Which leads to our annual caution: Don’t compare efficiency ratios for different kinds of charities. Therein lies the value of the Forbes list in helping to evaluate similar charities not on the list. We also avoid nonprofits with very few direct donors (such as virtually every private foundation) and charities that receive most of their donations indirectly from federated campaigns, community chests and such vehicles.įor each of the 100 charities on our list, we calculate three financial efficiency ratios, also indicating the direction of change from the prior year if available. Among them: purely academic institutions (which tend to concentrate on their own alumni), donor-advised funds often run by some of the big financial companies (which are not operating charities but a holding vehicle for money that will eventually go to an operating charity), and the many religious entities that aren’t required to make public their financial information (an obvious exclusion). Since our list trends toward charities that appeal to the general public, we don’t evaluate certain categories of nonprofits. Everything else coming in is included in other revenue, and the three categories summed as total revenue. For each charity we list separately private support and government support. So we don’t count as a private donation membership dues, reasoning that the donor/member is receiving a thing of value, like reduced admission fees for a museum. To be counted by us, a contribution must be based on pure charitable intent, with the donor getting back nothing beyond the satisfaction of supporting a favored cause.
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