How The Chronicle Compiled Its Annual Philanthropy 400 Rankings

The 14th 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 ended in 2003, or in 2004 for organizations with fiscal years ending in January, February, or March.

Cash and donations of art, stock, real estate, and other noncash gifts are included in the private-support total, which is used to determine an organization’s rank. Data from the 2002 fiscal year were used for 20 organizations that did not have complete information for the 2003 fiscal year. Four organizations that file their financial information in January, February, or March were unable to provide information for the 2004 fiscal year, so data for 2003 were used.

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

Some groups that have affiliates provided data from their consolidated audited financial statements. Data were also gathered from annual reports and from a Chronicle survey form that is based on the Form 990.

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, in Washington, ranked as the 11th largest charity this year. The group could not participate last year, citing limited staff and time, and therefore had no 2003 ranking. But according to the numbers the organization provided this year for 2002, Catholic Charities would have ranked 10th on last year’s survey, had it been able to participate.

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 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 educational institutions. 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 the 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, however, directs colleges to count only money that is actually in hand at the end of the institution’s fiscal year.

Six institutions listed in the Philanthropy 400 did not participate in the council’s survey, but are included in the Philanthropy 400 based on their Forms 990 or information provided on the Chronicle survey form: Fordham University (No. 390), Franklin W. Olin College of Engineering (No. 38), Moody Bible Institute (No. 297), Oklahoma City University (No. 388), Oregon Health & Science University (No. 140), and Yeshiva University (No. 355).

In accord with a 2001 ruling by the Internal Revenue Service, The Chronicle includes money that donors have earmarked for specific causes in the private-support, total-income, program-service, and total-expense figures.

Special circumstances affected three organizations in the survey:

• Doctors Without Borders USA (Médecins Sans Frontières USA), No. 246 on the list, reported figures only for its American 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 $368.1-million.
• American Friends of Bar-Ilan University (No. 88), in New York, did not provide The Chronicle with a private-support total, so the charity’s figure may include international donations.
• In past years, the figures for Scripps Research Institute (No. 204), in La Jolla, Calif., and Scripps Health, in San Diego, were combined to create the Scripps Foundation for Medicine and Science, ranked No. 251 in last year’s survey. Because the two organizations no longer have a formal relationship, they are listed separately this year. Scripps Health, with nearly $22-million in private support in 2003, did not qualify for this year’s list.

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

The figures in the Philanthropy 400 tables are best used to compare an organization’s ability to raise money from year to year. Using those figures to compare one 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 by Leah Kerkman and Cassie J. Moore, with assistance from Jon Aikman.