Where Does $100 to Feed the Children Go (2022)?

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 11 independent voting members (directors) of the governing body (Board of Directors) (although the Form 990 lists 12 directors, 9 (75%) of whom are male and 3 (25%) 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 2022, FTC reported total revenue of $388 million (compared to $599 in 2021 and $467 million in 2020).  Most revenue (87%)  – $337 million – were non-cash contributions.  The $51 million in cash revenue came from contributions ($50 million) and investment/other income ($1 million).

Expenses totaled $401 million (not including $2 million in depreciation) in 2022:  $13 million more than the organization collected.  Expenses can be categorized as follows:

• $360 million (92% of revenue):  Grants
• $ 17 million (4% of revenue):  Compensation
• $ 11 million (3% of revenue):  Direct Mail, Digital Fundraising, Shipping and Handling
• $  6 million (2% of revenue):  Fees for Services/Contracted Services
• $  4 million (1% of revenue):  Office-Related Expenses
• $  3 million (1% of revenue):  Other Expenses (detail not provided)

As illustrated above, FTC spent $103 for every $100 in revenue with the largest expense reported to be grants (non-cash).  FTC awarded $360 million in grants (almost all of which – $353 million – were non-cash grants) in 2022 which means the organization granted $16 million more in non-cash grants than they received in non-cash contributions.

In 2022, FTC collected $51 million in cash contributions and investment income, and spent $41 million or organization expenses (compensation, fundraising, fees, office, and other expenses) and $7 million on cash grants.

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

In 2022, FTC reported total revenue of $388 million, of which $51 million were cash contributions and investment income, and $337 million were non-cash contributions (primarily food, personal care and hygiene products, and office supplies).

Expenses totaled $401 million and can be categorized as follows:

• $353 million (90% of revenue):  Non-Cash Grants
• $    7 million (2% of revenue):  Cash Grants
• $ 17 million (4% of revenue):  Compensation
• $ 11 million (3% of revenue):  Direct Mail, Digital Fundraising, Shipping and Handling
• $  6 million (2% of revenue):  Fees for Services/Contracted Services
• $  4 million (1% of revenue):  Office-Related Expenses
• $  3 million (1% of revenue):  Other Expenses (detail not provided)

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

$100:  Revenue

-$ 92:  Grants

 $  8:  Revenue Remaining

-$  4: Compensation

-$  3:  Direct Mail, Digital Fundraising, Shipping and Handling

-$  2:  Fees for Services/Contracted Services

-$  1:  Office-Related Expenses

-$  1:  Other Expenses

-$ 11:  Subtotal:  Compensation, Office, Mail, Other, SH, and Fees

– $  3:  Overspent

As illustrated above, $92 of every $100 in non-cash and cash contributions were distributed in grants. $11 out of every $100 was used for organization expenses, all of which means FTC spent $103 for every $100 in revenue received.

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

$51 million in cash revenue (contributions/investment income)  were reported in 2022.

$48 million in expenses were reported in 2022:

• $    7 million (14% of cash revenue):  Cash Grants
• $ 17 million (33% of cash revenue):  Compensation
• $ 11 million (22% of cash revenue):  Direct Mail, Digital Fundraising, Shipping and Handling
• $  6 million (12% of cash revenue):  Fees for Services/Contracted Services
• $  4 million (8% of cash revenue):  Office-Related Expenses
• $  3 million (6% of cash revenue):  Other Expenses (detail not provided)

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

$100:  Cash Revenue

-$ 33:  Compensation

-$ 21: Direct Mail, Digital Fundraising, Shipping and Handling

-$ 14: Cash Grants

-$ 12: Fees for Services/Contracted Services

-$  8:  Office-Related Expenses

-$  6:  Other Expenses (detail not provided)

-$ 94:  Total Expenses

  $   6:  Excess Revenue

As illustrated above, $80 out of every $100 of cash revenue were spent on organization expenses while $14 out of every $100 was spent on cash grants.

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 distributed more non-cash contributions ($353 million) as they received ($337 million) and, therefore relied on previous contributions (in net assets).

To read the IRS Form 990 (2021 for the year ending June 30, 2022), click here.