Doing the Numbers: How the Philanthropy 400 Survey Was Compiled

The 12th annual Philanthropy 400 uses financial data gathered from nonprofit organizations to

determine which charities raised the most from individuals, foundations, and corporations during the fiscal year that ends in 2002, or in 2003 for organizations with fiscal years ending in January, February, or March.

Cash and in-kind gifts are included in the private-support total, which is used to determine an organization’s rank. Data from fiscal 2001 were used for 15 organizations that did not have complete information for fiscal 2002. Five organizations that file their financial information in January, February, or March were unable to provide information for fiscal 2003, so data for fiscal 2002 were used. One organization, Ducks Unlimited, could not provide data for fiscal 2003 because of a change in its fiscal year, so it gave data for the fiscal year ending February 28, 2002.

Religious Groups

Unlike secular charities, religious organizations are not required to make their finances public. Some religious groups are included in the Philanthropy 400, however, because they provided data to The Chronicle.

Catholic Charities USA, a religious organization in Washington, said it was unable to provide The Chronicle with either fiscal 2001 or 2002 figures for this year’s survey.

Catholic Charities has ranked in the top 20 over the past six years. The organization cited limited staff and time as the reason for declining to participate in this year’s Philanthropy 400 survey.

Tax Forms

For most of the information in the survey, The Chronicle relied on figures from charities’ Form 990 informational tax returns.

Some groups that have affiliates provided data from their consolidated audited financial statement. Information from annual reports and from a Chronicle survey form that is based on the Form 990 also was used.

Government Aid Not Counted

The Philanthropy 400 rankings show how successful charities are at attracting private support. The rankings do not take into account money provided by government or as fees that charities charge for their services. As a result, nonprofit organizations with big budgets but relatively little in donations from individuals, corporations, or foundations may not be on the list.

Nonprofit organizations report their financial information in various ways.

Many follow rules issued by the Financial Accounting Standards Board that are designed to standardize financial reporting. However, those rules are not necessarily consistent with the ones governing the Form 990.

The Chronicle adjusts some organizations’ data to make them consistent with information provided by other groups from their Forms 990.

Contribution figures for most colleges and universities come from an annual survey conducted by the Council for Aid to Education, a nonprofit organization in New York that monitors charitable giving to institutions of higher education and private elementary and secondary schools in the United States.

The Chronicle uses those data because public colleges and universities are not required to fill out the Form 990, and getting an accurate comparison of public and private institutions can be difficult.

One difference between the council’s data and the information reported on the Form 990 involves counting of pledges.

Under accounting standards used by most nonprofit organizations to fill out the Form 990, groups are supposed to count pledges as revenue that has been received. The Council for Aid to Education, however, directs colleges and universities to count only money that is actually in hand at the end of the institution’s fiscal year.

Colleges Added

Five colleges and universities did not participate in the council’s survey, but the institutions are included in the Philanthropy 400 based on their Forms 990 or information provided on the Chronicle survey form: Franklin W. Olin College of Engineering (No. 227), Hillsdale College (No. 379), Howard University (No. 389), Jewish Theological Seminary of America (No. 361), and Yeshiva University (No. 246).

IRS Ruling

For the past two years, The Chronicle has included money that donors have earmarked for specific causes in the private-support, total-income, program-service, and total-expense figures.

The change stems from a private-letter ruling released in May 2001 by the Internal Revenue Service.

For many years the service and the Financial Accounting Standards Board stated that donor-designated gifts should not be counted as income or expenses.

Special circumstances affected two organizations on the survey:

• Doctors Without Borders USA (Médecins Sans Frontières USA), No. 292 on the list, reported figures only for its U.S. office, but not any other affiliates. If figures for affiliates in 18 countries and the international office in Brussels had been included, the group’s private-support total would have been an estimated $340-million.
• United Cerebral Palsy Associations (No. 303) estimated its private-support figures. The figures were estimated based on the total operating expenses for the main office and all affiliates.

The Philanthropy 400 provides information on fund-raising costs and other expenditures by nonprofit organizations.

The figures included in the Philanthropy 400 tables are best used to compare a nonprofit organization’s ability to raise charitable donations from year to year. Using those figures to compare one charitable organization with another could be misleading if done without knowing more about the organizations, such as their age, programs, management, and accounting methods.

The Philanthropy 400 was conducted under the direction of Marni D. Larose, with assistance from Stanley W. Krauze.