How the Philanthropy 400 Was Compiled

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 1996. If that data was not available, information from the previous fiscal year was used.

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 organizations with big budgets — but relatively little in donations from individuals, foundations, or corporations — may not have made the list.

The policies non-profit groups use to count donations vary widely. For example, many organizations now use new guidelines established by the Financial Accounting Standards Board, but others do not.

Furthermore, some differences in figures reflect differences in an organization’s mission. Most gifts to community foundations, for example, are for endowments, so the money is invested and only the interest goes to charity. Therefore, the ratio of money spent on program services often looks small compared with other types of non-profit groups.

Although the Philanthropy 400 provides information on fund-raising costs and other charity expenditures, the use of those figures to compare charities’ efficiency could be misleading since some organizations — because of the nature of their missions — use more donated goods and services than others and therefore spend less on fund raising.

The fund-raising figures are of more use in comparing a charity’s efficiency from year to year.In one case this year, a charity was not included on the list because of a change in The Chronicle’s policy. The United Jewish Appeal is no longer ranked, because it receives its money almost exclusively from local Jewish federations and therefore contributions would have been counted twice.

Private-support figures for most colleges and universities came from the Council for Aid to Education, an organization that tracks charitable giving. The council’s figures are more reliable than those on the Form 990 because all colleges do not report gifts in the same manner.

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

Financial information for some religious organizations came from the Evangelical Council for Financial Accountability, a watchdog group. Churches, synagogues, and other places of worship — as well as their affiliated institutions — are not required to file a Form 990.

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 Marilyn Dickey and Dan Morris, with assistance from Susan Gray and Holly Hall. Paul Demko, Marina Dundjerski, C. Quinn Hanchette, Domenica Marchetti, and Vince Stehle also contributed.