OneFamily Fund

Mission:
The OneFamily Fund (OFF), www.onefamilyfund.org, provides much-needed assistance to thousands of terror victims throughout Israel on a daily basis. We collect not only money, but all human resources - bringing together people who have suffered through terror attacks, along with caring people who thankfully haven't. We connect people in Israel with people in almost every country around the world. OneFamily provides direct financial, legal, and emotional assistance to victims of terrorism in Israel. In addition, OneFamily provides the family network for world Jewry to express and actuate their natural sense of brotherhood by facilitating direct contact, relationships, and interaction between survivors and world Jewry as individuals, communities, and organizations.

Financial Efficiency Evaluation:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, OFF has an overall
rating of one star (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of OFF based on 990 tax returns through
2006:
Overall Rating: One Star *

Organizational Efficiency:
Efficiency Rating: 1 Star *
Program Expenses: 63.3%
Administrative Expenses: 21.6%
Fundraising Expenses: 15.0%
Fundraising Efficiency: $0.16
(OFF spends $0.16 to raise $1)

Organizational Capacity:
Capacity Rating: One Star *
Primary Revenue Growth: -13.3%
Program Expenses Growth: -17.6%
Working Capital Ratio: 0.01
(OFF can sustain itself for 0.01 years
without generating new revenue.)
Organizational capacity refers to an organization’s
ability to sustain itself over time. Charities that exhibit
consistent revenue and expenses growth are more
likely to sustain their programs and services over the
long haul.

Compensation for its Chief Executive Officer, Gary Kenzer, was $40,000 which represents 1.28% of expenses. For comparison purposes, compensation for the President of the American Jewish World Service, Ruth Messinger, was $191,000 which represents 0.79% of expenses.

As of 2006, OFF had net assets of $259,677. Of this figure,
OFF had investments of publicly traded securities of $0 and cash non-interest bearing investments of $$37,091 and savings and temporary cash investments of $71,818. OFF had fixed assets of land, buildings and equipment less accumulated depreciation of $205,970. It operated at a deficit of $250,489.

Discussion:
OFF is a financially inefficient non-profit institution. This conclusion is based on the following facts:

1) Charity Navigator has given OFF an overall rating of one star
including an efficiency rating of one star. Too much of its revenue
is spent on administrative and fundraising expenses; and too little
of its revenue is spent on its target – families victimized by terror.
2) OFF has a working capital ratio of 0.01 years. It has no margin
safety against future financial uncertainty as exists right now. OFF
has a limited ability to withstand the present economic downturn.
3) OFF had no exposure to Madoff investments.

Recommendations: The recent financial turmoil, caused by the Wall Street and Madoff scandals, has also affected the relationship between donor and non-profit. The turmoil has caused donors to become uncertain and more selective in giving to non-profits. Non-profits that are transparent about their finances will regain the lost trust of its donors sooner than those non-profits that are not transparent about their finances. In order to reach out to more selective donors, OFF should be more transparent about its finances.
OFF should provide the following information on its web site:
1) It should provide its three most recently filed tax returns.
2) It should provide its investment philosophy and a breakdown of its investments on a semi-annual basis.
3) It should provide information about its exposure to Madoff investments on the homepage of website, especially since it had NO exposure to Madoff.

Next Week’s Blog: Obama’s Plan to Reduce the Charitable Deduction