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Monday, July 11, 2016

Charities with National Offices and Chapters: How Are They Rated?

Users of our site often ask us, "is the rating provided for a charity located in one state applicable to the charity's operations in other states?" And our answer is "it depends on how the charity files its financial information with the IRS."
For example, we evaluate the American Red Cross based on its Form 990 which includes data from all of its US chapters. Therefore, our evaluation reflects the financial health of this charity's entire operations including its national office and all of its chapters.
Some well-known charities, like the American Lung Association, are actually legally considered a group of separately incorporated organizations. Each of those organizations files a separate Form 990, and we evaluate each of them separately, rather than evaluating them as if they were a single organization. 

In some cases, we've been able to work with the charity's leadership to obtain consolidated data in order to provide our users with a single rating that shows the financial health of the entire organization. One example of a consolidated rating is Susan G. Komen for the Cure. As noted at the bottom of that organization's rating page, our analysis includes a review of both the national organization (EIN# 75-1835298) and its chapters (EIN# 75-2462834). 

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