Where Does $100 to the March of Dimes Go (2018)?

The March of Dimes continues to endure. For people following the March of Dimes, the past few years have been difficult on the organization.

Just 5 years ago the March of Dimes had $75 million in net fund assets and was raising close to $200 million annually, but they were spending more than they raised.  Over the next few years, revenue started to decline and the organization went into a negative net fund position because they were spending anywhere from $8-$27 million more than they raised annually, had to fund a pension/post retirement liability, and had losses on investments.

A new president was brought in in 2017 following the retirement of the longtime president but revenue continued to decline in 2017 (to $164 million from $169 million the year before) and more staff cuts were made (total staff of 1,284 were reported in 2017 compared to 1,513 in 2016), first class travel finally appeared to be eliminated (the IRS Form 990 in 2017 shows staff did not fly first class, as in previous years), and the organization cut expenses and did not spend more than they raised. The 1,284 staff were compensated $70 million which equates to an average compensation of $54,300 (compared to an average compensation of $58,200 for the 1,513 employees in 2016).  112 employees received more than $100,000 in compensation.

in 2018, staff cuts (about 250) continued  bringing total staff to 1,035 who were compensated $65 million, which equates to an average compensation of $62,800 (compared to an average compensation of $54,300 the prior year). So, the March of Dimes employed less people but compensated them more, on average, in 2018.  94 employees received more than $100,000 in compensation (compared to 112 employees the year before).

In 2018, revenue was $141 million (nearly all of which came from contributions, gifts, and grants), $23 million or 14% lower than in 2017.  Expenses totaled $133 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. compensation, travel and conferences, office-related expenses, grants, etc). Both are beneficial with the latter approach providing more detail.

Even though the March of Dimes spent $8 million less than they raised in 2018, the organization was not able to come out of a negative net asset position.  In fact, the net fund balance went from a -$11 million to a -$12 million because of $2 million in unrealized losses on investments, and $7 million in pension /post retirement costs. And, finally it is important to note the single largest liability ($62 million) is pension/retirement for employees, which is notable for a non-profit.

So, for every $100 in revenue the March of Dimes received, the organization spent it as follows:

Expenses by Broad General Category

The $133 million in expenses were categorized as follows:

• $88 million (62% of revenue):  Program Services
• $22 million (15% of revenue):  Fundraising
• $12 million (9% of revenue):  Grants
• $11 million (8% of revenue):  Management and General Expenses

Grants – primarily for research/education/community services has decreased dramatically over the past five years. In 2014, $30 million was awarded in grants. This figure fell to $29 million in 2015, $22 million in 2016, $21 million in 2017, and most recently to $12 million in 2018.

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

$100:  Revenue

-$ 62:  Program Services

-$  9:  Grants

-$ 71:  Subtotal:  Program Services and Grants

$  29:  Revenue Remaining

-$ 15:  Fundraising

–$  8:  Management and General Expenses

-$ 23: Subtotal Fundraising and Management and General Expenses

 $  6:  Revenue Remaining:  to Fund Balance

As illustrated above, $71 out of every $100 was spent on program services and grants while $23 out of every $100 was spent on fundraising and management and general expenses. $6 out of every $100 was not spent and placed in the general fund.

Expenses by Specific Line Item Category

The $133 million in expenses were categorized as follows:

• $65 million (46% of revenue):  Compensation
• $20 million (14% of revenue):  Fees for Services
• $20 million (14% of revenue):  Printing/Postage
• $ 8 million (6% of revenue):  Office-related Expenses
• $ 5 million (3% of revenue):  Travel and Conferences
• $ 3 million (2% of revenue):  Other Expenses (no detail provided)
• $12 million (9% of revenue):  Grants

As illustrated above, compensation is the largest expense for March of Dimes.  The second largest expense is fees for services which is not detailed on the Form 990, although this expense is more than 10% of total expenses.  The March of Dimes simply categories these fees as “program,” “management and general,” or “fundraising.”  73 independent contractors received more than $100,000 in compensation.  The five most highly compensated independent contractors were:

• $8,180,369:  PEP Direct of Wilton, New Hampshire for Mail House
• $3,057,415:  Purpose of NY, NY for video and photo consulting
• $2,063,650:  Blackbaud, Inc of Atlanta, Georgia for software hosting
• $1,330,635:  Blue State Digital Inc of Chicago, Illinois for email service consultant
• $1,219,033:  Direct Donor TV of Bowie, Maryland for development and air time

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

$100:  Revenue

-$ 46:  Compensation

-$ 14:  Fees for Services

-$ 14:  Printing/Postage

-$  6:  Office-related Expenses

-$  3:  Travel and Conferences

-$  2:  Other Expenses (no detail provided)

-$ 85: Subtotal Compensation, Fees, Printing/Postage, Office, and Travel and Conferences

 $ 15:  Revenue Remaining

-$  9:  Grants

$  6:  Revenue Remaining:  To Fund Balance

As illustrated above, the three largest expenses for March of Dimes were compensation, fees for services, and printing/postage. Collectively, $74 out of every $100 was spent on these expenses.

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

Click on “Where Does $100 to The March of Dimes Go (2019)?” for an update.