Tracking your donation dollars

Charities explain how they spend money to raise it

WEST PALM BEACH, Fla. - The true essence of giving is said to come from the heart.

"For-profit corporations are set up to make money. Nonprofits are set up to do good." Rena Blades, CEO for the Cultural Council of Palm Beach County said. "In the last decade there has been increasing scrutiny of nonprofit financials, and this issue in particular, how much is spent on raising money."

Across Florida and across the country, NewsChannel 5 and our news partners at the Scripps Howard News Service found a staggering number of non-profits and charities report zero fundraising expenses to the federal government.

Kelly DeGregorio with the Martin Memorial Foundation said people are not just sending nonprofits money anymore. "Gone are the days where people would just write a check and say, 'see you next year.'"

Martin Memorial Medical Center is one of the non-profits along the Treasure Coast that reported spending zero dollars on fundraising. Government records show its fundraising arm, Martin Memorial Foundation, spent just over a million dollars on fundraising, including the cost of its annual Chrysanthemum Ball.

Click here to the view the most recent Form 990 from Martin Memorial Medical Center.

"We spend about $200,000 on it but it raises about $1 million," DeGregorio said. "We are very transparent about the money that we spend on fundraising. Our costs are about 14-cents on the dollar raised."

Click here to view the most recent Form 990 from Martin Memorial Foundation.

When it comes to transparency it's one of the exceptions. According to the Scripps Howard News Service, nationwide 41 percent of the nearly 38,000 non-profits and charities that raise at least $1 million every year told the government they raised it at no cost. The Scripps Howard News Service examined the most recent Form 990's for these charities which nonprofits are required to file with Internal Revenue Service every year.

"What nonprofits have is a social contract with society," Ottenhoff , president and CEO of the nonprofit oversight group GuideStar said. "In return for not paying taxes, getting a tax-exempt status, they have an obligation to tell their donors how they're spending their money, to be transparent about it and to be accountable." GuideStar provided the financial data for the Scripps study.

Click here to search for free for Form 990's for nonprofits on the GuideStar website.

But, what is considered fundraising? Depending on whom you ask, it is something different.

Patrick Rooney with the Center on Philanthropy at Indiana University said the IRS instructions are clear. "That is you are not to allocate your fundraising costs to your program costs. It's misleading to the donors. And it's misleading to the public and to the government."

In South Florida, Prime Time Palm Beach County, a nonprofit that develops after-school programs for young children also reported spending zero dollars on fundraising.

"Fundraising, to me, I think of it as galas and having events to raise money. That's what my understanding of fundraising is," Suzette Harvey the executive director of Prime Time Palm Beach County said.

Much of its work is funded by grants. It hired a grant writer last year to build outreach and find new grants.

"The grant writer, I guess part of her salary could be going to fundraising if you want to capitalize it, but, as I said, we don't have the gala events," Harvey said. "I guess we would have to put that down."

Click here to view the most recent Form 990 from Prime Time Palm Beach County.

"It's so important that nonprofits be good stewards of private donors dollars," Blades said. "Because, we are that. We are stewards for the community to do good in the community."

Click here to view the most recent Form 990 from Palm Beach Cultural Council.

So much giving, after all, comes from the heart.

Click here to search for nonprofits that raised at least $1 million and told the IRS, according to the group's most recent available Form 990 report, that they spent zero dollars raising the money. Reports can be sorted by state, county and whether the nonprofits reported "zero" fundraising expenses.

Investigative Producer Lynn Walsh contributed to this story.

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