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December 15, 2019

Where Does $100 to Big Brothers Big Sisters Go (2018)?

by Anne Paddock

Big Brothers Big Sisters includes more than 250 non-profit organizations nationwide:

  • The national office:  Big Brothers Big Sisters of America (BBBSA)
  • The foundation:  Big Brothers Big Sisters Foundation (BBBAF)
  • The affiliates: 250 local affiliate offices

BBBSA is the largest of the Big Brothers Big Sisters organizations (in terms of revenue raised) so the focus of this post will be on the national office and how they spent revenue in 2018 (but don’t hesitate to read the Form 990 for your local affiliate to find out how they spent revenue).

It is important to note that if a contribution was given to the national office, the revenue was spent differently than if given to a local office because at the national level, revenue was basically spent three ways: supporting the national organization’s staff and overhead including fundraising, providing grants, and providing education and support to the affiliates. The provision of grants is not the local affiliates’ mission; instead, the local affiliate is the receiver of grants which are used to provide program services at the local level.

In 2018, BBBSA raised $26.8 million ($3.6 million more than the year before), which primarily came from three sources:  contributions, gifts, and grants ($15.7 million),  government grants ($7 million), and membership fees, AIM (Agency Information Management) fee revenue from affiliates, and national conference registration fees ($4.1 million).

Expenses totaled $22.3 million and can be viewed two ways: by broad general category (i.e. grants, program services, management and general expenses, and fundraising) or by specific line item category (i.e. grants, compensation, fees for services, office-related expenses, travel, etc), the latter of which provides more detail on how revenue was spent.

The difference between revenue raised ($26.8 million) and revenue spent ($22.3 million) is $4.5 million, which went into the general fund thereby increasing the net balance to $10.6 million at year-end. In other words, $17 out of every $100 in revenue went to the fund balance which shows the organization is focused on building their endowment.

Expenses by Broad General Category

The $22.3 million in expenses were categorized as follows:

  • $12.2 million (45% of revenue):  Grants
  • $ 8.4 million (31% of revenue):  Program Services
  • $  .7 million (3% of revenue):  Management and General Expenses
  • $ 1.0 million (4% of revenue):  Fundraising

It is important to note that grants are included as part of Program Services on the Form 990 but it is helpful to show grants and program service expenses separately, especially if the primary purpose of an organization is to award grants. Separating grants allows the reader to quickly ascertain how much revenue is going to grants.

As illustrated above, $12.2 million in grants were awarded, which is $1.2 million less than the year before ($13.4 million). Although the BBBSA raised $3.6 million more in 2018, the organization appears to have been more focused on retaining revenue than providing more grants or even making the same level of grants to affiliates in 2018.

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

$100:  Revenue

-$ 45:  Grants

$ 55:  Revenue Remaining

-$ 31:  Program Services

-$  3:  Management and General Expenses

-$  4:  Fundraising

-$ 38:  Subtotal Program, Management and Fundraising Expenses

$  17:  Revenue Remaining:  To General Fund

As illustrated above, $45 out of every $100 in revenue was awarded in grants to Big Brother Big Sister affiliates (compared to $58 out of every $100 the prior year). BBBSA spent $38 out of every $100  on program services, management and general expenses, and fundraising (compared to $39 the previous year). The remaining revenue – about $17 out of every $100  or about $4.5 million went to the general fund which had a net fund balance of $10.6 million at year-end (compared to $5.9 million at the beginning of the year).

Expenses by Specific Line Item Category

The $22.3 million in expenses were categorized as follows:

  • $12.2 million (45% of revenue):  Grants
  • $ 4.5 million (17% of revenue):  Compensation
  • $ 3.4 million (13% of revenue):  Fees for Services (i.e. accounting, recruitment, fundraising, consultants, etc)
  • $ 1.5 million (5% of revenue):  Office-related Expenses
  • $  .7 million (3% of revenue):  Travel

Compensation for the 53 employees (compared to 60 employees the previous year) totaled $4.5 million which equates to an average compensation of $85,000 (compared to $72,000 the prior year).  Fees for services – $3 million – were for outside services – primarily fees for services and programs, and consultants.

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

$100:  Revenue

-$ 45:  Grants

$ 55:  Revenue Remaining

-$ 17:  Compensation

-$ 13:  Fees for Services

-$  5:  Office-Related Expenses

-$  3:  Travel

-$ 38: Subtotal: Compensation, Fees, Office, and Travel

$   17:  Revenue Remaining: To General Fund

As illustrated above, $38 out of every $100 was spent on compensation, fees, office, and travel expenses. $45 out of every $100 was awarded in grants to affiliates. 114 grants were awarded with the 20 largest grant awards listed as follows:

  • $503,873:  BBBS of Metropolitan Chicago
  • $497,539:  BBBS of Kentuckiana, Inc.
  • $439,871:  BBBS of Middle Tennessee
  • $438,476:  BBBS of Puget Sound
  • $404,980:  BBBS Services, Inc. (Richmond, VA)
  • $364,055:  BBBS Independence Region (Philadelphia)
  • $357,271:  Kansas BBBS, Inc.
  • $332,754:  BBBS of Colorado, Inc.
  • $285,453:  BBBS of Lone Star (Irving, TX)
  • $263,512:  BBBS of the National Capital Area (Washington, DC)
  • $263,348:  BBBS of South Texas
  • $261,904:  BBBS of the Triangle (Moorisville, NC)
  • $259,973:  BBBS of Tampa Bay, Inc.
  • $248,778:  BBBS of Miami
  • $224,561:  BBBS of NYC, Inc.
  • $207,414:  BBBS of Orange Country (Santa Ana, CA)
  • $207,315:  MMS of Massachusetts Bay (Boston, MA)
  • $205,689:  BBBS of Greater Pittsburgh, Inc.
  • $178,116:  BBBS of Central Texas, Inc. (Austin, TX)
  • $172,110:  BBBS of Utah, Inc. (Salt Lake City, UT)

Summary and Bottom Line

The national office of BBBS raised $26.8 million last year from both contributions and grants from the government – an increase of 15% or $3.6 million more than the year before.  Despite the increase in revenue, BBBSA kept total expenses stable at about $22.3 million  (although grants were $1.2 million lower than the previous year but other expenses were about $1 million higher than the year before so the decline in grants was offset by an increase in other expenses). In addition, it is interesting to note the number of staff were lower (53) than the previous year (60) but they were paid more (an average of $85,000 in 2018 compared to $72,000 in 2017).

About 45% of revenue was spent on grants to about 114 BBBS affiliates (there are 250 affiliate offices) so not all affiliates benefit from grants.

The bottom line is that BBBSA appears to be focused on building their endowment which nearly doubled in a year (from $5.9 million to $10.6 million).

To read the IRS Form 990 (2017) for the year ending June 30, 2018, click here.

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