Charities That Rely on Food, Medicine, and Other Noncash Gifts Grew Fastest

The runaway winners over the first 20 years of the Philanthropy 400, The Chronicle’s ranking of the largest U.S. charities by private donations raised, are primarily charities that receive substantial amounts of donated goods—such as food, clothing, and medical drugs and equipment.

Food for the Poor (up more than 2,900 percent since its first appearance on the list in 1991), AmeriCares Foundation (up more than 1,200 percent), United States Fund for Unicef (up more than 950 percent) and Goodwill Industries International (up nearly 800 percent) all receive most of their private support through donated goods, and all four achieved big growth over the two decades.

Some fund-raising experts point out, however, that raising cash from individuals can be more difficult than negotiating a product donation from a company.

Robert F. Sharpe Jr., a fund-raising consultant in Memphis, notes that many of the groups on the Philanthropy 400 receive half or more of their support in products and other noncash gifts.

“I have to mentally go through and discard a lot of them as groups that are not broadly supported by the public,” Mr. Sharpe says.

Daniel Borochoff, president of the American Institute of Philanthropy, a watchdog group in Chicago, says charities often pin irrationally high valuations on the products they receive, to improve their standing in the Philanthropy 400 and in ratings of charity efficiency.

“It’s Alice in Wonderland,” he says. “These groups come up with any kind of valuation they want and their accountants back them up on it. People ought to be aware that there’s a lot of variability in how these in-kind goods can be reported.”

The top percentage gainers on the Philanthropy 400 that report receiving the majority of their gifts in cash are Habitat for Humanity International (up more than 1,800 percent over 20 years), Special Olympics (up more than 700 percent), Alzheimer’s Association (up more than 600 percent), and Scholarship America (up more than 500 percent).

Need for Money

While many charities rank high on the Philanthropy 400 because of product donations, their executives say they also need large cash donations to support efforts to distribute food, medical aid, and clothing.

AmeriCares, in Stamford, Conn., which distributes medical products and provides disaster relief around the world, received cash donations of $37.5-million in 2010, up from $5.5-million in 1991. Medical supplies and other donations from corporations like Pfizer and Becton, Dickinson and Company grew to $756-million in 2010, from $69.8-million in 1991. The charity, which was founded in 1982, had the greatest growth in raw dollars from 1991 to 2010 of any Philanthropy 400 organization.

Curt Welling, the charity’s president, says he thinks the strong growth can continue, predicting that companies will triple the amount of medical products that they donate to groups like his in the next decade. That will put even more pressure on AmeriCares to raise cash, to help move the products to people in developing countries.

“As cash donors have become more outcome-oriented, we have a great story,” Mr. Welling says. “We can document to someone that if they give us $1, we can put it toward $30 or $40 of impact in the field.”

Food for the Poor, a charity in Coconut Creek, Fla., that provides food, medicine, and other assistance in the Caribbean and Latin America, grew faster percentage-wise than any other group over the 20 years, lifting private support from $21.5-million to $1.04-billion, a jump of 2,944 percent.

Angel Aloma, the charity’s executive director, says his group has grown in part by developing strong internal capabilities for nearly everything related to fund raising—including staffing its own phone center, and hiring graphic designers, writers, and photographers. The growth came despite a sex and financial scandal in 2000 that led to the resignation of Ferdinand Mahfood, the charity’s founder and president at the time.

Mr. Aloma expects to garner cash gifts in 2010 of more than $100-million for the first time, and the charity hopes to reach new donors through its first television advertisements this year.

“We’re still not a household name,” Mr. Aloma says.

Chris Thompson contributed to this article.