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December 19, 2019

Where Does $100 to Samaritan’s Purse Go (2018)?

by Anne Paddock

Samaritan’s Purse – based out of Boone, North Carolina – is a non-profit 501 (c) (3) established in 1970 by Bob Pierce who died in 1978. W. Franklin Graham (son of Billy Graham) became Chairman, President, and CEO of Samaritan’s Purse in 1979 and has held the position since although he is also an evangelist for the Billy Graham Evangelistic Association.

Samaritan’s Purse is a nondenominational Christian organization that provides “spiritual and physical aid to hurting people around the world.”

Key points (from the 2018 IRS Form 990) to know about Samaritan’s Purse are summarized as follows:

  • The organization raised nearly $700 million in 2018, of which $247 million were non-cash contributions (primarily shoe boxes).
  • Samaritan’s Purse spent $672 million in 2018 with the three largest expenses being grants ($293 million), compensation ($144 million) and supplies/materials ($94 million).
  • The organization gave grants totaling $293 million, of which $229 million were non-cash:  $225 million of shoe boxes and $4 million of non-cash medical supplies/relief. Most revenue is used to support the organization: program, management, and fundraising costs.
  • Samaritan’s Purse had nearly $650 million in their net fund balance (like a savings account or endowment) at FYE 2018  concentrated in publicly traded securities, cash, and land, buildings, and equipment.
  • The Chairman, President and CEO, William Franklin Graham III  received total compensation of $696,193 in 2018. It is important to note Mr. Graham also manages the Billy Graham Evangelistic Association and other organizations.
  • Twelve other executives were paid a total of $3.5 million, with an average compensation package of $292,000.
  • The President, CEO’s brother Roy Graham is a Board member, as is Melvin Graham, a cousin.
  • The organization reports first class or charter travel, travel for companions, housing allowance or residence for personal use, and personal services.
  • There are 18 voting members of the governing body, of which 12 appear to be independent. 16 are men, 2 are women.
  • Most of the organization’s work is concentrated in Africa:  the largest recipients (primarily non-cash grants consisting of shoe boxes filled with toys, school supplies, bibles, etc) by region include Sub-Sahara Africa ($166 million), South and Central America  ($93 million), and Asia:  East and South ($63 million). North America received $23 million.
  • The organization employs 2,965 employees at a total cost of $144 million (average compensation of $48,600).
  • Samaritan’s Purse spent $50 million on fundraising in 2018.
  • The Executive Committee has 3 board members, 2 of which are independent. They can act on matters of business and financial concern (except for matters precluded by the by-laws).

According to the IRS Form 990 (2018) the organization raised $700 million in 2018, of which $247 million (35% of total revenue) were non-cash gifts – mostly shoebox gifts (a shoebox filled with toys, hygiene items, bibles, and school supplies) that were collected at more than 4,000 locations. The remaining revenue – $423 million (65% of total revenue) mostly came primarily from cash contributions, gifts, and grants.

Samaritan’s Purse reported $672 million in expenses (including $17 million in depreciation) which represents 96% of total revenue. The remaining funds – approximately $28 million – were added to the fund balance which grew from $627 million the year before to $650 million at year-end after unrealized losses, joint costs, and changes in assets were deducted.

Expenses can be viewed two ways:  by broad general categories (i.e. grants, program services, fundraising, management and general expenses) or by specific line item expense (i.e grants, compensation, travel and conferences, office-related expenses, etc).  Both are beneficial with the latter approach providing more detail.

Expenses by Broad General Category

Samaritan’s Purse reported $672 million (96% of revenue) in program expenses, allocated as follows:

  • $229 million (33% of revenue):  Non-cash grants (primarily shoe boxes)
  • $ 64 million (9% of revenue):  Other grants
  • $295 million (42% of revenue):  Program Services
  • $ 50 million (7% of revenue):  Fundraising
  • $ 34 million (5% of revenue):  Management and General Expenses

As illustrated above, the highest expense for Samaritan’s Purse is grants, most of which were from non-cash contributions (primarily shoe boxes). Using the above information, $100 in revenue was spent as follows:

$100:  Contribution

-$  7:  Fundraising

-$  5 :  Management Expenses

-$ 42:  Program Expenses

-$ 42:  Grants ($33 in non-cash and $9 in cash)

-$ 96:  Total Expenses

$  4:  Remaining Revenue:  To Fund Balance

However, if only cash contributions and cash expenses are considered (meaning $247 million in non-cash revenue and $229 million in non-cash grants are excluded), then the total revenue was $453 million ($700 million less $247 million) while the total expenses were $443 million ($672 million less $229 million) which is 98% of revenue. Expenses would be allocated as follows:

  • $295 (65% of revenue):  Program Services
  • $ 64 million (14% of revenue):  Grants
  • $ 50 million (11% of revenue):  Fundraising
  • $ 34 million (8% of revenue):  Management and General Expenses

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

$100:  Cash Contribution

-$ 11:  Fundraising Expenses

-$ 08:  Management and General Expenses

-$ 14:  Grants (Cash)

-$ 65:  Program Expenses

-$ 98:  Total Fundraising, Management, Grants, and Program Expenses

 $  2:  Amount Remaining:  To Fund Balance

As illustrated above, controlling for non-cash revenue and non-cash grants presents an alternative view of how revenue and expenses are allocated. By excluding non-cash revenue and non-cash expenses, actual expenses that eat up revenue become a bigger piece of the pie. Basically, the exclusion of non-cash revenue and non-cash expenses shows that cash revenue is primarily covering the expenses of the organization (which can be more clearly seen when looking at specific line item expenses…see below).

Expenses by Specific Line Item Category

Samaritan’s Purse reported $672 million (96% of revenue) in program expenses, allocated as follows:

  • $293 million (42% of revenue):  Grants (of which $229 were non-cash, primarily shoe boxes)
  • $144 million (21% of revenue):  Compensation
  • $ 94 million (13% of revenue):  Program Materials/Supplies
  • $ 46 million (7% of revenue):  Travel and Conferences
  • $ 36 million (5% of revenue):  Office-related Expenses
  • $ 28 million (4% of revenue):  Other Expenses (primarily depreciation, and other expenses with no further detail)
  • $ 16 million (2% of revenue):  Fees for Services (primarily other with no further detail)
  • $ 15 million (2% of revenue):  Advertising and Promotion

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

$100:  Cash Contribution

-$ 21:  Compensation

-$ 13:  Program Materials/Supplies

-$  7:  Travel and Conferences

-$  5:  Office-related Expenses

-$  4:  Other Epensese

-$  2:  Fees for Services

-$  2:  Advertising and Promotion

-$ 54:  Subtotal

 $ 46:  Amount Remaining

$ 42:  Grants and Assistance

$  04:  Amount Remaining:  To Fund Balance

Again, if only cash contributions ($453 million) and cash expenses ($443 million) are considered, then we see expenses as follows:

  • $ 64 million  (14% of revenue):  Grants
  • $144 million (32% of revenue):  Compensation
  • $ 94 million (21% of revenue):  Program Materials/Supplies
  • $ 46 million (10% of revenue):  Travel and Conferences
  • $ 36 million (8% of revenue):  Office-Related Expenses
  • $ 28 million (6% of revenue):  Other Expenses (primarily depreciation, and other expenses with no further detail)
  • $ 16 million (4% of revenue):  Fees for Services (primarily other with no further detail)
  • $ 15 million (3% of revenue):  Advertising and Promotion

$100: Cash Contribution

-$ 32:  Compensation

-$ 21:  Program Materials/Supplies

-$ 10:  Travel and Conferences

-$  8:  Office-Related Expenses

-$  6:  Other Expenses

-$  4:  Fees for Services

-$  3:  Advertising and Promotion

-$ 84: Subtotal Organisation Expenses

$  16:  Revenue Remaining

-$ 14:  Grants

$  2:  Revenue Remaining:  To Fund Balance

As illustrated above, the clarity of where cash is spent emerges when non-cash contributions and non-cash grants are eliminated).  Very little cash (relative to total grants) is given in the form of grants and assistance to foreign and domestic organizations. Instead, cash is primarily used to support salaries, benefits, office and overhead, travel, conferences, material and supplies, advertising, and promotion of the organization. In other words, cash is primarily used to run the machine – the 2,965 staff who administer the programs, manage and raise funds for the organization.

Noteworthy information revealed on the tax return also include the following:

Grants totaled $293 million, of which $37 million (13%) were domestic and $256 million (87%) foreign. Of the $256 million in grants to entities outside of the US, approximately $225 million (88%) were shoebox gifts, $4 million were cash grants (2%), and $27 million (10%) were in materials and supplies.

Of the $37 million in grants to organizations and individuals in the United States, 326 non-profit organizations received grants greater than $5,000 with the 20 largest cash grants made to:

  • $3,000,000:  La Grange Area Disaster Recover of La Grange, Texas for community development
  • $1,000,000:  4B Disaster Response Network of League City, Texas for community development
  • $  585,000:  Coastal Bend Disaster Recover of Sinton, Texas for community development
  • $  419,372:  Evangelical Free Church of America of Minneapolis, Minnesota for community development
  • $  350,000:  Sonrise Community Church of Houston, Texas for community development
  • $  345,970:  Golden Crescent Habitat of Victoria, Texas for community development
  • $  300,000:  First Assembly of God of Rockport, Texas for community development
  • $  300,000:  Lily of the Valley Church of God of Anahuac, Texas for community development
  • $  300,000:  Pine Forest Baptist Church of Vidor, Texas for community development
  • $  300,000:  First Baptist Church of Loeb of Lumberton, Texas for community development
  • $  300,000:  New Beginnings Assembly of God of Port Lavaca, Texas for community development
  • $  300,000:  Pleasant Grove Missionary Baptist of Houston, Texas for community development
  • $  300,000:  Harvest Family Church of Cypress, Texas for community development
  • $  300,000:  Family Worship Center of Victoria, Texas for community development
  • $  300,000:  Christian Temple Assembly of God of Houston, Texas for community development
  • $  300,000:  First Baptist Church of Mauriceville, Texas for community development
  • $  300,000:  Ridgewood Baptist Church of Port Arthur, Texas for community development
  • $  299,999:  First Baptist Church Fannett of Beaumont, Texas for community development
  • $  285,801:  Primera Asamblea de Dios of Corpus Christi, Texas for community development
  • $  266,230:  Memorial Baptist Church of Port Arthur, Texas for community development

Summary

Samaritan’s Purse is a Christian organization managed by an 18-member board (16 men and 2 women) that has 2,965 employees engaged in administering programs, managing the organization and fundraising. Most grants given are in the form of non-cash (primarily shoe boxes) leaving cash revenue to pay for costs (i.e. compensation, office-related, travel, advertising, etc) of running the organization.

To read the IRS Form 990 (2018), click here.

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