THE MONEY CHARITY HONOR ROLL The 10 winners on our list spend your contributions wisely year after year.
(MONEY Magazine) – Before giving money to a charity, you surely want to feel confident that the group will put your dollars to good use. The exclusive MONEY honor roll of the 10 best-managed large U.S. charities (presented at left) can help you draw up your holiday gift list. So too will the table on pages 133 and 136 that ranks the 100 biggest charities in order of efficiency; it is based on 1990 data collected by the NonProfit Times, a monthly trade newspaper, plus our own reporting. The charities that qualified for our honor roll met these tests over the past three years: Inclusion on our list of the 100 biggest charities (United Way doesn't make it because the group doesn't compile nationwide audited data); Approval by the National Charities Information Bureau and the Philanthropic Advisory Service of the Council of Better Business Bureaus; and A consistent record of spending 70% or more on good works. From a list of 15 semifinalists, we then selected the 10 charities that funneled the highest percentage of their 1990 income to programs. The overall winner was the 58-year-old International Rescue Committee of New York City, which spent an inspiring 94.9% of its $37.6 million in income on emergency health care, schooling and other kinds of assistance to refugees around the world. No environmental group made the top 10, although the Nature Conservancy and the World Wildlife Fund rank high for efficiency on this year's list of the 100 biggest charities. The Nature Conservancy didn't make the honor roll because only 59% of its 1988 income went to programs (vs. 90.4% in 1990). And the World Wildlife Fund is not currently approved by the Council of Better Business Bureaus because the BBB says the group hasn't fully disclosed how much of the price of its stuffed animals and other products goes back to the charity; the WWF is correcting the problem. Here's more about our winners -- and what makes them so efficient:
1 INTERNATIONAL RESCUE COMMITTEE Formed in 1933 at Albert Einstein's suggestion to evacuate anti-Nazis trapped in Hitler's Germany, the nonsectarian charity still comes through for refugees in emergencies. For instance, as Kurds fled Iraq last April, IRC deputy director of operations H. Roy Williams flew to Cukurca, Turkey, where 150,000 Kurdish refugees were clinging to life on a rain-soaked mountainside. ''It was like an anteroom of hell,'' he recalls. Within weeks, the society had brought in clean water and constructed enough shelters and latrines to help cut the death rate from 60 people a day to 25. Worldwide there are about 18 million refugees today, up from 10 million in 1983, according to executive director Robert DeVecchi. ''And the crises are coming with less warning,'' he says. Thanks partly to tightfisted administration, the society devoted 94.9% of its 1990 income to programs. Last year, for example, the floor at IRC's 10,000-square-foot headquarters (386 Park Ave. South, New York, N.Y. 10016) was carpeted for $20,000, but only after management learned that the worn linoleum tiles could not be replaced because they were no longer made. The society relies on worldwide government agencies and the United Nations for 60% of its budget. To boost income from private sources, the charity is trying to target its fund-raising appeals by computerizing its address list of 80,000 individual contributors (cost: $25,000). Until last summer, staffers contentedly recorded all IRC donations on three-inch-by-five-inch file cards.
2 PROJECT HOPE In contrast to the seat-of-the-pants operation at the International Rescue Committee, this 33-year-old medical-assistance charity is a well-oiled machine. Dr. William Walsh, 71, founder and president of Hope (Millwood, Va. 22646), has unusually close ties to business leaders. Indeed, when an emergency demands fresh cash or other kinds of assistance, he simply thumbs through the Standard & Poor's 500 directory on his desk for a suitable donor. Or, depending on the circumstances, he summons help from a political leader. ''When we wanted to set up the first pediatric burn unit in Moscow in July 1990, the mayor of Moscow gave us three apartments, free office space, telephones and a driver,'' brags Walsh. ''That's how you save money.'' And it helps explain how the group managed to spend 89.6% of its 1990 income of $47.8 million on programs. Project Hope provides medical care and supplies in 28 countries, including the U.S. In February, for example, the charity responded to a White House appeal by shipping nearly $4 million worth of antibiotics, vaccines, vitamins, sterile dressings and sutures -- donated by 20 U.S. manufacturers -- to Lithuania, Latvia, Estonia and the Ukraine.
3 GOODWILL INDUSTRIES OF AMERICA Most people know 89-year-old Goodwill (9200 Wisconsin Ave., Bethesda, Md. 20814) through its 4,401 donation centers and 1,213 shops, which sell used clothing and home furnishings. Goodwill once operated mainly in needy neighborhoods. In the mid-1980s, however, it spiffed up its existing stores and opened new ones in middle-class areas. At the same time, Goodwill streamlined operations -- for example, it now tries to sell donations locally rather than ship them to central distribution centers. As a result, administrative costs fell from 12% of 1988's income of $555 million to 8% of last year's $664.1 million. The sales proceeds help pay for vocational training and provide work opportunities for disabled and disadvantaged people in the U.S. and Canada. Goodwill last year employed 51,151 people in its stores and donation centers and helped another 20,971 get jobs with private employers, typically as packagers, quality-control inspectors and telephone or computer operators. ''We train people for jobs we know exist,'' says Goodwill president David Cooney.
4 AMERICAN RED CROSS With 1990 revenues of $1.47 billion, up 28.5% from 1989, this 110-year-old institution is bigger than half the Fortune 500 companies and easily the largest nonsectarian charity on our list of 100. Yet despite its palatial marble headquarters (17th and D Sts. N.W., Washington, D.C. 20006), the Red Cross hasn't forgotten how to squeeze a dollar. It holds down its fund-raising costs largely by keeping its ratio of volunteers to paid staff at an astounding 50 to one. (The ratio at many other charities is more like eight to one.) As a result, 83.6% of last year's income went for items like food, shelter and medical assistance to victims of 54,000 fires, floods and other disasters around the world. Even so, the Red Cross says it is suffering today from a money crunch. It was caused largely by these events: the need to spend $18.4 million on blood deliveries and other assistance during Operation Desert Storm; $12 million on food and shelter for 8,500 victims of the April floods in Arkansas, Louisiana and Texas; and similarly large amounts on other major crises such as the recent Oakland, Calif. fire. Disaster relief funds have fallen $10 million short of outlays in the 12 months that ended in June, according to James Krueger, vice president for public support. At the same time, local chapters are no longer getting large annual increases in financial support from local United Way campaigns, which must often divide money among 20% more organizations than they did three years ago. To economize, the new Red Cross president, Elizabeth Dole, has cut headquarters' administrative spending by 7%. She has also taken steps to revitalize the Red Cross' image. Stung by criticism that the charity was lax in keeping the AIDS virus out of the nation's blood supply (see MONEY's March 1986 article, ''Inside the Billion-Dollar Business of Blood,'' winner of the American Society of Magazine Editors' 1987 national magazine award for public service), Dole announced in May a two-year-long reorganization of the program. Today the Red Cross also boasts the nation's largest network of AIDS educators, who deliver the safe-sex message from coast to coast through lectures, brochures and videos.
5 SAVE THE CHILDREN FEDERATION You've seen the ads: like Paul Newman and Joanne Woodward, you can provide assistance to a desperately poor child in one of 20 states or 37 foreign countries for just $240 a year. Actually, contributions to Save the Children (54 Wilton Rd., Westport, Conn. 06880) don't go to specific children. ''We combine all the sponsorship money earmarked for a particular community to help improve its total environment,'' says president James J. Bausch. ''We might, for example, fix the water supply, build a school or bring in a doctor to inoculate all the kids against polio.'' Such contributions account for only 25% of the group's revenues; the rest comes from corporations, federal agencies and foundations. Save the Children, which is 60 years old, spent an impressive 83.3% of its $90.8 million income on programs in 1990. Still, overhead costs such as postage, health insurance and salaries have risen from 6.4% to 7.8% of income since 1988. To boost revenues, Bausch has increased mail appeals from four to five a year and is experimenting with soliciting by phone. ''I don't like getting those calls at night either,'' he confesses. ''But I understand why charities do it.''
6 WORLD VISION Two years of double-digit revenue growth, to $215.5 million in 1990, ''have left us surprised and thankful,'' says John Jemelian, vice president for finance and administration at this evangelical Christian organization (919 W. Huntington Dr., Monrovia, Calif. 91016). Like Save the Children, World Vision advertises for $20-a-month child sponsorships. And as in the case of Save the Children, contributions don't go to specific kids. Instead, the funds provide medical assistance, education and food for more than a million children in 94 countries, 28 of them in Africa. The U.S. charity spent 81.9% of its money on its charitable programs in 1990, most of them in partnership with local churches or civic organizations. A full 62% of its funds go to World Vision International, the umbrella group for nine national branches that disburses contributions to help children throughout the world. Although the U.S. group is approved by the Council of Better Business Bureaus and the National Charities Information Bureau, some of the European affiliates have recently run into criticism. ''We find in the case of World Vision Germany that not enough money reaches the projects,'' says Lutz Worch, director of the German Central Institute for Social Affairs, a government agency in Berlin that monitors charities. In response, Richard Watson, a spokesman for World Vision International, defends his group. He says the German affiliate has hired an independent auditor and changed its accounting procedures to more accurately reflect the way the charity funds its programs.
7 NATIONAL EASTER SEAL SOCIETY For 72 years, Easter Seal (70 E. Lake St., Chicago, Ill. 60601) has helped people with problems ranging from neuromuscular impairments to psychological disorders, with the same zeal that Wall Streeters pursue profits. For example, when a disabled person seeks help from one of the charity's 400 local offices, he is often assigned to a suitable therapist -- the charity employs 7,320 nationwide -- and a computer file is set up to track his progress. Easter Seal staffers review such files periodically to make sure that the therapy programs are effective and efficient. Last year 77.9% of Easter Seal's $288.5 million in revenues went toward programs, generally direct services to 1.1 million people in the U.S. and Puerto Rico, up from 561,000 a decade ago. But newcomers are arriving with new needs. ''Crack babies are a growing problem in metro areas,'' says president James E. Williams Jr. ''Many of these infants have multiple disabilities, from delayed motor development to retardation, so our caseloads will increase.'' In Washington, D.C., for instance, 20% of the children under four in treatment are crack babies, up from 10% in 1989.
8 CHRISTIAN CHILDREN'S FUND For many, this charity (P.O. Box 26511, Richmond, Va. 23286) is virtually synonymous with actress Sally Struthers, its spokesman for 15 years. With 1990 revenues of $103 million, the organization -- nonsectarian, despite its name -- provides food, health care and education to 533,000 children in 29 countries, chiefly India and Brazil, up from 176,000 in 1976. Its ChildAlert branch now supplies emergency assistance to children who are homeless, in refugee camps or suffering from AIDS or the effects of maternal drug addiction. And the charity's ChildEurope campaign helps orphans institutionalized in Romania as well as victims of the Chernobyl disaster. One little-known fact: some 28% of the Christian Children Fund's projects these days involve adult literacy, on the assumption that educated parents tend to be more likely to obtain schooling for their kids.
9 MUSCULAR DYSTROPHY ASSOCIATION No charity mounts a bigger TV fund-raising blitz than MDA (3561 E. Sunrise Dr., Tucson, Ariz. 85718), with its annual 21 1/2-hour Jerry Lewis Labor Day Telethon. Last year it raised $44.2 million for the 41-year-old organization, | more than a third of its $118.8 million in revenues. At the same time, the telethon is stunningly effective in educating Americans about the 40 neuromuscular diseases on which the Muscular Dystrophy Association spends 76.7% of its income. But MDA, like many health-related charities, has seen its expenses spiral. A decade ago, for instance, the group provided $2,500 motorized wheelchairs to 1,200 patients; this year MDA gave away 2,000, but the price of chairs has gone up 180% to $7,000 each. To cut annual overhead by $2 million, the charity recently moved its 150-person headquarters from New York City to Tucson.
10 LEUKEMIA SOCIETY OF AMERICA ''When there's help, there's hope.'' That's the society's new slogan; it refers to recent advances in the treatment of leukemia and related diseases. The cure rate for children with the most common form of leukemia has jumped to 73%, from just 5% in 1960. And researchers hope to find a cure for other types of leukemia within a decade. To reach that goal, the society (733 Third Ave., New York, N.Y. 10017) devotes 25% of its program dollars to research grants that this year went to more than 200 scientists in the U.S. and abroad. The charity's honorary chairman is Barbara Bush; she and the President lost their three-year-old daughter Robin to the disease in 1953. The 42-year-old Leukemia Society uses nearly every legitimate method to raise funds -- $32.5 million in 1990. The techniques include a national telethon and 50 local radiothons each year. In addition, DialAmerica Marketing donates $3 to the society for every magazine subscription it sells -- a total of $600,000 this year. And the charity's 57 regional chapters mount ambitious special-events programs, such as Celebrity Waiters dinners, in which local sports figures and politicians serve meals to guests who pay about $25 a plate. Says Peter Cakridas, the Leukemia Society president and chief executive officer: ''We try to make sure the giver is having a good time while giving.''