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October 26, 2022

Where Does $100 to Feed the Children Go (2021)?

by Anne Paddock

Feed the Children (FTC) is a tax-exempt non-profit 501 (c) (3) based in Oklahoma City, OK.  Established in 1979, FTC is primarily engaged in obtaining and distributing food, medicine, and clothing to those in need through grants, primarily to non-profits in the USA.

FTC is governed by 12 independent voting members (directors) of the governing body (Board of Directors) (although the Form 990 lists 13 directors, 10 (77%) of whom are male and 3 (23%) whom are female.

In trying to understand how $100 is spent at FTC, it is important to consider what the organization primarily does:  they collect non-cash contributions and distribute these items.  So, if the $100 donation is a non-cash item, then the contribution is distributed to another organization (another non-profit that is probably in the USA). But, if the donation is cash, then the $100 is used to pay for the organization costs of FTC. So, there are two ways to look at how $100 is spent, both of which will be presented in the following paragraphs.

In 2021, FTC reported total revenue of $599 million (compared to $467 million in 2020).  Most revenue (90%)  – $530 million – were non-cash contributions.  The $69 million in cash revenue came from contributions ($52 million), gains on the sale of assets ($16 million), and investment/other income ($1 million),

FTC awarded $499 million in grants (almost all of which – $492 million – were non-cash grants) in 2021 which means the organization retained about $38 million in non-cash contributions presumably to be distributed in the future. The $38 million in non-distributed non-cash contributions in 2021 resulted in an increase in net assets (since technically, the FTC did not spend as much as they collected).

In 2021, FTC collected $69 million in cash contributions, gifts, and grants and gains/investment income and spent $40 million or organization expenses and $7 million on cash grants,  leaving $22 million in cash revenue added to the general fund along with the $38 million of non-cash contributions.

How $100 Was Spent if Non-Cash Contributions Are Considered

In 2021, FTC reported total revenue of $599 million, of which $69 million were contributions, gifts, and grants and gains, and $530 million were non-cash contributions:

  • $201 million:  Food
  • $ 77 million:  School Supplies
  • $111 million:  Hygiene Products
  • $ 38 millon:  Books and Publications
  • $ 14 million:  Clothing and Household Goods
  • $ 80 million:  Eye Glasses
  • $  1 million:  Toys
  • $  8 million: Drugs and Medical Supplies

Expenses totaled $539 million and can be categorized as follows:

  • $492 million (82% of revenue):  Non-Cash Grants
  • $   7 million (1% of revenue  ):  Cash Grants
  • $ 17 million (3% of revenue):  Compensation
  • $  8 million (1% of revenue):  Direct Mail and Digital Fundraising
  • $  5 million (1% of revenue):  Office-Related Expenses
  • $  4 million (1% of revenue):  Other Expenses (primarily with no detail provided)
  • $  3 million (less than 1% of revenue):  Shipping and Handling
  • $  3 million (less than 1% of revenue):  Fees for Services (primarily fundraising)

Using the above information every $100 in revenue (both cash and non-cash) was spent as follows:

$100:  Revenue

-$ 83:  Grants

 $ 17:  Revenue Remaining

-$  3: Compensation

-$  1:  Office-Related Expenses

-$  1:  Direct Mail

-$  1:  Other Expenses

-$  1:  Shipping and Handling and Fees for Services

-$  7:  Subtotal:  Compensation, Office, Mail, Other, SH, and Fees

  $ 10:  Remains Revenue:  To General Fund

As illustrated above, $83 of every $100 in non-cash and cash contributions were distributed in grants. $7 out of every $100 was used for organization expenses.

In order to see how cash contributions were used, we need to just look at cash revenue and cash expenses:

How $100 was Spent if Non-Cash Contributions and Non-Cash Grants Are Not Considered

$69 million in cash contributions/gains were reported in 2021.  $47 million in expenses were reported:

  • $17 million (25% of revenue):  Compensation
  • $ 8 million (12% of revenue):  Direct Mail and Digital Fundraising
  • $ 7 million (10% of revenue):  Cash Grants
  • $ 5 million (7% of revenue):  Office-Related Expenses
  • $ 4 million (6% of revenue):  Other Expenses
  • $ 3 million (4% of revenue):  Shipping and Handling
  • $ 3 million (4% of revenue):  Fees for Services (primarily fundraising)

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

$100:  Cash Revenue

-$ 25:  Compensation

-$ 12:  Direct Mail and Digital Fundraising

-$ 10: Cash Grants

-$  7: Office-Related Expenses

-$  6:  Other Expenses

-$  4:  Shipping and Handling

-$  4:  Fees for Services (primarily fundraising)

-$ 68:  Total Expenses

 $  32:  Excess Revenue:  To General Fund

As illustrated above, $58 out of every $100 of cash revenue were spent on organization expenses and $10 out of every $100 was spent on cash grants.  $32 out of every $100 was not spent and added to the general fund.

In summary, FTC is primarily engaged in collecting and distributing non-cash contributions (in the form of grants to other non-profits primarily in the USA) but they rely on cash contributions to pay the expenses of running the organization.  FTC did not distribute as many non-cash contributions as they received; nor did they spend as much cash revenue was they received. As a result, FTC increased their net assets from $144 million at the beginning of the year to $207 million at year-end.

To read the IRS Form 990 (2020 for the year ending June 30, 2021), click here.

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