Where Does $100 to Save the Children Go (2022)

The Save the Children Fund is one of the most recognizable charitable organizations in the world. Established more than a hundred years ago in 1919, the organization is legally known as Save the Children Federation, Inc. in the United States, but is often simply referred to as “Save the Children.”

On the Save the Children website (www.savethechildren.org), the organization reports that “86% of all expenditures went straight to our mission” with the key word being “expenditures.”  Expenses are normally analyzed as a percentage of revenue, not as a percentage of total expenditures because both parts of the equation – revenue and expenses – are important to understand how an organization is operating. Without revenue, it doesn’t matter how much of an organization’s expenditures were spent in a single category.  Both sides of the equation have to be considered. In addition, the word “mission” must be carefully considered.

Most people want to know how their charitable contribution (which is revenue) is spent. In order to know this, an analysis has to include the revenue collected and the revenue spent.  And, finally it is important to point out that Save the Children has accumulated $336 million by 2022 (compared to $361 million in 2021 and $324 million in 2020) in net assets, which was done by saving revenue, not spending it.  Between 2019-2021 Save the Children added more than $140 million to the general fund. Writing that the allocation of revenue to the general fund goes straight to their mission is a bit of a stretch.

Of prime importance is understanding what an organization does. Save the Children in the US is one of 30 worldwide organizations that support Save the Children International, based in England, and are part of the Save the Children Alliance.

In the US, Save the Children’s largest expenditure is grants – $782 million (or 74% of revenue) in 2022, most of which ($671 million) were international grants to  recognized charitable organizations. So, it’s fair to say the US organization is primarily concerned with raising funds to award grants overseas.

The IRS Form 990 (2022) submitted by Save the Children to the IRS reports the following information:

Save the Children (STC) reported total revenue of $1.1 billion (compared to $909 million in 2021, $809 million in 2020 and $782 million in 2019).  Most revenue came from contributions, gifts, and grants with $480 million from the government and $571 million from others. However, $102 million of those contributions were non-cash contributions (primarily food).

Expenses totaled $1.1 billion (including $2 million in depreciation) – so they spent what they collected. The expenses can be categorized as follows:

• $782 million (74% of revenue):  Grants
• $135 million (13% of revenue):  Compensation
• $ 71 million (7% of revenue):  Fees for Services (primarily fundraising and other fees)
• $ 25 million (2% of revenue):  Office-Related Expenses
• $ 23 million (2% of revenue):  Advertising and Promotion
• $  8 million (less than 1% of revenue):  Program Supplies
• $  6 million (less than 1% of revenue):  Travel and Conferences
• $  5 million (less than 1% of revenue):  Membership Dues and Financial Fees
• $  4 million (less than 1% of revenue):  Other Expenses
• $  1 million (less than 1% of revenue):  Commodities and Freight/Supplies

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

$100:  Revenue

-$ 74 :  Grants

 $ 26:  Revenue Remaining

-$ 13 :  Compensation

-$  7:  Fees for Services

-$  2:  Office-Related Expenses

-$  2:  Advertising and Promotion

-$  2:  Supplies, Travel, Dues, Fees, Freight, and Other Expenses

-$ 26 :  Subtotal: Compensation, Fees, Office, Travel, Labor, Freight, and Advertising

 $   0:  Remaining Revenue

As illustrated above, the largest expense is grants with the majority awarded overseas in Sub Saharan Africa and Asia.

Compensation is the second largest expense. 1,280 employees received $135 million in compensation which equates to an average compensation of $105,000.  The Form 990 (2022) reports only 21 employees received more than $100,000 in compensation, which may be an error given that 335 employees received more than $100,000 in compensation in 2021.  The most highly compensated employee was Janti Soeripto, the President and CEO who received $618,629 in compensation in 2022.

$71 million was spent on fees for non-employees for services including $22 million for “management” with no further detail provided and $25 million for “other” services. $10 million was paid to fundraisers, which warrants a short discussion.

STC held 1 fundraising event that raised $316,000. After deducting $304,000 of contributions (an IRS requirement), the net proceeds were $12,000. STC spent $7,000 on rent/facility costs and other direct expenses, which means the organization reported a net income of $5,000 from the event.

In 2022, STC also used mail, internet, e-mail, phone, and in-person solicitations to raise funds. Of specific interest is the fundraisers – what they raised and how much they were compensated. The Form 990 (2022) reports the total amount spent on fundraising ($77 million) and the 10 most highly compensated fundraisers.

The 10 most highly compensated fundraisers raised $21 million and were compensated $10 million, netting STC $11 million, which basically means the hired fundraiser kept about 50% of the funds raised:

• RKD Group, of Richardson, TX raised $6.8 million and was compensated $600,000 resulting in $6.2 million for STC.
• Missionwired, of Washington, DC raised $5.3 million and was compensated $1.9 million resulting in $3.4 million for STC.
• MDS Communications Corp, of Mesa, AZ raised $2.4 million and was compensated $1.2 million, netting $1.2 million for STC.
• Thompson, Habib, and Denison, of Lincoln, MA raised $2.6 million and was compensated $300,000, netting $2.3 million for STC.
• KnewSales Group, of New York, NY raised $200,000 and was compensated $1.1 million, resulting in a net loss of $900,000.
• Amergent, of Peabody, MA raised $50,000 and was compensated $50,000.
• Grow Fundraising and Consulting  of Silver Spring, MD raised zero and was compensated $35,000.
• Infocision, of Akron, OH raised $1.8 million and was compensated $200,000 resulting in $1.4 million for STC.
• Dialogue Direct, Inc of New York, NY raised $1.1 million and was compensated $2.6 million resulting in a net loss of $1.5 million.
• New Canvassing Experience of Austin, TX raised $600,000 and was compensated $1.8 million resulting in a net loss of $1.2 million.

In summary, STC raises money worldwide to support their mission helping children. In the US, more than $1 billion is raised annually with most revenue awarded in overseas grants.  $74 out of every $100 was awarded in grants in 2022.  $26 out of every $100 covers the organization expenses which is consistent with past years.  10 fundraisers raised $21 million and were compensated $10 million (about 50%), which obviously leads to questions about the effectiveness of their efforts. And finally,  it is important to point out that net assets increased from $220 million at the beginning of 2019 to $266 million at year-end 2019 to $324 million at year-end 2020 to $361 million at year-end 2021. In 2022, net assets fell to $336 million primarily because of unrealized losses on investments.

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