October 9, 2003
Jewish Charities Get Favorable Rating
If you're concerned that the money you donate to Los Angeles Jewish charities is eaten up by administrative and fundraising costs, fear not.
Most Jewish charities in Los Angeles have a favorable rating for the amount of dollars spent on their projects compared to dollars spent on costs, according to Charity Navigator, a new philanthropic watchdog. The group assessed some 130 Jewish nonprofits, including seven from Los Angeles, among 2,500 charities across the United States. It then rated the groups based on the Form 990 tax returns that all nonprofit charities, except religious institutions, must provide annually to the IRS.
Charity Navigator evaluated the groups' overall financial health, fundraising and organizational efficiency. The goal was to equip potential donors with enough detail to "make more intelligent giving decisions," spokeswoman Sandra Miniutti said.
Independent analysis of charities and philanthropies remains relatively rare, so many in the Jewish philanthropic world welcome the extra focus.
Such data "should serve as a reminder to donors that it is not enough to find a cause that tugs at your heart strings," said Mark Charendoff, president of the Jewish Funders Network. "We have to hold charities we care about to higher standards of efficiency, effectiveness and transparency."
Among all kinds of charities, Jewish and non-Jewish, the median fundraising costs were about $.08 of every dollar, she said -- "pretty good" compared to the most efficient charities. Those charities deemed the most efficient spent no more than $.10 cents, or 10 percent, to raise each dollar. It's estimated that there are between $25 billion and $50 billion in assets in the coffers of U.S. Jewish philanthropies, from foundations and federations to nonprofits and pension funds.
What the watchdog calls religious charities range from museums to universities to the U.S.-based fundraising arms of Israeli institutions to Jewish federations and political groups. Each charity was assigned up to 70 points and up to four stars, with better scores going to those showing greater financial health and streamlined bureaucracies.
The Jewish groups ranked similarly to other nonprofits when it came to areas such as fundraising and program expenses, but ranked poorly regarding money in the bank.
Checked for their "working-capital ratio," or how much cash each group would have left if fundraising dried up, Jewish charities had enough to last for only 3.6 months on average, compared to 8.3 months for non-Jewish charities. Such "liquid assets" could be cash, stocks or easily sellable property such as real estate. The Jewish charities ranked lower because they typically raise the bulk of their money around the High Holidays and at the end of the year, but don't have cash on hand year-round, Miniutti said.
In Los Angeles, the top rated Jewish charities were Jewish Family Services (JFS), Mazon: A Jewish Response to Hunger and the Skirball Cultural Center, which were all awarded four stars, and 62, 63, and 68 points respectively. According to Charity Navigator, JFS spends only $.02 to raise every dollar, Mazon spends $.07 and the Skirball spends $.04.
The charity with the next highest rating was the Simon Wiesenthal Center which was awarded three stars and 53 points, and spends $.17 cents to raise every dollar. The Bureau of Jewish Education, Jewish Federation of Greater Los Angeles and the Survivors of the Shoah Visual History Foundation were granted two stars.
Nationally, the top Jewish charity was the Shefa Fund, which won a four-star, 69-point rating. The fund, dedicated to advancing social responsibility through grants, spent $.04 cents to raise each dollar, according to its Form 990.
Jeffrey Dekro, president of the Shefa Fund, said his organization's first-place ranking "is really consistent with the doctrine of our work."
At the bottom of the Jewish heap sat the Jerusalem Fund of Aish HaTorah, which is dedicated to Jewish education and outreach. The group garnered only 19 points and zero stars, spending $.23 cents to raise each dollar.
In several cases, Charity Navigator ranked branches of the same charities separately because they were incorporated separately for nonprofit status and file different forms to the IRS. Aish HaTorah represented one such case, with its New York branch, which it says is dedicated to "wisdom for living," gaining 53 points and three stars, spending only $.13 cents to bring in every dollar.
Irwin Katsof, the Los Angeles-based president of Aish HaTorah, said he couldn't discuss the findings until he had studied them more closely.
"I'm not really going to comment until I've had a chance to analyze how they did it," Katsof said.
Charendoff, whose Jewish Funders Network is an umbrella group for many of the more than 8,000 private Jewish family foundations in the United States, some of which were rated byc Navigator, said the rankings provide useful data but miss some subtleties.
While the rankings allow one to compare a range of similar charities for their efficiency, they offer only a snapshot that does not reflect an organization's development over time.
Newer charities "may take a few years to achieve a balance between building the business and delivering the product," he said.
The rankings also do not take into account the size of an organization, he added. A small foundation may have only one fundraising professional, accounting for a major share of its budget, compared to bigger organizations with more money and a few more fundraisers.
Charity Navigator's rankings, compiled in August and updated Sept. 3, were based on federal reports from 2001 and 2002, but the group "looked back" to 1997 and 1998 to "calculate growth as well," Miniutti said.
Other national Jewish nonprofits that got ranked for overall efficiency included Hillel: the Foundation for Jewish Campus Life, which ranked 10th, and the World Jewish Congress, which was listed 112th.
Staff Writer Gaby Wenig contributed to this report.