjunction with other partnerships.

In 2017, the Carter Center raised $118 million (about $11 million less than the prior year) which primarily came from three sources:  contributions and fundraising events ($65 million), investment income ($30 million), and government grants ($23 million).

$102 million in expenses were reported which can be viewed two ways:  by broad general category (i.e. program, grants, management, and fundraising) or by specific line item category (i.e. grants, compensation-related, office-related, travel and conferences, etc). Both are useful ways to look at how revenue was spent with the latter providing the reader with a more detailed look at spending.

Expenses by Broad General Category

$102 million in expenses were categorized as follows:

• $75 million (64% of revenue):  Program Expenses
• $ 9 million (8% of revenue):  Grants
• $ 9 million (8% of revenue):  Management Expenses
• $ 9 million (8% of revenue):  Fundraising Expenses

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

$100:  Revenue

-$ 64:  Program Expenses

-$  8:  Grants

-$  8:  Management Expenses

-$  8:  Fundraising Expenses

-$88:  Total Expenses

$12:  Revenue Remaining:  To Fund Balance

As illustrated above, the Carter Center spent $64 out of every $100 on program services and awarded $8 out of every $100 in grants (primarily to foreign organizations). $16 out of every $100 was spent on management and fundraising. $12 out of every $100 was retained by the organization in the fund balance.

Expenses by Specific Line Item Category

$102 million in expenses were categorized as follows:

• $35 million (30% of revenue):  Compensation-related Expenses
• $23 million (20% of revenue): Travel and Conferences
• $13 million (11% of revenue):  Consulting and Misc  Fees (health program consulting, peace consulting, fundraising, and misc fees)
• $10 million (9% of revenue):  Office-related Expenses
• $ 9 million (8% of revenue):  Grants
• $ 5 million (4% of revenue):  Intervention Expenses
• $ 4 million (3% of revenue):  Vehicles
• $ 2 million (2% of revenue):  Miscellaneous Expenses and Advertising
• $ 1 million (1% of revenue):  Fees for Accounting, Legal, and Fundraising

As illustrated above, the Carter Center’s largest expenses were compensation for the 263 employees who were compensated $35 million, which equates to an average compensation of $134,000, followed by travel and conferences. Of the $23 million spent on travel and conferences, $21 million was for travel, which equates to an average of $80,000 in travel expenses per employee. Given that not all employees travel, the travel costs for the employees appears high. Although not disclosed on the 990, there could be travel costs for volunteers.

As a comparison, the Clinton Foundation has 398 employees who were compensated $25 million.Their travel costs were $2.3 million in 2017.

Consulting and Miscellaneous Fees are primarily consulting fees for health programs and “peace” consulting (no further detail provided), and fundraising fees. It is unclear why fundraising fees were including in two categories within fees for services.

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

$100:  Revenue

-$ 30:  Compensation

-$ 20:  Travel and Conferences

-$ 11:  Consulting (Health, Peace, Fundraising, and Miscellaneous Fees)

-$  9:  Office-related Expenses

-$  8:  Grants

-$  4:  Intervention Expenses

-$  3: Vehicles

-$  2: Miscellaneous Expenses and Advertising

-$  1:  Fees for Accounting, Legal and Fundraising

-$ 88: Total Expenses

 $ 12:  Revenue Remaining: To Fund Balance

As illustrated above, $61 out of every $100 in revenue is spent on compensation for the 263 employees, travel, office-related expenses and miscellaneous expenses and advertising. $12 out of every $100 was spent on for service fees – primarily consulting fees for health, peace, and fundraising.  $15 out of every $100 was spent on grants, intervention expenses and vehicles.

The bottom line is that revenue is primarily spent on compensating employees (who travel a lot) and consultants, and the associated fees with programs, and office overhead.

To read the IRS Form 990 (2016) for the year ending August 31, 2017, click here.