How Donations are Used at Toys For Tots (2022)

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 2022, 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) or to purchase toys. How do I know this? Because the Form 990 that Toys for Tots submitted to the IRS (2022) reports the following information:

In 2022, Toys for Tots reported total revenue of $380 million (compared to $357 million in 2021, $298 million in 2020 and $263 million in 2019), of which $298 million were non-cash donations (i.e. toys) while $77 million were cash donations.  The other $5 million came from investment income (note:  the organization had $218 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, although net assets are down about $30 million from 2021 because of net unrealizable losses from investments and because the organization spent about $8 million more than they raised in 2022.

Expenses totaled $388 million and can be categorized as follows:

• $360 million (95% of revenue):  Toys
• $ 16 million (4% of revenue):  Office-Related Expenses
• $  5 million (1% of revenue):  Fees for Services (i.e. fundraising, investment management, etc)
• $  3 million (1% of revenue):  Compensation
• $  2 million (less than 1% of revenue):  Travel and Conferences
• $  2 million (less than 1% of revenue):  Public Relations

Let’s look at cash versus non-cash expenses for a moment.  We know the following:

• In 2022, Toys for Tots received $298 million in non-cash donations (i.e. toys) and $82 million in cash revenue from donations and investments;
• In 2022, Toys for Tots distributed $360 million in toys (about $62 million more in toys than they collected); and
• In 2022, Toys for Tots spent $28 million on organization expenses (listed above)

So, the question becomes:  How did Toys for Tots spend the $82 million in cash donations and investment income? The answer is they spent $62 million on toys and $28 million on organization expenses (i.e. office, fees, compensation, travel, and PR), which is $8 million more than they raised (but they had the reserves to do this).  In other words, roughly 34% of cash revenue was used for organization expenses while the remainder (and more) was spent on toys.

It’s accurate to say that Toys for Tots used $28 million for organization expenses, with office-related expenses, fees for services,  and compensation the largest expenses. 26 employees received $3 million in compensation which equates to an average compensation of $115,000 (note:  Toys for Tots relies heavily on volunteers). However, only 7 employees received more than $100,000 in compensation with the 5 most highly compensated reported to be:

• $416,546:  James P Laster, President and CEO
• $201,194:  Kelley Hardison, Deputy, VP, M&D
• $197,344:  Theodore Silvester, VP, M&D
• $197,344:  Matthew D Cooper, Secretary, VP Operations
• $152,949:  Matthew D McDonald, IT Specialist

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). The 5 most highly compensated employees received nearly $1.2 million in compensation.

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) or pay for toys.

To read the IRS Form 990 (2022), click here.