MISSION:
“Founded in 1925, AMIT is the world's leading supporter
of religious Zionist education and social services for
Israel's children and youth, nurturing and educating Israeli
children to become productive, contributing members of
society. Our more than 70 schools and programs constitute
Israel's only government-recognized network of religious
Jewish education, incorporating academic and technological
studies. These also include youth villages and facilities
for children in foster care. At present, AMIT's more than
20,000 children come largely from impoverished and/or
dysfunctional families; significant numbers are new
Ethiopian and Russian immigrants, as well as young people
of Sephardic backgrounds.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AMIT has an overall rating
of three stars (four stars is the highest rating.) Charity
Navigator provides the following breakdown of AMIT based on
990 tax returns through fiscal year 2007:
Overall Rating ***
Organizational Efficiency: Program Expenses 79.6%
Administrative Expenses 13.1%
Fundraising Expenses 7.2%
Fundraising Efficiency $0.06
(AMIT spends 0.06 to raise $1.)
Efficiency Rating ****
Organizational Capacity:
Primary Revenue Growth 20.0%
Program Expenses Growth -8.5%
Working Capital Ratio (years) 0.92
(AMIT can sustain itself for 0.92 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, Arnold Gerson,
was $287,158 which was 3.58% of expenses. For purposes
of comparison, compensation for Ruth Messenger, the
President of the American Jewish World Service, was
$218,625 which was 0.76% of expenses.
As of fiscal year 2007, AMIT had net assets of $17,798,411
(up from 17,487,511 in 2006) and total assets of $19,998,800
(up from $19,420,466 in 2006.) AMIT had investments of
publicly traded securities of $3,128,290 (990 Tax return –
line 54a) and it had investments of other securities of $83,772
(line 54b). AMIT had cash non- interest bearing
investments of $1,033,960 (line 45) and savings and temporary
cash investments of $3,541,875 (line 46.) It had pledges
receivable less allowance for doubtful accounts of $12,500
(line 48b.)AMIT had fixed assets of land, buildings and
equipment less accumulated depreciation of $10,580,195
(line 57c) and other investments of $0 (line 56.)
PET (Philanthropy Economic Transparency) Index:
According to this blog’s financial transparency rating
system of information provided by the nonprofit on its
own website, AMIT has a transparency rating of 3 stars
(6 stars is the highest rating.) Of the following six
items, AMIT provide items 1, 2 and 4 of the following
metrics on its website:
1) The nonprofit’s Charity Navigator rating
2) A 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, AMIT was a financially
efficient nonprofit with high organizational capacity.
Though AMIT had no direct exposure to Madoff
investments, the downturn on Wall Street will cause
its donors to reduce their support. As of fiscal year
2007, a small percentage of its net assets (17%) were
in publicly traded securities and a larger percentage
(25%) were in safe liquid assets; this conservative
investment strategy combined with its good working
capital ratio of 0.92 years will help AMIT weather
the Wall Street meltdown and allow it to continue to
provide support for educational and social services
in Israel.
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. Though AMIT does provide financial information
on its web site, in order to reach out to more selective donors,
AMIT should be even more transparent about its finances.
AMIT should provide an audited financial statement and its
most recently filed tax return on its web site.
Sunday, September 27, 2009
Monday, September 21, 2009
American Friends Alyn Hospital
MISSION:
“American Friends of ALYN Hospital (AFAH), www.alynus.org
supports Israel's premiere rehabilitation center for physically
disabled children, adolescents and young adults. ALYN Hospital
combines expertise and love so that each patient and family can
meet the challenges of living with disabilities and achieve the
highest possible level of mobility and independence. ALYN
Hospital, established over 50 years ago, is one of the world's
leading specialists in the active and intensive rehabilitation
of children with a broad range of physical disabilities and is
the only facility of its kind in Israel. The Hospital currently
has 93 beds for hospitalized patients, 100 beds for day-care
treatment and specialized out patient clinics which receive over
10,000 patient visits a year.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AFAH has an overall rating
of three stars (four stars is the highest rating.) Charity
Navigator provides the following breakdown of AFAH based on
990 tax returns through fiscal year 2006:
Overall Rating ***
Organizational Efficiency: Program Expenses 84.2%
Administrative Expenses 4.1%
Fundraising Expenses 11.5%
Fundraising Efficiency $0.13
(AFAH spends 0.13 to raise $1.)
Efficiency Rating ***
Organizational Capacity:
Primary Revenue Growth 17.0%
Program Expenses Growth 5.2%
Working Capital Ratio (years) 1.71
(AFAH can sustain itself for 1.71 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 Director, Cathy Lanyard,
was $206,615 which was 5.85% of expenses. For purposes
of comparison, compensation for Ruth Messenger, the
President of the American Jewish World Service, was
$218,625 which was 0.76% of expenses.
As of fiscal year 2008, AFAH had net assets of $5,450,214
(down from 7,176,198 in 2007) and total assets of $5,508,989
(down from $7,219,210 in 2007.) AFAH had investments of
publicly traded securities of $3,524,025 (990 Tax return –
Part X: Balance sheet line 11) and it had investments of other
securities of $0 (line 12). AFAH had cash non- interest bearing
investments of $745,598 (line 1) and savings and temporary
cash investments of $0 (line 2.) It had pledges receivable
of $0 (line 3.) AFAH had fixed assets of land, buildings and
equipment less accumulated depreciation of $0 (line 10c) and
other investments of $0 (line 13.)
According to this blog’s financial transparency rating system
of information provided by the nonprofit on its own website,
AFAH has a transparency rating of 0 stars (6 stars is the highest
Rating.) Of the following six items, AFAH did not provide any
of this information 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 2006, AFAH was a financially
efficient nonprofit with high organizational capacity.
As of fiscal year 2008. large percentage of its assets,
64%, were in publicly traded securities; this explains
why its net assets took a hit of 24% reflecting the
meltdown on Wall Street. meltdown. Though AFAH 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 1.71 years,
will help i t limit the amount it will have to reduce its
support of the ALYN Hospital in Israel.
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,
AFAH should be more transparent about its finances. AFAH
should provide additional financial information on its web site.
“American Friends of ALYN Hospital (AFAH), www.alynus.org
supports Israel's premiere rehabilitation center for physically
disabled children, adolescents and young adults. ALYN Hospital
combines expertise and love so that each patient and family can
meet the challenges of living with disabilities and achieve the
highest possible level of mobility and independence. ALYN
Hospital, established over 50 years ago, is one of the world's
leading specialists in the active and intensive rehabilitation
of children with a broad range of physical disabilities and is
the only facility of its kind in Israel. The Hospital currently
has 93 beds for hospitalized patients, 100 beds for day-care
treatment and specialized out patient clinics which receive over
10,000 patient visits a year.”
FINANCIAL EFFICIENCY EVALUATION:
According to Charity Navigator, (http://www.charitynavigator.org)
America’s leading charity evaluator, AFAH has an overall rating
of three stars (four stars is the highest rating.) Charity
Navigator provides the following breakdown of AFAH based on
990 tax returns through fiscal year 2006:
Overall Rating ***
Organizational Efficiency: Program Expenses 84.2%
Administrative Expenses 4.1%
Fundraising Expenses 11.5%
Fundraising Efficiency $0.13
(AFAH spends 0.13 to raise $1.)
Efficiency Rating ***
Organizational Capacity:
Primary Revenue Growth 17.0%
Program Expenses Growth 5.2%
Working Capital Ratio (years) 1.71
(AFAH can sustain itself for 1.71 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 Director, Cathy Lanyard,
was $206,615 which was 5.85% of expenses. For purposes
of comparison, compensation for Ruth Messenger, the
President of the American Jewish World Service, was
$218,625 which was 0.76% of expenses.
As of fiscal year 2008, AFAH had net assets of $5,450,214
(down from 7,176,198 in 2007) and total assets of $5,508,989
(down from $7,219,210 in 2007.) AFAH had investments of
publicly traded securities of $3,524,025 (990 Tax return –
Part X: Balance sheet line 11) and it had investments of other
securities of $0 (line 12). AFAH had cash non- interest bearing
investments of $745,598 (line 1) and savings and temporary
cash investments of $0 (line 2.) It had pledges receivable
of $0 (line 3.) AFAH had fixed assets of land, buildings and
equipment less accumulated depreciation of $0 (line 10c) and
other investments of $0 (line 13.)
According to this blog’s financial transparency rating system
of information provided by the nonprofit on its own website,
AFAH has a transparency rating of 0 stars (6 stars is the highest
Rating.) Of the following six items, AFAH did not provide any
of this information 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 2006, AFAH was a financially
efficient nonprofit with high organizational capacity.
As of fiscal year 2008. large percentage of its assets,
64%, were in publicly traded securities; this explains
why its net assets took a hit of 24% reflecting the
meltdown on Wall Street. meltdown. Though AFAH 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 1.71 years,
will help i t limit the amount it will have to reduce its
support of the ALYN Hospital in Israel.
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,
AFAH should be more transparent about its finances. AFAH
should provide additional financial information on its web site.
Thursday, July 30, 2009
American Jewish Joint Distribution Committee
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.
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 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.
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