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Comparing Non Profit Organizations with their Mission


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#1 admin

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Posted 28 December 2012 - 07:29 PM

Comparing Non Profit Organizations

Comparing non profit organizations engaged in research will give you an idea of how they spend the donated funds. Yes, they spend funds on other services according to what the mission statement says they want to accomplish. But every one of the six non profit organizations listed in this Post #1 state in their mission statement that they sponsor research. If you carefully note, of the six non profit organizations listed below the Breast Cancer Research Foundation spends the most on research, while the Dana-Farber Cancer Institute comes in second. The four other non profit organizations spend very little on research and spend most of the donated funds on salaries or private contractors. The six examples listed here in POST #1 only show two organizations who spend a significant percentage of donated funds on research (The Breast Cancer Research Foundation and Dana-Farber Cancer Institute). If you scroll past this first post you will also learn about the difference how a 501 c 3 non profit organization differs from a 501 c 6 non profit. Big difference. 

 

National Rosacea Society
Total Revenue for 2007: $824,986
Total Program Expenses (Form 990, Part III): $706,007, of which $100,000 spent on rosacea research 
Compensation to Officers: 0
Salaries: 0

Private Contractors: $529,964

2007 Form 990 includes three contractors included in the Compensation of the 5 Highest Paid for Professional Services:

$420,540 to Glendale, $109,424 to Park, and $65,272 to DG Printing. DG Printing does not appear to be in any way connected to any of the board members of the NRS.

For every dollar donated to the NRS 12 cents in spent on rosacea research, making the NRS the leader in rosacea research non profit organizations. 

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Inflammatory Skin Disease Institute
Total Revenue for 2006: $137,642
Total Program Expenses (Form 990, Part III): $53,495, of which none was spent on rosacea research, but there is a report of two cash grants totaling $500 to two individual scholarships. 
Compensation to Officers: $50,000
Salaries: $9,952

If you consider $500 for two scholarships that is the only money spent on research. It would be fair to say that this organization doesn't spend much on research at all.

 

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The Skin Cancer Foundation
Total Revenue for 2006: $3,332,382
Total Program Expenses (Form 990, Part III):$1,820,560, of which $145,053 was spent on grants for skin cancer research and programs (Statement 4)

Compensation to officers: $693,520
Salaries: $733,118

For every dollar donated to the SCF 4 cents was spent on skin cancer research.
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The Breast Cancer Research Foundation
Total Revenue for 2007: $42.2 Million
Total Prgram Expenses (Form 990, Part III): $35.2 Million, of which all of this was for grants and allocations

Compensation to officers: $219,364
Salaries: $1.1 Million

For every dollar donated to the TBCRF 81 cents was spent on breast cancer research. This organization was rated A+ by the AIP. Check the details for yourself by clicking here
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Dana-Farber Cancer Institute
Total Revenue for 2005: $698,288,159
Total Program Expenses (Form 990, Part III): $532 million, of which $268 million was spent on cancer research 
Compensation to Officers: $6.3 million
Salaries: $188.9 million

For every dollar donated to Dana-Faber Cancer Institute 38 cents is spent on cancer research. 
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The American Cancer Society (Group) 
Total Revenue for 2005: $971,279,823
Total Program Expenses (Form 990, Part III): $389 million, of which $7.9 million was spent on cancer research 
Compensation to Officers: 0
Salaries: $263.3 million

For every dollar donated to the ACS Group 0.8 cents (that is less than a penny!) is spent on cancer research. Carefully look at how much this non profit organization received in donations, which is almost a billion dollars. Less than a penny per dollar donated is spent on research. 
______________________________________________________________



#2 admin

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Posted 17 July 2014 - 06:31 AM

Thought I would add comparing how Wikipedia spends its donated funds compared to other non profit organizations. 

 

Check out the Form 990 for the Wikimedia Foundation, Inc. for 2012 and note how much was donated to this 501 c 3 non profit organization: 

 

Total Donations $45 Million 

 

Total percentage donated from the public 95.3%. 

 

Total spent on salaries and compensations: $17.4 Million 

Total spent on private contractors: $1.5 Million

Other Expenses: $16.2

Total Expenses $35.1 Million

 

So while a little more than half of the money was spent on people in the Wikimedia organization and private contractors, the other half of the money spent was on making Wikipedia the site that it is and you know how cool Wikipedia is and what it does. So for $45 million dollars, you can see how this non profit spends the public donations. Less than 5% of donations are from corporate sponsors. 

 

Now compare that with the NRS Form 990 2012 with these figures: 

 

Total Donations Received: $738,289

Total percentage donated from the public 30.69%

 

Total Spent on Private Contractors owned by the Director of the NRS: $427,863 (58% of the total donations)

Total Spent on Rosacea Research: $100,000 (13.5% of the total donations)

 

Almost 70% of the donations to the NRS came from corporate sponsors, mainly pharmaceutical companies. 



#3 Mister_Twiggy

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Posted 22 July 2014 - 03:21 AM

Hi Brady, thanks for digging in! This was very eye opening. I was very annoyed with this statement and I called the NRS for some answers.

 

After 2 days, the Director of the NRS gave me a call back. I asked him why so little goes to research and he said that almost all of the money from individual contributions goes to research (his numbers were ~$110,000 from individual contributors and ~$100,000 given to research). However, he stated that the rest of the money from corporate sponsors had "strings attached" and that it couldn't go to research, only promotions, pamphlets, etc. This obviously isn't ideal, but it's corporate money and they can spend it how they please.

 

I took him at his word, but let me know if there is something else I should have countered his argument with. Overall, I'm still pro-NRS for the moment.



#4 admin

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Posted 26 July 2014 - 05:36 PM

Mister Twiggy, 

 

Most people obviously do feel the way you do, that the NRS is doing a great job with its spending for the past fifteen years which is how long I have records on the spending. 

 

I question whether the public support donation percentage is actually what is reported. I sent a letter to the IRS asking them to investigate. It may be that the NRS doesn't actually qualify as a 501 c 3 but instead should be a 501 c 6 since the vast majority of its donations come from corporate sponsors, i.e., pharmaceutical.  Donations to a 501 c 3 are tax deductible so all the pharmaceutical companies that donate to the NRS can write off the donation.  Donations to a 501 c 6 are not tax deductible, which is the major the difference. However, an organization designated a 501 c 6 is not required to pay taxes to the IRS

 

The most famous 501 c 6 is the National Football League. 

 

501 c 3 must indicate on Form 990 the percentage of public support to continue to qualify. A 501 c 6 does not need to do this since they are totally sponsored by corporations, or private interest.  

 

So, in 2012 the NRS claims on its Form 990 that they received in total donations $738,289 and that 30.69% came from public support. You do the math. And you still think the NRS is doing a good job spending its donations?  I am confident the pharmaceutical companies approve of how the NRS spends it donations. 

 

Only $100,000 was spent on research which is 13.5% of the total donations. 

 

I question if the NRS is reporting the public support percentage correctly and that is why I asked the IRS to investigate. By the way, my question for Mr. Huff would have been, "Then why was only $100K spent on research when you report that $226,580 came from public support?"



#5 admin

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Posted 27 July 2014 - 04:30 AM

Since I am on a roll with this I thought it would be good to compare the American Acne and Rosacea Society, which is a 501 c 6 non profit organization.  Donations to a 501 c 6 are not tax deductible. However any organization that is designated a 501 c 6 does not pay any taxes to the IRS

 

In 2012 this non profit received $450K in donations from private corporations. The mission of this non profit is similar to the NRS.  What did they spend the donations on?

 

Nearly $324K went to "conferences, conventions and meetings."

 

$47K was spent on "management."   $41,775 was spent on 'grants'  which is the only research noted on the form. 

 

Their web site cost them $6,849 (I am really into web site costs) and find this one of the more interesting expenditures. The rest was on other expenses. 

 

Form 990 reveals that of the total donations received that the AARS spent 9% of the total on research grants without naming on the form who received the money. 

 

You can click here and read the Form 990 yourself



#6 admin

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Posted 27 July 2014 - 04:43 AM

Thought it would be good to compare the most famous 501 c 6 non profit organization, the National Football League, and see how they spend their donations. This will give you an idea of how an organization can avoid paying taxes if they can acquire a 501 c 6 status from the IRS.  

 

In 2012, the Form 990 the NFL reports to the IRS shows that they received in donations and membership dues $326 Million Dollars.

 

What did the NFL spend its money on?

 

$100 Million went to compensation to officers, salaries to employees, benefits, payroll taxes, etc.

 

$73 Million on 'club related financing'

 

$49 Million on Interest 

 

$22 Million was spent on legal fees, accounting and lobbying

 

$15 Million on Event Production 

 

$7.8 Million on 'other'

 

$2.1 Million on Information Technology

 

$6.7 Million on 'Occupancy'

 

$12 Million on Travel

 

$7.4 Million on Depreciation 

 

$2.1 Million on Insurance 

 

I think you get the idea. 

 

A 501 c 6 non profit does not pay a dime in taxes.  Not one cent. Just like the AARS.  A 501 c 6.  

 

Did they do any grants?  Yes, indeed: 

 

$1.4 Million went to grants. You can read the Form 990 to find out what those grants are if you would care to. 

 

The NFL spent less than one per cent of the donations on grants, which means they did something nice for someone. 

 

You probably weren't aware about this were you?  

 

Can you understand now why if you donate to a 501 c 6 that your donation is not tax deductible?  

 

Your donation is only tax deductible if the non profit is a 501 c 3. 

 

Can you see why the AARS is designated a 501 c 6 instead of a 501 c 3?

 

Can you now see why it is possible that the NRS might not qualify as a 501 c 3 if it cannot show that it receives enough public support to qualify? It is possible that the NRS may have to change to a 501 c 6 instead if there is not enough public support in donations. Private corporate donation seems to be what really constitutes the majority of the donations to the NRS. 

 

For example, in 1998 the NRS received in donations over $1.1 Million and spent only $16K on rosacea research which is only 1.6 % of its donations. In 1998 the NRS claimed that it received 2.15% ($24,690) from public support. You can see a graph of all this by clicking here and is the main reason I formed the RRDi.  I think there is a better way to run a 501 c 3 non profit for rosacea that will spend most of its donations on the mission rather than on private contractors or salaries. 



#7 Mister_Twiggy

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Posted 03 August 2014 - 05:27 PM

Hmm, interesting point. I wish I had the numbers to back it up, I just took him at his word. I agree that they should be more open with how much they actually give to research versus other costs.