Showing posts with label Form 990. Show all posts
Showing posts with label Form 990. Show all posts

Monday, June 4, 2012

Charities Return to Our Site

At Charity Navigator we utilize the data found in the Form 990 to rate charities. However, not every charity is required to fill out the standard Form 990 (and others aren’t required to fill out any Form 990).  Small charities are permitted to file a less detailed version of the report which is called the Form 990 EZ. This document lacks much of the data we use in our analysis of charities, so we are not able to rate charities that file the Form 990 EZ

A few years ago, the IRS changed the size threshold for filing the standard Form 990. A few of the charities on our site were allowed to file the Form 990 EZ. At that point, we lacked the necessary data to evaluate those charities. Since then, some of those charities went back to filing the standard Form 990. As such, we have begun to add them back to our site. Charities we’ve added back include:
Please note when reviewing the historical data of these charities you may see a skipped evaluation year. Of course, that corresponds to the year that the charity filed the Form 990 EZ. 

Wednesday, April 28, 2010

Nonprofit To Do List - File Form 990

Starting next month, nonprofits that have failed to file their Form 990, Form 990-EZ, Form 990-N or Form 990-PF for the last three consecutive years will lose their exempt status. Once the IRS revokes a nonprofit's exempt status under this rule, then the only way for that group to have its exempt status reinstated it is to go through the application process all over again.

And as the IRS points out online, losing nonprofit status has significant consequences. First, the organization will have to file income tax returns and pay income tax. Second, and most importantly for its supporters, donations to the group will no longer be deductible.

Wednesday, July 29, 2009

CN Site Visitors Respond!

Wow!--we would like to thank the 225+ Charity Navigator site visitors who have thus far responded so generously to our asking our users to help support our services. We are most grateful for your willingness to step up to the plate to help. If everyone who pays us a visit contributed just $1, we could easily and comfortably meet our annual budget. But, of course, not everyone does--so, to those of you who have so graciously made a contribution, we cannot thank you enough. Want to help but haven't as yet? Click here.

On another note, and in the interest of total transparency, Charity Navigator's latest IRS Form 990 filing (and filings from the two prior years) as well as our audited financial statements are available on the site. You can link to them here. For future reference, they can be accessed by clicking on the About Us tab at the top of the home page and scrolling down to the Financials link in the left column.

Friday, January 23, 2009

Free 990s on Our Site

Have you been inspired by a charity's mission and wanted to support its efforts only to find out that it isn't rated by Charity Navigator?
Although we evaluate, for free, ten times more organizations than anyone else in America has ever attempted, many deserving (and not deserving) ones exist that we haven't gotten to yet. To help remedy this situation, we turned to our friends at The Foundation Center. Thanks to our new collaboration with them you can now quickly access Forms 990 (the information tax returns that we use to evaluate charities) for the charities that we do not currently rate. Not only is this online tool free, but The Foundation Center’s database often provides significantly more than three years worth of 990s for each charity.

In conjunction with this new resource, we offer our guidance for interpreting the data. We hope you’ll also find our tips and the 990 finder helpful in conducting your own due diligence. The Texas Attorney General’s charity division found it so useful that they republished our tips on their new site.

Thursday, August 7, 2008

CEO Compensation - Donor Frustration

For 4 years now we have been putting out our CEO compensation study . Reporters are asking us, "What's new with this year's study? Are there any surprises?" My answer to them is as follows:

"The results of the study are not that different than the year before, however there is something new that is enlightening. 9 months ago we added a new feature to our site, the ability for donors to make comments about charities they are considering donating to. Without question, the most common donor comment we are seeing goes something like this:

I can't believe how much money the CEO of this charity is making! I have been donating to them for years. However, I will NEVER do so again!"

We agree that, in some cases, salaries are way out of line. For example, the CEO of Johns Hopkins University is making over $1.5 million. That is NOT what we would consider to be reasonable for public charities!

However, the fact that the average CEO salary in the US is around $149,000 does not seem unreasonable to us. As we note in this year's study:

"To the skeptics, we ask that you keep in mind that the charities included in this study are multi-million dollar operations. Leading one of them requires an individual that possesses both an understanding of the issues that are unique to the charity's mission as well as business and management expertise similar to that required of for-profit CEOs. Attracting and retaining that type of talent requires a certain level of compensation."
What kind of expertise are we talking about here? The skills needed include financial management, fundraising, public relations, human resources, program operations, strategic planning, board relations and administration, among many other talents.

Nonetheless, many of the donors who make comments on our site do not agree. I believe that the reason in part relates to a very straightforward logic - I am donating to a CHARITY, therefore the leadership should be receiving only a small amount of compensation. In other words, it is assumed by some, that leaders of charities must sacrifice and have a "charity" level income or even take a "vow of poverty" to take the job. In theory, this would be great, but in reality it does not work that way. Furthermore, I believe that most CEOs of charities ARE making a very real sacrifice. We note in our study that CEOs of similar sized for profit operations make an average of $11 million with their stock options, etc.

So what do we think is best practice? Every charity, of the size we evaluate, should have a Board Compensation Committee that reviews the CEO salary on some periodic basis and benchmarks both the initial salary and ongoing raises according to norms within that particular category and cause of charity. Our study is one of the tools that the Board can use in this process. The CEO also has a responsibility to make sure that the Board is aware of the full financial cost of any decision they make. For example, if they give a 5% salary increase to the CEO and the agency also provides contributions to a pension plan or other deferred compensation, they need to know the cost of that as well.

The new IRS 990 has a number of questions about CEO compensation and whether an organization has a Compensation Committee. We will be adding this information to our web site down the road for returns in the future (starting some time in 2009). In the meanwhile, you as a donor are encouraged to contact the charity you are considering donating to and asking them if they have a committee in place and how they go about making these salary decisions.

That reminds me of another point that may further frustrate the donors mentioned above. Be aware that our information only captures certain categories of what the CEO gets; there are other benefits they may receive that are above and beyond what is reported here. For example, a CEO often receives contributions to a benefit plan or deferred compensation that could end up, over the years, totaling millions of dollars. This information is not included in the salary number on the 990 (unless the person is at or near retirement) and therefore it is in large measure not reflected in our study.* So, for some donors, the frustration they have with highly compensated CEOs may only be the tip of the iceberg. Donor beware!

*You can find the information regarding these benefiits in another area of the 990, part V column D, but that is not considered CURRENT compensation by the IRS.