MISSION:“Since 1914, the American Jewish Joint Distribution Committee (JDC), www.jdc.org, has given global expression to the principle that all Jews are responsible for one another. Working today in over 70 countries, JDC acts on behalf of North America's Jewish communities and others to rescue Jews in danger, provide relief to those in distress, revitalize overseas Jewish communities, and help Israel overcome the social challenges of its most vulnerable citizens. JDC also provides non-sectarian emergency relief and long-term development assistance worldwide.” (Quote from Charity Navigator)
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org) America’s leading charity evaluator, JDC has an overall rating of four stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of JDC based on 990 tax returns through fiscal year 2007:
Overall Rating ****
Organizational Efficiency: Program Expenses 92.2%
Administrative Expenses 6.4%
Fundraising Expenses 1.2%
Fundraising Efficiency $0.01
(JDC spends $0.01 to raise $1.)
Efficiency Rating ****
Organizational Capacity:
Program Revenue Growth 7.1%
Program Expenses Growth 7.2%
Working Capital Ratio (years) 1.53
(JDC can sustain itself for 1.53 years
without generating new revenue.)
Capacity Rating ****
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 its programs and services over the long haul.
Compensation for its Chief Executive Officer, Steven Schwager,
was $431,654 which was 0.17% of expenses. For purposes
of comparison, Ruth Messenger, the President of the
American Jewish World Service, was $218,625 which
was 0.76% of expenses. These are both extremely low
percentages for a nonprofit to pay its chief executive.
As of fiscal year 2007, JDC had net assets of $379,673,951
and total assets of $474,991,928. JDC had investments of
publicly traded securities of $337,787,541 (990 Tax return –
line 54a) and it had investments of other securities of $0 (line
54b). JDC had cash non- interest bearing investments of
$64,486,725 (line 45) and savings and temporary cash
investments of $11,482,486 (line 46.) It had pledges receivable
less allowance for doubtful accounts of $22,642,102 (line 48c.)
JDC had fixed assets of land, buildings and equipment less
accumulated depreciation of $24,292,621 (line 57c) and other
investments of $0 (line 56.)
According to this blog’s financial transparency rating system
of information provided by the nonprofit on its own website,
JDC has a transparency rating of 1 star (6 stars is the highest
Rating.) Of the following six items, JDC provided only its
Charity Navigator rating on its website:
1) The nonprofit’s Charity Navigator rating
2) A pie-chart breakdown of the nonprofit’s expenses
3) The nonprofits most recently filed 990 tax return
4) The nonprofit’s annual report
5) The nonprofit’s audited financial statement
6) The nonprofit’s investment philosophy
DISCUSSION:
As of fiscal year 2007, JDC was a highly financially
efficient nonprofit with high organizational capacity.
A large percentage of its assets, 71%, were in publicly traded
securities that have since taken a 30-40% hit from the Wall Street
meltdown. Another 5% of its assets were in pledges
receivable of which JDC discounts 21% for doubtful
accounts; this optimistic expectation will not be realized.
Though JDC had no direct exposure to Madoff investments,
the downturn on Wall Street will cause its donors to reduce their
support. Its excellent working capital ratio, of 1.53 years, will
help it limit the amount it will have to reduce its support other
nonprofits.
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,
JDC should be more transparent about its finances. JDC
should provide additional financial information on its web site.
Thursday, July 30, 2009
Thursday, July 9, 2009
A Nonprofit Financial Transparency Rating System
Mark Bane, the Chairman of the Orthodox Union Board of
Governors, wrote an article in the current issue of Jewish
Action entitled “The Financial Restructuring of the American
Orthodox Community.” In the article Bane states that many
Jewish nonprofits remain “oblivious to the bleak new economic
realities.” If corporate CEOs failed to respond to these new
realities, their actions would constitute a breach of fiduciary
duty to shareholders and creditors. Nonprofit leaders do not
have these fiduciary responsibilities, but their failure to
respond to the crisis indicates that they are not acting in a
responsible manner in the allocation of the Jewish community’s
limited resources.
During a credit crunch, lenders to business demand greater
transparency and accountability. Nonprofit donors are the
equivalent to lenders to business and they will also demand
increased financial transparency and greater accountability of
how their dollars are being used.
These demands, rather than being problematic, are actually an
opportunity for well managed nonprofits. Bane stated that
“…significant donors are likely to be even more generous when
they observe their money being used in a responsible manner.”
What should nonprofits do to better respond to donors’ growing demands for additional financial information? Bane proposed that nonprofits should have a uniform standard for reporting their financial information.
Following is a possible uniform standard for reporting financial information that would allow donors to compare the transparency of different nonprofits. This system is similar to the donor friendly four star system used by Charity Navigator for evaluating nonprofit efficiency and capacity. For each parameter provided on the nonprofit’s website, the nonprofit would receive one star. A nonprofit that provided each of the following financial parameters on its website would receive a six star rating.
Provided on nonprofit’s website:
1) The nonprofit’s Charity Navigator rating
2) A pie-chart breakdown of the nonprofit’s expenses
3) The nonprofits most recently filed 990 tax return
4) The nonprofit’s annual report
5) The nonprofit’s audited financial statement
6) The nonprofit’s investment philosophy
This transparency system would allow a donor to conclude that a
nonprofit with a five star rating is more transparent, and acting more
responsibly, than a nonprofit with a three star rating. Bane believes that not only would this system help the donor, but it would help the well managed nonprofit as donors are more likely to be more generous with the more transparent nonprofit.
Governors, wrote an article in the current issue of Jewish
Action entitled “The Financial Restructuring of the American
Orthodox Community.” In the article Bane states that many
Jewish nonprofits remain “oblivious to the bleak new economic
realities.” If corporate CEOs failed to respond to these new
realities, their actions would constitute a breach of fiduciary
duty to shareholders and creditors. Nonprofit leaders do not
have these fiduciary responsibilities, but their failure to
respond to the crisis indicates that they are not acting in a
responsible manner in the allocation of the Jewish community’s
limited resources.
During a credit crunch, lenders to business demand greater
transparency and accountability. Nonprofit donors are the
equivalent to lenders to business and they will also demand
increased financial transparency and greater accountability of
how their dollars are being used.
These demands, rather than being problematic, are actually an
opportunity for well managed nonprofits. Bane stated that
“…significant donors are likely to be even more generous when
they observe their money being used in a responsible manner.”
What should nonprofits do to better respond to donors’ growing demands for additional financial information? Bane proposed that nonprofits should have a uniform standard for reporting their financial information.
Following is a possible uniform standard for reporting financial information that would allow donors to compare the transparency of different nonprofits. This system is similar to the donor friendly four star system used by Charity Navigator for evaluating nonprofit efficiency and capacity. For each parameter provided on the nonprofit’s website, the nonprofit would receive one star. A nonprofit that provided each of the following financial parameters on its website would receive a six star rating.
Provided on nonprofit’s website:
1) The nonprofit’s Charity Navigator rating
2) A pie-chart breakdown of the nonprofit’s expenses
3) The nonprofits most recently filed 990 tax return
4) The nonprofit’s annual report
5) The nonprofit’s audited financial statement
6) The nonprofit’s investment philosophy
This transparency system would allow a donor to conclude that a
nonprofit with a five star rating is more transparent, and acting more
responsibly, than a nonprofit with a three star rating. Bane believes that not only would this system help the donor, but it would help the well managed nonprofit as donors are more likely to be more generous with the more transparent nonprofit.
Thursday, July 2, 2009
American Committee Shaare Zedek Medical Center
MISSION:
“The American Committee for Shaare Zedek Medical
Center (ACSZ), www.acsz.org, in Jerusalem provides
financial support, services and equipment for the Shaare
Zedek Hospital in Jerusalem in order to support health
care, research and nursing programs in all branches of
medicine. Founded in 1902, Shaare Zedek has been
known as the Hospital with a Heart for more than a
century. Patients have consistently streamed to our
hospital, seeking top level treatment in a compassionate,
supportive and nurturing environment. Today, while our
reputation as the most exceptional hospital for health care
treatment continues to grow, Shaare Zedek has taken its
commitment to its patients to the next level by providing
industry leading, cutting-edge medical care.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)America’s leading charity evaluator, ACSZ as an overall
rating of two stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of ACSZ based on 990 tax returns through fiscal year 2007:
Overall Rating **
Organizational Efficiency: Program Expenses 76.0%
Administrative Expenses 7.0%
Fundraising Expenses 16.9%
Fundraising Efficiency $0.14
(ACSZMC spends $0.14 to raise $1.)
Efficiency Rating **
Organizational Capacity:
Program Revenue Growth 2.9%
Program Expenses Growth -4.1%
Working Capital Ratio (years) 1.70
(ACSZMCcan sustain itself for 1.70 years
without generating new revenue.)
Capacity Rating **
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 its programs and services over the long haul.
Compensation for its Executive Vice President, Paul Glasser,
was $226,173 which was 1.19% of expenses. For purposes
of comparison, Ruth Messenger, the President of the
American Jewish World Service, was $218,625 which
was 0.76% of expenses.
As of fiscal year 2007, ACSZ had net assets of $28,331,359.
ACSZ had investments of publicly traded securities of
$18,873,338 (990 Tax return – line 54a) and it had
investments of other securities of $0 (line 54b). ACSZ had
cash non- interest bearing investments of $1,839 (line 45) and
savings and temporary cash investments of $2,652,470
(line 46.) It had pledges receivable less allowance for doubtful
accounts of $11,230,530 (line 48c.) ACSZ had fixed assets
of land, buildings and equipment less accumulated
depreciation of $44,630 (line 57c) and other investments of
$647,961 (line 56.)
DISCUSSION:
As of fiscal year 2007, ACSZ was a moderately financially
efficient nonprofit with moderate organizational capacity.
A large percentage of its assets, 64%, were in publicly traded
securities that have taken a 30-40% hit from the Wall Street
meltdown. Another 39% of its assets were in pledges
receivable of which ACSZ discounts less than 1% for doubtful
accounts; this optimistic expectation will not be realized.
Though AMSZ had no direct exposure to Madoff investments,
the downturn on Wall Street will cause its donors to reduce their
support. Its excellent working capital ratio, of 1.70 years, will
help it limit the amount it will have to reduce its support of the
Shaare Zedek Medical Center.
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,
ACSZ should be more transparent about its finances. ACSZ
should emulate the transparency of the American Jewish World
Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of
its investments.
3) It should provide its Charity Navigator rating.
4) It should provide a pie chart breakdown of its expenses.
5) 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: Introduction of a non-profit financial
transparency rating sytem.
“The American Committee for Shaare Zedek Medical
Center (ACSZ), www.acsz.org, in Jerusalem provides
financial support, services and equipment for the Shaare
Zedek Hospital in Jerusalem in order to support health
care, research and nursing programs in all branches of
medicine. Founded in 1902, Shaare Zedek has been
known as the Hospital with a Heart for more than a
century. Patients have consistently streamed to our
hospital, seeking top level treatment in a compassionate,
supportive and nurturing environment. Today, while our
reputation as the most exceptional hospital for health care
treatment continues to grow, Shaare Zedek has taken its
commitment to its patients to the next level by providing
industry leading, cutting-edge medical care.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)America’s leading charity evaluator, ACSZ as an overall
rating of two stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of ACSZ based on 990 tax returns through fiscal year 2007:
Overall Rating **
Organizational Efficiency: Program Expenses 76.0%
Administrative Expenses 7.0%
Fundraising Expenses 16.9%
Fundraising Efficiency $0.14
(ACSZMC spends $0.14 to raise $1.)
Efficiency Rating **
Organizational Capacity:
Program Revenue Growth 2.9%
Program Expenses Growth -4.1%
Working Capital Ratio (years) 1.70
(ACSZMCcan sustain itself for 1.70 years
without generating new revenue.)
Capacity Rating **
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 its programs and services over the long haul.
Compensation for its Executive Vice President, Paul Glasser,
was $226,173 which was 1.19% of expenses. For purposes
of comparison, Ruth Messenger, the President of the
American Jewish World Service, was $218,625 which
was 0.76% of expenses.
As of fiscal year 2007, ACSZ had net assets of $28,331,359.
ACSZ had investments of publicly traded securities of
$18,873,338 (990 Tax return – line 54a) and it had
investments of other securities of $0 (line 54b). ACSZ had
cash non- interest bearing investments of $1,839 (line 45) and
savings and temporary cash investments of $2,652,470
(line 46.) It had pledges receivable less allowance for doubtful
accounts of $11,230,530 (line 48c.) ACSZ had fixed assets
of land, buildings and equipment less accumulated
depreciation of $44,630 (line 57c) and other investments of
$647,961 (line 56.)
DISCUSSION:
As of fiscal year 2007, ACSZ was a moderately financially
efficient nonprofit with moderate organizational capacity.
A large percentage of its assets, 64%, were in publicly traded
securities that have taken a 30-40% hit from the Wall Street
meltdown. Another 39% of its assets were in pledges
receivable of which ACSZ discounts less than 1% for doubtful
accounts; this optimistic expectation will not be realized.
Though AMSZ had no direct exposure to Madoff investments,
the downturn on Wall Street will cause its donors to reduce their
support. Its excellent working capital ratio, of 1.70 years, will
help it limit the amount it will have to reduce its support of the
Shaare Zedek Medical Center.
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,
ACSZ should be more transparent about its finances. ACSZ
should emulate the transparency of the American Jewish World
Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of
its investments.
3) It should provide its Charity Navigator rating.
4) It should provide a pie chart breakdown of its expenses.
5) 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: Introduction of a non-profit financial
transparency rating sytem.
Thursday, June 25, 2009
Ohr Somayach
MISSION:
“Ohr Somayach International (OSI), www.ohr.edu provides religious, educational and charitable aid to North American and Israeli institutions. OSI began over thirty years ago as a response to the desire of a handful of young people who wanted to learn more about Judaism. It quickly grew to be not only a sensitive respondent to the needs of the Jewish community, but an active initiator of new and innovative educational programs around the world. OSI involvement in mass media has included Shma Yisrael magazine; film, radio and television programs; slide shows and video productions; computer software; and a series of books and publications entitled Jerusalem Echoes. These endeavors have helped crystallize and project OSI as an innovative force in Jewish education."
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, OSI has an overall rating of two stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of OSI based on 990 tax returns through fiscal year 2007:
Overall Rating **
Organizational Efficiency: Program Expenses 95.4%
Administrative Expenses 1.6%
Fundraising Expenses 2.8%
Fundraising Efficiency $0.02
(OSI spends $0.02 to raise $1.)
Efficiency Rating ****
Organizational Capacity:
Program Revenue Growth 0.9%
Program Expenses Growth -5.0%
Working Capital Ratio (years) 0.07
(OSI can sustain itself for 0.07 years
without generating new revenue.)
Capacity Rating *
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 its programs and services over the long haul.
Compensation for its Director, Rabbi Pinchas Kasnett, was $110,958 which was 2.08% of expenses. For purposes of comparison, Ruth Messenger, the President of the American Jewish World Service, was $218,625 which was 0.76% of expenses.
As of fiscal year 2007, OSI had net assets of $660,993. OSI had investments of publicly traded securities of $88,310 (990 Tax return – line 54a) and it had investments of other securities of $31,104 (line 54b). OSI had cash non- interest bearing investments of $29,178 and savings and temporary cash investments of $246,081. It had pledges receivable less allowance for doubtful accounts of $0. AJWS had fixed assets of land, buildings and equipment less accumulated depreciation of $45,716. OSI has notes and loans receivable (line 51b) of $477,000 of which $469,000 is in the name of Procidine Inc.
DISCUSSION:
As of fiscal year 2007, OSI was highly financially efficient nonprofit. However, OSI has a limited organizational capacity. A large percentage of its assets are in a non-liquid note receivable (Procidine Inc.) and it has a working capital ratio of 0.07 years. Though OSI had no direct exposure to Madoff investments, the downturn on Wall Street may cause its donors to reduce their
support of OSI. OSI will probably be forced to reduce the amount
of funding it provides to its target programs; if the downturn persists
for a long term, OSI may have difficulty continuing to function.
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, OSI should be more transparent about its finances. OSI should emulate the transparency of the American Jewish World Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of its investments.
3) Since a large percentage of its assets are connected to Procidine Inc. OSI should be transparent about the identity of Procidine Inc.
4) It should provide the fact that it has earned a four star efficiency rating from Charity Navigator and it should provide a pie chart breakdown of its expenses.
5) 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: American Committee for Shaare Zedek Medical Center
“Ohr Somayach International (OSI), www.ohr.edu provides religious, educational and charitable aid to North American and Israeli institutions. OSI began over thirty years ago as a response to the desire of a handful of young people who wanted to learn more about Judaism. It quickly grew to be not only a sensitive respondent to the needs of the Jewish community, but an active initiator of new and innovative educational programs around the world. OSI involvement in mass media has included Shma Yisrael magazine; film, radio and television programs; slide shows and video productions; computer software; and a series of books and publications entitled Jerusalem Echoes. These endeavors have helped crystallize and project OSI as an innovative force in Jewish education."
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, OSI has an overall rating of two stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of OSI based on 990 tax returns through fiscal year 2007:
Overall Rating **
Organizational Efficiency: Program Expenses 95.4%
Administrative Expenses 1.6%
Fundraising Expenses 2.8%
Fundraising Efficiency $0.02
(OSI spends $0.02 to raise $1.)
Efficiency Rating ****
Organizational Capacity:
Program Revenue Growth 0.9%
Program Expenses Growth -5.0%
Working Capital Ratio (years) 0.07
(OSI can sustain itself for 0.07 years
without generating new revenue.)
Capacity Rating *
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 its programs and services over the long haul.
Compensation for its Director, Rabbi Pinchas Kasnett, was $110,958 which was 2.08% of expenses. For purposes of comparison, Ruth Messenger, the President of the American Jewish World Service, was $218,625 which was 0.76% of expenses.
As of fiscal year 2007, OSI had net assets of $660,993. OSI had investments of publicly traded securities of $88,310 (990 Tax return – line 54a) and it had investments of other securities of $31,104 (line 54b). OSI had cash non- interest bearing investments of $29,178 and savings and temporary cash investments of $246,081. It had pledges receivable less allowance for doubtful accounts of $0. AJWS had fixed assets of land, buildings and equipment less accumulated depreciation of $45,716. OSI has notes and loans receivable (line 51b) of $477,000 of which $469,000 is in the name of Procidine Inc.
DISCUSSION:
As of fiscal year 2007, OSI was highly financially efficient nonprofit. However, OSI has a limited organizational capacity. A large percentage of its assets are in a non-liquid note receivable (Procidine Inc.) and it has a working capital ratio of 0.07 years. Though OSI had no direct exposure to Madoff investments, the downturn on Wall Street may cause its donors to reduce their
support of OSI. OSI will probably be forced to reduce the amount
of funding it provides to its target programs; if the downturn persists
for a long term, OSI may have difficulty continuing to function.
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, OSI should be more transparent about its finances. OSI should emulate the transparency of the American Jewish World Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of its investments.
3) Since a large percentage of its assets are connected to Procidine Inc. OSI should be transparent about the identity of Procidine Inc.
4) It should provide the fact that it has earned a four star efficiency rating from Charity Navigator and it should provide a pie chart breakdown of its expenses.
5) 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: American Committee for Shaare Zedek Medical Center
Sunday, June 7, 2009
American Jewish World Service
MISSION:
“Established in 1985, the American Jewish World Service (AJWS) is an international development organization motivated by Judaism's imperative to pursue justice. AJWS is dedicated to alleviating poverty, hunger and disease among the people of the developing world regardless of race, religion or nationality. Through grants to grassroots organizations, volunteer service, advocacy and education, AJWS fosters civil society, sustainable development and human rights for all people, while promoting the values and responsibilities of global citizenship within the Jewish community.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AJWS has an overall rating of three stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of AJWS based on 990 tax returns through fiscal year 2007:
Overall Rating ***
Organizational Efficiency: Program Expenses 81.6%
Administrative Expenses 7.9%
Fundraising Expenses 10.4%
Fundraising Efficiency $0.10
(AJWS spends $0.10 to raise $1.)
Efficiency Rating ***
Organizational Capacity:
Program Revenue Growth 27.1%
Program Expenses Growth 37.8%
Working Capital Ratio (years) 0.47
(AJWS can sustain itself for 0.47 years
without generating new revenue.)
Capacity Rating ****
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 its programs and services over the long haul.
Compensation for its President, Ruth Messinger, was $218,625 which was 0.76% of expenses. Percentage wise, the 0.76% is a very low figure compared to the compensation paid to other nonprofit executives.
As of fiscal year 2007, AJWS had net assets of $15,957,924. AJWS had investments of publicly traded securities of $16,220,897 (990 Tax return – line 54a) and it had investments of other securities of $0 (line 54b). AJWS had cash non- interest bearing investments of $2,009,272 and savings and temporary cash investments of $1,117,491. It had pledges receivable less allowance for doubtful accounts of $2,903,893 (AJWS assumed there would be no doubtful accounts, that is, it assumed it would collect 100% of the monies pledged.) AJWS had fixed assets of land, buildings and equipment less accumulated depreciation of $2,353,514. In fiscal year 2007, AJWS operated with an excess of $2,075,612.
DISCUSSION:
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. During today’s present credit crisis, corporations must meet harsher requirements of transparency and accountability demanded by its creditors and lenders. In similar fashion, nonprofits need to provide their donors with increased financial transparency and accountability in order for the donors to responsibly allocate their diminished resources.
AJWS is the gold standard for nonprofit financial transparency. Until a uniform standard of financial reporting is accepted by all nonprofits, AJWS is the model of financial reporting that other nonprofits should emulate. AJWS recently provided its 2008 (fiscal year ended December 31, 2008) financial report (completed on May 14, 2009 by the accounting firm of McGladrey & Pullen) on its website. In providing this important information with such alacrity, AJWS is demonstrating its integrity to its donors and supporters. AJWS, like the rest of the world, suffered a financial hit in 2008. Its net assets dropped from $15,957,924 to $13,505,608; this represents a loss of approximately 15%. This drop resulted from a loss of investment income (both realized and unrealized losses) of $3,392,516. Admittedly, this financial information is negative and diminished funds will negatively impact AJWS’ ability to fund all of its expenses. However, donors are likely to be more generous, not less generous, when they learn that their money is being used in a responsible manner.
“Established in 1985, the American Jewish World Service (AJWS) is an international development organization motivated by Judaism's imperative to pursue justice. AJWS is dedicated to alleviating poverty, hunger and disease among the people of the developing world regardless of race, religion or nationality. Through grants to grassroots organizations, volunteer service, advocacy and education, AJWS fosters civil society, sustainable development and human rights for all people, while promoting the values and responsibilities of global citizenship within the Jewish community.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AJWS has an overall rating of three stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of AJWS based on 990 tax returns through fiscal year 2007:
Overall Rating ***
Organizational Efficiency: Program Expenses 81.6%
Administrative Expenses 7.9%
Fundraising Expenses 10.4%
Fundraising Efficiency $0.10
(AJWS spends $0.10 to raise $1.)
Efficiency Rating ***
Organizational Capacity:
Program Revenue Growth 27.1%
Program Expenses Growth 37.8%
Working Capital Ratio (years) 0.47
(AJWS can sustain itself for 0.47 years
without generating new revenue.)
Capacity Rating ****
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 its programs and services over the long haul.
Compensation for its President, Ruth Messinger, was $218,625 which was 0.76% of expenses. Percentage wise, the 0.76% is a very low figure compared to the compensation paid to other nonprofit executives.
As of fiscal year 2007, AJWS had net assets of $15,957,924. AJWS had investments of publicly traded securities of $16,220,897 (990 Tax return – line 54a) and it had investments of other securities of $0 (line 54b). AJWS had cash non- interest bearing investments of $2,009,272 and savings and temporary cash investments of $1,117,491. It had pledges receivable less allowance for doubtful accounts of $2,903,893 (AJWS assumed there would be no doubtful accounts, that is, it assumed it would collect 100% of the monies pledged.) AJWS had fixed assets of land, buildings and equipment less accumulated depreciation of $2,353,514. In fiscal year 2007, AJWS operated with an excess of $2,075,612.
DISCUSSION:
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. During today’s present credit crisis, corporations must meet harsher requirements of transparency and accountability demanded by its creditors and lenders. In similar fashion, nonprofits need to provide their donors with increased financial transparency and accountability in order for the donors to responsibly allocate their diminished resources.
AJWS is the gold standard for nonprofit financial transparency. Until a uniform standard of financial reporting is accepted by all nonprofits, AJWS is the model of financial reporting that other nonprofits should emulate. AJWS recently provided its 2008 (fiscal year ended December 31, 2008) financial report (completed on May 14, 2009 by the accounting firm of McGladrey & Pullen) on its website. In providing this important information with such alacrity, AJWS is demonstrating its integrity to its donors and supporters. AJWS, like the rest of the world, suffered a financial hit in 2008. Its net assets dropped from $15,957,924 to $13,505,608; this represents a loss of approximately 15%. This drop resulted from a loss of investment income (both realized and unrealized losses) of $3,392,516. Admittedly, this financial information is negative and diminished funds will negatively impact AJWS’ ability to fund all of its expenses. However, donors are likely to be more generous, not less generous, when they learn that their money is being used in a responsible manner.
Sunday, May 17, 2009
UJA Federation of New York
MISSION:
UJA-Federation of New York (http://www.ujafedny.org)
"cares for those in need, rescues those in harm's way,
and renews and strengthens the Jewish people in New York,
in Israel, and around the world. We reach out to the poor,
the elderly, and people in need, providing social and
humanitarian services in New York and around the world;
connect communities worldwide by aiding Jews in distress
and by strengthening and sustaining Jewish communities
from Belarus to Buenos Aires; and we support programs
to make Jewish education more meaningful, to deepen
Jewish identity, and to recruit and train dynamic
professionals to serve the community."
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator,
(http://www.charitynavigator.org)/
America’s leadingcharity evaluator, UJAFNY has an overall rating of four stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of UJAFNY based on 990 tax returns through fiscal year 2007:
Overall Rating ****
Organizational Efficiency: Program Expenses 79.2%
Administrative Expenses 6.9%
Fundraising Expenses 13.8%
Fundraising Efficiency $0.14
(UJAFNY spends $0.14 to raise $1.)
Efficiency Rating ***
Organizational Capacity:
Program Revenue Growth 10.8%
Program Expenses Growth 11.7%
Working Capital Ratio (years) 2.68
(UJAFNY can sustain itself for 2.68 years
without generating new revenue.)
Capacity Rating ****
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 its programs and services over the long haul.
Compensation for its Executive Vice President and CEO, John Ruskay was $428,000 which was 0.17% of expenses. Percentage wise, the 0.17% is a very low figure.
As of fiscal year 2007, UJAFNY had net assets of $1,070,066,000. UJAFNY had investments of publicly traded securities of $519,275,000 (990 Tax return – line 54a) and it had investments of other securities $438,208,000 (line 54b); the attached Securities Schedule (page 89 of the tax return) described most of this amount, $378,238, as Alternative Investments. UJAFNY had cash non- interest bearing investments of $7,736,000 and savings and temporary cash investments of $80,650,000. It had pledges receivable less allowance for doubtful accounts of $91,070,000. UJAFNY had fixed assets of land, buildings and equipment less accumulated depreciation of $77,212,000. In fiscal year 2007, UJAFNY operated with an excess of $30,208,000.
DISCUSSION:
As of fiscal year 2007, UJAFNY had a working capital ratio of 2.68 years. with approximately 10% of its net assets in liquid investments. Though UJAFNY had no direct exposure to Madoff investments, some of its assets in the form of pledges receivable probably had exposure to Madoff investments. Since less than 10% of its net assets are in the form of pledges, the Madoff scandal will have minimal affect on UJAFNY’s ability to fund its programs. However, since a large portion of its net assets were in the form of securities, and since most investment portfolios took a hit of at least 33%, UJAFNY will be forced to reduce the amount of funding it provides to its target programs.
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, UJAFNY should be more transparent about its finances. UJAFNY should emulate the transparency of the American Jewish World Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of its investments.
3) It should provide its complete fiscal year 2007 financial statements, not an abridged statement.
4) It should provide the fact that it has earned an overall four star rating from Charity Navigator and it should provide a pie chart breakdown of its expenses.
5) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.
6) It should provide information that its CEO is compensated at a rate that is a very small rate of expenses and that he took a cut in pay in the past year.
Next Week’s Blog: American Jewish World Service
UJA-Federation of New York (http://www.ujafedny.org)
"cares for those in need, rescues those in harm's way,
and renews and strengthens the Jewish people in New York,
in Israel, and around the world. We reach out to the poor,
the elderly, and people in need, providing social and
humanitarian services in New York and around the world;
connect communities worldwide by aiding Jews in distress
and by strengthening and sustaining Jewish communities
from Belarus to Buenos Aires; and we support programs
to make Jewish education more meaningful, to deepen
Jewish identity, and to recruit and train dynamic
professionals to serve the community."
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator,
(http://www.charitynavigator.org)/
America’s leadingcharity evaluator, UJAFNY has an overall rating of four stars (four stars is the highest rating.) Charity Navigator provides the following breakdown of UJAFNY based on 990 tax returns through fiscal year 2007:
Overall Rating ****
Organizational Efficiency: Program Expenses 79.2%
Administrative Expenses 6.9%
Fundraising Expenses 13.8%
Fundraising Efficiency $0.14
(UJAFNY spends $0.14 to raise $1.)
Efficiency Rating ***
Organizational Capacity:
Program Revenue Growth 10.8%
Program Expenses Growth 11.7%
Working Capital Ratio (years) 2.68
(UJAFNY can sustain itself for 2.68 years
without generating new revenue.)
Capacity Rating ****
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 its programs and services over the long haul.
Compensation for its Executive Vice President and CEO, John Ruskay was $428,000 which was 0.17% of expenses. Percentage wise, the 0.17% is a very low figure.
As of fiscal year 2007, UJAFNY had net assets of $1,070,066,000. UJAFNY had investments of publicly traded securities of $519,275,000 (990 Tax return – line 54a) and it had investments of other securities $438,208,000 (line 54b); the attached Securities Schedule (page 89 of the tax return) described most of this amount, $378,238, as Alternative Investments. UJAFNY had cash non- interest bearing investments of $7,736,000 and savings and temporary cash investments of $80,650,000. It had pledges receivable less allowance for doubtful accounts of $91,070,000. UJAFNY had fixed assets of land, buildings and equipment less accumulated depreciation of $77,212,000. In fiscal year 2007, UJAFNY operated with an excess of $30,208,000.
DISCUSSION:
As of fiscal year 2007, UJAFNY had a working capital ratio of 2.68 years. with approximately 10% of its net assets in liquid investments. Though UJAFNY had no direct exposure to Madoff investments, some of its assets in the form of pledges receivable probably had exposure to Madoff investments. Since less than 10% of its net assets are in the form of pledges, the Madoff scandal will have minimal affect on UJAFNY’s ability to fund its programs. However, since a large portion of its net assets were in the form of securities, and since most investment portfolios took a hit of at least 33%, UJAFNY will be forced to reduce the amount of funding it provides to its target programs.
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, UJAFNY should be more transparent about its finances. UJAFNY should emulate the transparency of the American Jewish World Service and provide the following information on its web site:
1) Its three most recently filed tax returns.
2) Its investment philosophy and a breakdown of the risk level of its investments.
3) It should provide its complete fiscal year 2007 financial statements, not an abridged statement.
4) It should provide the fact that it has earned an overall four star rating from Charity Navigator and it should provide a pie chart breakdown of its expenses.
5) It should provide information about its exposure to Madoff
investments on the homepage of website, especially since it had
NO exposure to Madoff.
6) It should provide information that its CEO is compensated at a rate that is a very small rate of expenses and that he took a cut in pay in the past year.
Next Week’s Blog: American Jewish World Service
Sunday, May 10, 2009
Jewish National Fund
MISSION: “Founded in 1926, the Jewish National Fund (JNF) www.jnf.org America has been a vital part of Zionist history, achieving its goal of purchasing the land that would become the State of Israel, helping to develop that land into a thriving nation, and protecting Israel's environment. Over the past century, JNF has planted over 240 million trees, built over 180 dams and reservoirs, developed over 250,000 acres of land, created more than 1,000 parks throughout Israel and educated students around the world about Israel and the environment. As a global environmental leader focusing on Israel, JNF is committed to improving the quality of life for all who live in the Middle East.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, JNF has an overall
rating of four stars (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of JNF based on 990 tax returns through
2007:
Overall Rating: Four stars ****
Organizational Efficiency:
Efficiency Rating: Four stars ****
Program Expenses: 84.3
Administrative Expenses: 7.3%
Fundraising Expenses: 8.2%
Fundraising Efficiency: $0.08
(JNF spends $0.08 to raise $1.)
Organizational Capacity:
Capacity Rating: Four stars ****
Primary Revenue Growth: 9.3%
Program Expenses Growth: 14.9%
Working Capital Ratio (years): 0.49
(JNF can sustain itself for 0.49 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, Russell Robinson, was $302,531 which represents 0.67% 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. Percentage wise, these are very low figures for nonprofit organizations.
As of fiscal year 2007, JNF had net assets of $52,752,456. JNF had
investments of publicly traded securities of $15,192,853 of which 36% was invested in riskier common stock. JNF had cash non-interest bearing investments of $2,084,077 and savings and temporary cash investments of $1,192,902. It had pledges receivable less allowance for doubtful accounts of $20,629,568. JNF had fixed assets of land, buildings and equipment less accumulated depreciation of $3,939,984. In fiscal year 2007, JNF operated with an excess of $5,088,616.
JNF also runs a donor advised fund program and made grants from these donor advised funds of $710,800.
DISCUSSION:
As of fiscal year 2007, JNF had a working capital ratio of 0.49 years with approximately 1/3 of its net assets in liquid investments. 38% of
its net assets are in the form of pledges receivable after allowing for a 25% rate of doubtful accounts. Though JNF had no direct exposure to Madoff investments, some of its assets in the form of pledges receivable probably had exposure to Madoff investments. Thus, in the present economic environment, JNF will experience a higher rate of doubtful accounts.
Accordingly, JNF will not be able to fund all the programs that it has in the past; JNF will have to reduce all of its expense with a concomitant decrease in organizational capacity.
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, JNF
should be more transparent about its finances.
JNF should provide the following information on its web site:
1) Its three most recently filed tax returns.
2) 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.
4) It should provide information explaining what it means to have
an overall four star rating from Charity Navigator.
Next Week’s Blog: American Jewish World Service
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator
(http://www.charitynavigator.org/),
America’s leading charity evaluator, JNF has an overall
rating of four stars (four stars is the highest rating.)
Charity Navigator provides the following financial
breakdown of JNF based on 990 tax returns through
2007:
Overall Rating: Four stars ****
Organizational Efficiency:
Efficiency Rating: Four stars ****
Program Expenses: 84.3
Administrative Expenses: 7.3%
Fundraising Expenses: 8.2%
Fundraising Efficiency: $0.08
(JNF spends $0.08 to raise $1.)
Organizational Capacity:
Capacity Rating: Four stars ****
Primary Revenue Growth: 9.3%
Program Expenses Growth: 14.9%
Working Capital Ratio (years): 0.49
(JNF can sustain itself for 0.49 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, Russell Robinson, was $302,531 which represents 0.67% 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. Percentage wise, these are very low figures for nonprofit organizations.
As of fiscal year 2007, JNF had net assets of $52,752,456. JNF had
investments of publicly traded securities of $15,192,853 of which 36% was invested in riskier common stock. JNF had cash non-interest bearing investments of $2,084,077 and savings and temporary cash investments of $1,192,902. It had pledges receivable less allowance for doubtful accounts of $20,629,568. JNF had fixed assets of land, buildings and equipment less accumulated depreciation of $3,939,984. In fiscal year 2007, JNF operated with an excess of $5,088,616.
JNF also runs a donor advised fund program and made grants from these donor advised funds of $710,800.
DISCUSSION:
As of fiscal year 2007, JNF had a working capital ratio of 0.49 years with approximately 1/3 of its net assets in liquid investments. 38% of
its net assets are in the form of pledges receivable after allowing for a 25% rate of doubtful accounts. Though JNF had no direct exposure to Madoff investments, some of its assets in the form of pledges receivable probably had exposure to Madoff investments. Thus, in the present economic environment, JNF will experience a higher rate of doubtful accounts.
Accordingly, JNF will not be able to fund all the programs that it has in the past; JNF will have to reduce all of its expense with a concomitant decrease in organizational capacity.
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, JNF
should be more transparent about its finances.
JNF should provide the following information on its web site:
1) Its three most recently filed tax returns.
2) 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.
4) It should provide information explaining what it means to have
an overall four star rating from Charity Navigator.
Next Week’s Blog: American Jewish World Service
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