By Haddon Libby
Excluding tax-exempt organizations like the NFL and Credit Unions, over 5% of all economic activity in the United States ($1.65 trillion) is transacted through nonprofits. Nearly 10% of all wages and salaries in the United States come from nonprofit organizations. Surprisingly, only 21% of nonprofit revenues come from contributions, gifts and government grants with most of the rest coming from program services – much of which is paid for by the government.
For the last reported year of 2012, $316 billion was donated to nonprofits with individuals representing $229 billion, foundations $51 billion, bequests from wills of $24 billion and corporation donations of $12 billion.
According to the National Center for Charitable Statistics, there are 1.5 million tax-exempt organizations in the United States. Of this universe, 1 million are public charities with the rest a mix of private foundations, chambers of commerce, fraternal orders and civic groups.
Charity Navigator tracks results for nonprofits that receive the majority of their funding from individuals and foundations. In general, Charity Navigator does not track universities and hospitals or those relying on governmental support.
Of this smaller list of charities, Lutheran Services of America had the greatest revenues last year at $20.98 billion, more than 3 times the revenues of second place YMCA of the USA at $6.61 billion in revenues. Goodwill Industries was third at $5.18 billion followed by Catholic Charities USA at $4.33 billion, the Salvation Army at $4.32 billon, United Way at $4.27 billion, Mayo Clinic at $3.90 billion and Red Cross at $3.50 billion.
Based on asset size, the largest nonprofit in the United States was the Red Cross $3.35 billion. Feeding America was second at $1.89 billion, the Smithsonian third at $1.15 billion and City of Hope fourth at $1.08 billion.
The highest rated charity by Charity Navigator was the Midwest Food Bank with four stars and a 99.95 rating on their 100 point scale. This charity feeds over 555,000 on a monthly basis in the United States and East Africa.
When it comes to fundraising, Faith’s Hope Foundation in Fullerton, California was the least efficient spending 94 cents of every $1 raised on fundraising. Stated differently, only 6 cents of every $1 raised went toward their mission of helping financially challenged people in need of medical services. Of their $3.5 million budget, approximately $150,000 went toward their stated purpose.
The highest paid CEO of a lowly rated nonprofit was Ann Machin Oliva for the Overlook Foundation (NJ) at $608,454. This nonprofit raises funds to provide equipment and healthcare programs to Overlook Hospital and received zero stars from Charity Navigator.
According to Charity Navigator’s 2014 Compensation Report, the average pay for nonprofit CEOs with revenues under $3.5 million was $97,158, between $3.5 and $13.5 million was $148,659 and $256,143 for nonprofits larger than $13.5 million.
Locally, the highest rated charity with four stars and a 94.3 rating was the Desert AIDS Project. With $21.5 million in revenues and $12.3 million in assets, 7% was spent on fundraising. CEO pay totaled $244,114 for the last reporting period.
The Coachella Valley Rescue Mission (CVRM), a local homeless shelter also had a top rating with four stars. CVRM spent 10% of their $5.2 million budget on fundraising with their CEO earning less than $100,000.
The McCallum Theatre had three stars spending 7% of their $12.4 million budget on fundraising with their CEO earning $328,714 for the last year reported.
Guide Dogs of the Desert also received three stars and paid 7% of their $2 million in revenues on fundraising. Their highest paid employee earned $130,640.
The Living Desert with two stars spent 34% of their $9.4 million in revenues on fundraising activities with their CEO earning slightly more than $100,000.
The Palm Springs Art Museum received two stars and spent 12% of their $9.9 million in revenues on fundraising. CEO pay at $305,241 represented 3.1% of expenses.
HaddonHaddon Libby is Managing Partner of Winslow Drake, an Investment Advisory firm and co-founder of ShareKitchen. He can be reached at hlibby@winslowdrake.com.
