Kars4Kids and Oorah

Kars4Kids, Inc (Kars4Kids) is a tax-exempt, non profit 501 (c) 3 that advertises heavily for people to contribute a vehicle, boat, and real estate, which the organization sells via a third-party user so they can “together with our sister charity, Oorah, help thousands of children.”

Oorah, Inc. (Oorah) is a tax-exempt, non-profit 501 (c) 3 whose mission is “to develop children and families by giving them opportunities to connect with their rich Jewish heritage and traditions.” They do this primarily through a Jewish congregation. in Staten Island, NY.

So, how are these two charitable organizations connected and why have many people heard of Kars4Kids but not heard of Oorah?

Kars4Kids and Oorah operate out of the same office in Lakewood, New Jersey.  In short, Kars4Kids appears to be the non-profit that raises revenue to support Oorah (whose primary goal appears to be saving funds).

Kars4Kids is a fundraising organization that raises about $100 million annually:  spending about $26 million on advertising, $8 million on compensation for the 100 employees and administrative expenses, and about $44 million on a grant to Oorah.  Remaining funds ($17 million in 2020) are added to the general fund.  Kars4Kids had $24 million in net assets at year-end 2020.

Oorah’s primary source of revenue is the grant from Kars4Kids – about $44 million annually but Oorah has historically not spent this grant money in its entirety (although the Form 990, Schedule I, Part IV states “Kars4Kids monitors and reviews Oorah’s internal controls to ensure that they operate and distribute funds in accordance with the organization’s objectives”).

The key here is the “organizations objectives” and whether one of those objectives is to grow the general fund and if grant money should be used to grow net assets, which totaled $129 million at year-end 2020.

In 2020, Oorah only used $26 million of the $44 million grant to to pay staff ($8 million for 313 staff or an average of $26,000), make other grants ($9 million, of which $5 million went to Congregation Oorah in Staten Island, NY and $3 million to 716 individuals for scholarships – an average of $4,200 each), pay office-related expenses ($5 million) and save funds (allocated to the general fund) in the amount of $22 million.

So, if we consider Kars4Kids and Oorah “one” organization since Oorah relies on Kars4Kids for revenue then the following information needs to be considered:

• About $26 million is spent on advertising
• About $14 million is spent on compensation for the approximate 400 employees of both organizations
• About $7 million on fees for services, office expenses, and repairs of both organizations
• About $10 million in grants (including $5 million to the Congregation Oorah and $3 million in scholarships)

In total, the two organizations spend about $57 million of the $100 million, adding the unused revenue to the general fund, allowing the two organizations to have more than $150 million in net assets by year-end 2020.

What Kars4Kids should be telling potential donors is this:  We sell your donated car and use about 50% to pay for advertising, staff, and other costs, and give about 10% in grants, whose largest recipient is a congregation on Staten Island, NY.  The rest is put into savings.

To read the IRS Form 990 (2020) for Kars4Kids, click here.

To read the IRS Form 990 (2020) for Oorah, click here.