Monday, May 21, 2012

Charities Report They Raised $117 Billion Without Spending A Penny


by Gary Snyder

There have been a number of questionable issues surrounding charities submission of the Internal Revenue Service Form 990. One that has been a seemingly on-going problem relates to the misreporting of fundraising expenses and further points to how little oversight there is of the charitable sector.

Fully forty-one percent of all 37,987 charities and other nonprofit groups that collected at least $1 million according to their most recent report to the Internal Revenue Service made what experts agree is a ridiculous claim: They raised significant amounts of money without spending a dime to do so, according to a study of federal tax records by Scripps Howard News Service. 

On their annual tax forms 15,389 nonprofits said they spent nothing for advertising, telephone solicitations, mailed donation appeals, professionally prepared grant applications or staff time for face-to-face pleas for contributions while raising total of $116.7 billion.

For example, when informed that 48 of Goodwill Industries' 127 major affiliates reported raising $387 million at no cost, Goodwill Industries International President and CEO Jim Gibbons said the charity will rethink how it calculates its overhead costs in reports to the federal government and the public.


Washington, D.C.-based International Relief and Development  reported no expenses tied to raising the $13.9 million collected by IRD-US and just $14,300 in expenses for the $706 million raised by IRD Inc. in 2010.

Robert Ottenhoff, president and CEO of the nonprofit oversight group GuideStar provided the financial data for the Scripps study and said "it is ridiculous to think an organization could raise significant amounts of money without spending money to do it," The problem has been known at least since the mid-1990s, when the IRS began compiling and publicly releasing data from the Form 990 income-tax statements that most large nonprofits are required by law to file annually.

The Scripps study found that 22,598 nonprofit groups did report fundraising expenses that totaled $14.3 billion, or about 7 cents for every dollar they raised. (link)








Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)
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