How Revenue is Spent at Toys for Tots (2021)
Toys for Tots is one of the most well known organizations whose mission is to work with the US Marine Corp to collect new unwrapped toys and distribute those toys to economically disadvantaged children at Christmas time. A non-profit, tax-exempt 501 (c) 3, Toys for Tots is legally known as Marine Toys for Tots Foundation but nearly everyone refers to the organization as “Toys for Tots.”
There are 12 voting members of the governing party, 11 of whom are independent. 9 of the 12 (75%) directors are male while 3 (25%) are female.
So, if you made a donation in 2021, where did it go? It depends. If you donated a toy, then more than likely, a child received that toy. If you made a cash donation, then the funds were probably used to pay for organization expenses (i.e. compensation, office-related expenses, fees for services, etc), purchase toys, or put into the general fund (savings). How do I know this? Because the Form 990 that Toys for Tots submitted to the IRS (2021) reports the following information:
In 2021, Toys for Tots reported total revenue of $357 million (compared to $298 million in 2020 and $263 million in 2019), of which $261 million were non-cash donations (i.e. toys) while $87 million were cash donations. The other $9 million came from investment income (note: the organization had $246 million in net assets by year-end which means they spent less than they raised over the years and also benefited from gains from investments of these funds.
Expenses totaled $339 million and can be categorized as follows:
- $316 million (89% of revenue): Toys
- $ 13 million (3% of revenue): Office-Related Expenses
- $ 4 million (1% of revenue): Fees for Services (i.e. fundraising, investment management, etc)
- $ 3 million (1% of revenue): Compensation
- $ 2 million (1% of revenue): Travel and Conferences
- $ 1 million (<1% of revenue): Public Relations
Let’s look at cash versus non-cash expenses for a moment. We know the following:
- In 2021, Toys for Tots received $261 million in non-cash donations (i.e. toys) and $96 million in cash revenue from donations and investments;
- In 2021, Toys for Tots distributed $316 million in toys (about $55 million more than they collected); and
- In 2021, Toys for Tots spent $23 million on organization expenses (listed above)
So, the question becomes: How did Toys for Tots spend the $96 million in cash donations and investment income? The answer is they spent $55 million on toys, $23 million on organization expenses (i.e. office, fees, compensation, travel, and PR), and put the remainder – $18 million – in the general fund (savings). In other words, roughly 23% of cash revenue was used for organization expenses, 55% on toys, and 22% was put into savings, which means a cash donation in 2020 went towards organization costs, toys, or was put into savings.
It’s accurate to say that Toys for Tots used $23 million for organization expenses, with office-related expenses, fees for services, and compensation the largest expenses. 23 employees received $2.5 million (rounded above) in compensation which equates to an average compensation of $109,000 (note: Toys for Tots relies heavily on volunteers). However, only 5 employees received more than $100,000 in compensation:
- $317,444: James P Laster, President and CEO
- $215,985: Theodore Silvester, VP, M&D
- $215,985: Matthew D Cooper, Secretary, VP Operations
- $141,839: Matthew D McDonald, IT Specialist
- $138,371: Kelley Hardison, Deputy, VP, M&D
4 of the 5 most highly compensated employees are male while 1 is a female (Note: The Form 990 does not report gender. Determinations were made based on name and google searches).
Toys for Tots did NOT spend revenue on first class or charter travel, companion travel, health or social club dues or initiation fees, discretionary spending accounts, personal staff, gross up payments (or tax indemnification) or for housing.
Bottom Line: If you want to make a donation and be sure that a child is directly benefiting from that donation, donate a new, unwrapped toy to Toys for Tots. If you donate cash, the funds may be used to support the organization (which is not a bad thing), pay for toys, or put into savings (they already have more than $246 million).
To read the IRS Form 990 (2021), click here.