Do non-profit organization donations just pay administrative costs?

Question

Little (like pennies on the dollar) actually going to the cause? I'd prefer responses with sources rather than straight opinions.

So i went to guidestar.com it said that the npca made 28 million (24million from direct public support) and that the expenses were 23million. 14mill+ just for salaries. 5 mill actually going to the parks and 20mil paying to keep up the organization sounds like pennies on the dollar.....

Answer 1

Administrative and development (fundraising) is always a percentage of the total income of a non-profit. There are some websites that can give you information about that, including www.guidestar.com. They have guidelines for what is acceptable for certain types of organizations. You can also view the IRS-990 forms that any NPO that receives over $25,000 annually must file with the IRS. It includes salaries of the top five people (when over $50,000), and fairly detailed information.

Usually the administrative/FR costs should NOT be over 20% and usually should range 5-15%. It really depends on the nature of the organization; some organizations have heavy personnel and retirement costs that drive up the admin side.

Answer 2

The United Way Campaign requires organizations to show what percentage of their donations go to their cause. they probably publ;ish those numbers but only for the groups that meet their requirements. Some organizations have a hard time meeting such a requirement. A museum for example will have a paid staff, often own their building but some have a mortgage, they have heat and light expenses, and they charge very little to see the exhibits. So their expense ratio is high but they can't give the artifacts away to tourists. Does it support their cause (education)? I think so.

Many groups hire a public relations firm to do fund raising. this is the worse way to give money to a charity - through a second party. If you make a donation, give it directly to the organization.

Answer 3

No, usually those costs are covered by grants. Although, I have seen it where they will use in kind donations such as office supplies. I worked for a shelter for a number of years and seen them be very fiscally responsible for any donations they receive. Grants are the pork an beans of most non profits. Grant writers that get results are in high demand for this reason.

Answer 4

You have a valid concern; Ask each of them for their latest report showing that information

Red Cross and others with good records will point you to their website which has the data -- and you can skip the rest.

Answer 5

no. the best place to learn this for free is the www.irs.gov they regulate non profits. i did and they spoke to me for 45 min and sent me a ton of FREE info to keep a non profit legal and helps you keep your org doing good work.