How the Chronicle’s Ranking of the Biggest Fund Raisers Was Compiled

THE PHILANTHROPY 400
(Table of Contents)

The Philanthropy 400 is compiled from financial data found on charities’ informational tax returns — Internal Revenue Service Form 990 — their audited financial statements, annual reports, and responses to a Chronicle questionnaire.

Charities are ranked by how much they raised from private sources — in both cash and in-kind gifts — for the fiscal year ending in 1997. In a handful of cases, the data are for a different year.

The Philanthropy 400 rankings are intended to show how well charities do in attracting private support. They do not take into account money provided by governments. As a result, non-profit groups with big budgets — but relatively little in donations from individuals, foundations, or corporations — may not have made the list.

The policies that non-profit groups use to count donations vary widely. The Financial Accounting Standards Board, a private organization, issued rules in 1993 intended to standardize financial reporting and make sure that a charity’s books accurately reflected its position. However, not all organizations follow the rules. Some follow the rules in some financial reports, but not on their federal tax returns.

Many United Ways do not abide by at least one of the new accounting-board rules: a provision that bars groups from counting money earmarked for other charities as part of their own gift totals. At some United Ways these so-called donor-designated gifts account for the largest share of donations. Such donations are included in the United Way figures in the Philanthropy 400.

Charities also differ on whether to count as their own the contributions that are received by affiliates and other related groups. Some groups like the Salvation Army (No. 1) collect financial information from chapters around the country to come up with the overall figure. Other non-profit groups are decentralized and do not collect the aggregate information from their affiliates that might put them among the top 400.

In much the same way, some colleges and universities collect data systemwide — including multiple campuses — while others report only for a single institution.

Private-support figures for most colleges and universities came from the Council for Aid to Education, a New York organization that tracks charitable giving. Since public and private colleges do not necessarily report gifts in the same manner, the council’s information may provide data that are more comparable than individual figures from each institution.

All other financial information for colleges and universities was collected from the institutions.

The Philanthropy 400 provides information on fund-raising costs and other charity expenditures. The figures are best used to compare a charity’s efficiency from year to year in raising money and converting gifts to programs. Using those figures to compare one charity with another could be misleading if done so without knowing more about the organizations, such as their age, programs, management, and accounting methods.

For the most part, the Philanthropy 400 does not include churches, which are not required to make their finances public. The Domestic and Foreign Missionary Society of the Episcopal Church, in New York — which has appeared on the Philanthropy 400 in the past — no longer participates in the survey. A spokesman for the church said that since churches collect money from members who, he said, give as part of their faith, they should not be ranked alongside charities that solicit money.

Another institution that has appeared in the Philanthropy 400 in the past — St. Labre Indian School, in Ashland, Mont. — did not participate this year. Officials there did not respond to repeated requests for information, and because of its religious affiliation, the school does not file a Form 990.

Another organization that probably would have qualified for the list — the Jewish Community Foundation, in Los Angeles — files a Form 990, but has an extension until next month to do so. Unlike other groups that have not yet filed the document, the foundation declined to provide information.

Every effort was made to identify all charities that raise enough money to qualify for the Philanthropy 400. However, because of the size and diversity of the non-profit world, some groups may have been overlooked. Charities that should have been included should write to Philanthropy 400, The Chronicle of Philanthropy, 1255 23rd Street, N.W., Washington 20037 or send an e-mail message to editor@philanthropy.com.

The Philanthropy 400 was compiled under the direction of Debra E. Blum, with assistance from Paul Demko, Marilyn Dickey, Holly Hall, Katharine LaBruna, and Domenica Marchetti.