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January 26, 2020

Where does $100 to the Make-A-Wish Foundation Go?

by Anne Paddock

The Make-A-Wish Foundation of America (MAW) was established as a non-profit tax-exempt 501 (c) (3) in 1980 in Phoenix, Arizona to grant the wishes of children diagnosed with critical illnesses. Today, the national headquarters and founding chapter is still in Phoenix but the organization has about 62 chapters throughout the United States and 39 affiliates in nearly 50 countries worldwide. This post addresses the national headquarters whose focus is on fundraising, managing the assets of the organization, and making grants to the Make-A-Wish affiliates.

In a nutshell, MAW raises about $100 million annually, spends about $100 million annually (about half of which is used for grants to affiliate chapters), and has $43 million in fund balances (which is often referred to as the endowment).

The Form 990 (2017 for the year ending August 31, 2018) reports MAW raised $97 million in revenue (compared to $99 million the prior year), which came from four sources:

  • $83 million:  Contributions, Gifts, and Grants
  • $ 9 million:  Chapter Assessments, Conferences, and Training Revenue
  • $ 4 million:  Centralized Services, Rebates, Royalties, and List Rental Income
  • $ 1 million:  Investment Income, Gains on the Sale of Assets

Expenses were $102 million, about $5 million more than was raised.  Expenses 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, the latter of which provides more detail on how revenue was spent.

Expenses by Broad General Category

The $102 million in expenses were categorized as follows:

  • $ 55 million (57% of revenue):  Grants
  • $ 21 million (22% of revenue):  Program Services
  • $ 13 million (13% of revenue:  Management and General Expenses
  • $ 13 million (13% of revenue):  Fundraising

As illustrated above, the largest expense for MAW was grants. $55 million in grants were awarded. 63 of the grants were greater than $5,000; 62 were to affiliate 501 (c) (3) chapters of MAW and 1 was to the MAW affiliate in Guam, which is not a 501 (c) (3). The largest 21 grants totaling $34.2 million (62% of grants) were made to:

  • $3.3 million:  MAW Greater Los Angeles
  • $2.7 million:  MAW Ohio, Kentucky, and Indiana
  • $2.5 million:  MAW Illinois
  • $2.2 million:  MAW Georgia
  • $2.2 million:  MAW New York Metro and Western NY
  • $2.1 million:  MAW New Jersey
  • $1.8 million:  MAW North Texas
  • $1.7 million:  MAW Mid Atlantic
  • $1.6 million:  MAW South Florida
  • $1.4 million:  MAW Greater Bay Area
  • $1.4 million:  MAW Michigan
  • $1.3 million:  MAW Arizona
  • $1.3 million:  MAW Massachusetts and Rhode Island
  • $1.3 million:  MAW Orange County and Inland Empire
  • $1.2 million:  MAW Alaska and Washington
  • $1.1 million:  MAW Philadelphia and Susquehanna
  • $1.1 million:  MAW Texas Gulfcoast and Louisiana
  • $1.0 million:  MAW Central and Northern Florida
  • $1.0 million:  MAW Colorado
  • $1.0 million:  MAW Connecticut
  • $1.0 million:  MAW Minnesota

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

$100:  Revenue

-$ 57:  Grants

-$ 22:  Program Services

$ 79:  Subtotal Grants and Program Services

 $ 21:  Revenue Remaining

-$ 13:  Management and General Expenses

-$ 13: Fundraising

-$ 26: Subtotal Management and General Expenses and Fundraising

-$105: Total Expenses

-$  5:  Amount of Expenses over Revenue Spent

As illustrated above, UAW spent $105 for every $100 in revenue received. Grants and Program Services accounted for $79 out of every $100 while Management and General Expenses and Fundraising accounted for $26 out of every $100 in revenue.

Expenses by Specific Line Item Category

The $102 million in expenses was categorized as follows:

  • $ 21 million (22% of revenue):  Compensation
  • $ 12 million (12% of revenue):  Fees for Services (primarily other fees of $7 million and fundraising of $3 million)
  • $ 10 million (10% of revenue):  Office-related Expenses
  • $  2 million (2% of revenue):  Travel and Conferences
  • $  1 million (1% of revenue):  Advertising and Promotion
  • $  1 million (1% of revenue):  Other Expenses
  • $ 55 million (57% of revenue):  Grants

As illustrated above, the largest expense was grants ($55 million) followed by compensation of $21 million for the 271 employees at the national headquarters, which equates to an average compensation of about $75,000.  Fees for Services is the third largest expense at $12 million. $7 million are described as other fees with no detail provided. $3 million were fundraising fees and about $1.5 million were accounting fees.

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

$100:  Revenue

-$ 22: Compensation

-$ 12:  Fees for Services

-$ 10:  Office-related Expenses

-$  2:  Travel and Conferences

-$  1:  Advertising and Promotion

-$  1:  Other Expenses

-$ 48:  Subtotal:  Compensation, Office, Travel and Conferences, Advertising, Promotion, and other Expenses

$ 52:  Revenue Remaining

-$ 57:  Grants

-$  5:  Amount Spent in Excess of Revenue

As illustrated above, $48 out of every $100 was spent on compensation, fees for services, office-related expenses, travel and conferences, advertising/promotion, and other expenses while $57 out of every $100 was spent on grants to the affiliate chapters of MAW.

In conclusion, the national headquarters of MAW awarded grants to national affiliates in the 2017-2018 fiscal year. Of the $97 million collected, $55 million was awarded in grants. The remaining was spent on staff compensation, office-related expenses, fees for services, travel and conferences, advertising and promotion, and other expenses.

It is important to note that each of the 62 affiliate chapters of MAW raises their own funds in addition to receiving a grant from the national headquarters in Phoenix.  If you want your donation dollars to go as far as possible to making kids wishes, then give to your local affiliate chapter because donations to the national headquarters spent $48 out of every $100 on expenses at headquarters. Once a grant is made to an affiliate, the affiliate also has to deduct affiliate expenses so if you bypass the national headquarters, only the affiliate expenses are deducted from your donation.

To read the IRS Form 990 (2017) for the year ending August 31, 2018, click here.

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