Selecting a charity to support is a bit like playing
God. Ideally, it should take into account your most deeply held
concerns and convictions.
Before sending in a donation to a group, you can now
consider how well it will spend your money by referring to the AIPs
Charity Rating Guide. Each organization
is listed by category with its phone number, financial performance
measurements and an overall grade (where enough information is available).
You can also review the ratings of other charities in the same category
to compare a particular group with those which do similar work.
The Guide indicates whether or not an organization
is eligible to receive tax-deductible contributions, noting those
charities which may have separately incorporated entities with a
different tax-deductibility status.
The Guide shows which groups are new or have
received an updated evaluation.
The Guide shows which groups have provided
AIP the following documents (which we have requested): annual report,
complete audited financial statements and Internal Revenue Service
form 990 with Schedule A where applicable. Donors may want to consider
an organizations accountability to AIP when making giving
Omission of charities from the Charity Rating Guide
or this web site does not imply a negative evaluation or rating.
Some groups receive large amounts of donated goods
and services. These items can be difficult to value and distort
the calculation of how efficiently a charity is spending your dollars.
Donated items are generally excluded from AIPs calculation
of the following ratios:
PERCENT SPENT ON CHARITABLE
This is the portion of total expenses that is spent on charitable
programs. In AIPs view, 60% or greater is reasonable for most
charities. The remaining percentage is spent on fundraising and
When a range of numbers is given, the higher number,
in most cases, reflects the charitys own decision on how much
is spent on charitable program expenses. The mailings and phone
calls of these groups may serve a dual purpose: raising funds and
educating donors. However many of these groups consider such mailings
and phone calls to be largely educational and their costs to be
primarily program expenses. In some cases AIP adjusts the higher
number. For example, AIP may differ with a groups decision
that the cost of acquiring new donors or members is a program service.
Fundraising costs, i.e., direct mail and telemarketing, are often
factored in as program expenses. If you agree that fundraising activities
serve as a bona-fide educational or program purpose, you may decide
that this higher number reflects your goals.
The lower AIP number assumes that all direct mail
telemarketing and solicitation costs are separate fund-raising
expenses and should not be included with direct program service
costs. If you do not consider any portion of a charitys direct
mail and telemarketing solicitations to be a bona-fide program or
if you are a new contributor and do not want to fund solicitation
campaigns, the lower number reflects your goals. (The AIP letter
grade ratings are based on this assumption.) Please note, however,
that the work done by certain types of nonprofit organizations may
warrant a greater allocation of direct mail and telemarketing costs
to program expenses. Please see Exception
for Social Welfare Groups below for more details.
COST TO RAISE $100
This dollar amount reflects how much is spent to raise each
$100 of funds collected. In AIPs view, $35 or less to raise
$100 is reasonable for most charities. When a range is given, the
lower amount usually reflects the charitys own decision on
how much direct mail and telemarketing costs are bona-fide fundraising
expenses. In some cases, AIP adjusts the lower number to reflect
its different view on whether an item is a fundraising expense.
The higher AIP number assumes that all (please see Exceptions
for Social Welfare Groups below) direct mail and telemarketing
solicitation costs are fund-raising expenses.
AIP helps you to judge the fundraising efficiency
of a charity by comparing fund-raising expense with related contributions,
i.e., money that was brought in as a result of fundraising activities;
whereas many charities compare (by pie charts or ratios) their cost
to raise money with total income, which can include patient revenue,
investment income, sales proceeds and other items that are not affected
by fundraising outlays. This erroneous comparison often makes a
charitys fundraising efficiency appear better than it actually
is. The following comparison illustrates this point:
$1,000,000 total income
Using this formula, a charity can claim that only
10% of its total income was spent on fundraising. This percentage
may look great in a charitys promotional material but it is
not a meaningful measurement of fund-raising efficiency.
$200,000 related contributions
Using this formula, one can see that Charity X has
a fund-raising efficiency of 50% or that it costs the charity $50
to raise $100. This ratio is useful because it tells donors how
much a charity is spending to obtain your contribution and how much
is left to spend on charitable programs and general administration.
FOR SOCIAL WELFARE GROUPS
The mailings and phone calls of social welfare groups that
are not eligible to receive tax-deductible contributions, identified
by the nt designation in the Charity
Rating Guide, may serve a dual purpose: raising funds and
recruiting/educating members to write their congressman or make
other attempts to influence legislation. AIP counts up to 30% of
the cost of such mailings and phone calls as program expenses in
its lower number for % Spent on Charitable Purpose,
its higher number for cost to raise $100 and its overall
grade. Please note however, that many of these groups consider such
mailings and phone calls to be largely educational and allocate
over 30% of these costs to program expenses. These accounting differences
may cause lower overall grades for some social welfare organizations.
YEARS OF AVAILABLE ASSETS
This column shows how long a charity with large reserves
of available assets could continue to operate at current levels
without any additional fundraising. In AIPs view, a reserve
of less than three years is reasonable and does not affect a groups
grade. When years of available assets are 3 years or more, they
are shown in a separate chart.
The letter grades for most charities are based on %
Spent On Charitable Purpose and Cost to Raise $100,
and assumes that direct mail and telemarketing solicitations are
fund-raising costs. (Please see Exception
for Social Welfare Groups above.) When a charitys
years of available assets are three years or more, their grade is
reduced and reported in a separate chart.
Groups with years of available assets
of more than five years are the least needy in AIPs
view, and receive an F grade regardless of other measurements.
(Please see Charities with Large Asset Reserves
AIP encourages each donor to consider these factors
and others, which you may feel are more significant, when making
charitable giving decisions. AIP provides this information to help
you make your own decision concerning which charity to support.
The letter grades represent the opinion of AIP.
A charitys rating is based solely on the above
criteria. The grades are:
| A = Excellent
|| B = Good
| C = Satisfactory
|| D = Unsatisfactory
| F = Poor
|| ? = Insufficient Information
When information is given only on the national headquarters
and the charity does not include its affiliates in its financial
statements, National Office or N.O. appears
after the groups name.
WITH LARGE ASSET RESERVES
AIP strongly believes that your dollars are most urgently
needed by charities that do not have large reserves of available
assets. AIP therefore reduces the grade of any group that
has available assets equal to three to five years of operating expenses.
In AIPs view, a reserve of less than three years is reasonable
and does not affect a groups grade.
These reductions in grades are based solely
on the charities asset reserves as compared to budget. If
you agree with these charities that reserves greater than three
years budget are necessary to enhance their long-term stability,
you may wish to disregard the lower grades that AIP assigns on the
basis of high assets.
AIPs definition of years of available
assets includes funds currently available for the charitys
use, including investments that the charity has set aside as a reserve
but could choose to spend if it wanted to do so.
CHARITIES, UNITED WAY, VOLUNTEERS OF AMERICA AND UNITED JEWISH COMMUNITIES
These groups are composed of hundreds of local organizations.
Each of these is governed by local volunteers and primarily raises
and spends money in their own community. AIPs Charity
Rating Guide currently focuses on national organizations.
HOW TO LEARN MORE
After selecting your favorite charities, you can call or
write to them for a description of their mission, program activities
and recent accomplishments. (Phone numbers are provided in the Charity
Rating Guide and addresses can be found on the Internet
or in the reference sections of most public libraries.) Insist that
the descriptions of program activities be clear and quantifiable
(for example, How many hungry were fed? or How much land was protected?)
and coincide with the time period and categories of the financial
WORDS OF CAUTION
Charity financial reporting is inconsistent, unclear and
often incorrect. To form a basis of comparison, adjustments have
been made to the financial reports of some of the organizations
in this guide. For example, if a charity does a lot of direct mail
soliciting but includes only a small portion of its total postage
and printing in fund-raising expenses, then AIPs rating will
reflect a larger share of these items in fundraising.
TOP 25 COMPENSATION
The salary information was calculated by adding
the IRS Form 990 categories of Compensation, Contributions
to employee benefit plans, and Expense accounts and
other allowances. Not included are any benefits received but
not reported in the charitys IRS Form 990.
A range of numbers indicates the range of a charitys
top three salaries. A single number indicates the organizations
A ? symbol indicates that AIP does not
have complete compensation information on the charity.
A N/A symbol indicates that the organization
is a social welfare, church-related, veterans, or other type of
organization that is exempt by the government from providing more
complete information on salaries.
When information is given only on the national headquarters and
the charity does not include its affiliates in its financial statements,
National Office or N.O. appears after the
NOTE: AIP grades are not based on the salary
ranges reported in the IRS form 990. DUE TO DIFFERENCES IN THE WAY
SALARIES MIGHT BE ALLOCATED, HIGH SALARIES DO NOT NECESSARILY INDICATE
INEFFICIENCIES JUST AS LOW SALARIES ARE NOT ALWAYS A PLUS.
Elan Steinberg, Senior Staff Person
World Jewish Congress (American Section)
|Includes $1 million
in contributions to employee benefit plans and deferred
|Donald E. Thomas,
||American Cancer Society
|Gloria A. Feldt,
||Planned Parenthood Federation of
Roy Williams, Chief Scout Executive
Boy Scouts of America - N.O.
Michael A. Friedman, M.D., President/CEO
|City of Hope
Wayne Lapierre, Executive VP
National Rifle Association
||Boys & Girls Clubs of America
|James Maddy, Past
|Barbara M. Silverstone,
of unpaid vested benefits.
William D. Novelli, Secretary & Executive Director
|AARP Foundation & AARP, respectively
|Salary paid by AARP
for Executive Director. No salary paid by AARP Foundation for
|Brian A. Gallagher,
||United Way of America
|Steven E. Sanderson,
||Wildlife Conservation Society
||National Jewish Medical & Research
|Edwin J. Feulner, Jr., President/CEO
|Robert J. Beall, President/CEO
||Cystic Fibrosis Foundation
|Richard A. Murphy,
||Salk Institute for Biological Studies
|Mitchell S. Rosenthal,
||Phoenix House Foundation/ Development
Myra Biblowit, President
| Breast Cancer Research Foundation
|W. Franklin Graham III,
|Larry E. Kun,
M.D., Chair Radiation Oncology
||St. Jude Children's Research Hospital
||Girl Scouts of the USA - N.O.
|Christopher C. DeMuth, President/
||American Enterprise Institute for
Public Policy Research
|Howard M. Reiger,
|Peter Van Etten, President/CEO
|| Juvenile Diabetes Research Foundation
* Includes “Compensation,” “Contributions to
employee benefit plans,” “Expense accounts and other allowances”
and deferred compensation paid in reporting year, as reported to
the IRS. Compensation of medical professionals may include fees
for patient care in addition to salary.