November 16, 2007
By Daniel Chang
South Florida's largest charities are growing faster than others in the nation, thanks in large part to a philanthropic community that also ranks among the most generous, according to a study of giving practices in 30 metropolitan areas by the nonprofit watchdog group Charity Navigator.
The findings from a 2007 study reflect a turnaround from what Charity Navigator found in 2006, when South Florida was ranked 15th in giving.
The latest examined 31 charities with annual budgets larger than $1 million and based in Miami-Dade and Palm Beach counties. It found that among their national peers, these South Florida charities reported the highest total revenue and ranked second in total contributions, behind Detroit.
''There seems to be a lot of energy for giving in Miami,'' said Sandra Miniutti, vice president of marketing for Charity Navigator.
Yet while South Florida nonprofits scored high for total giving and growth rates, they lagged in others, such as spending on programs (at the bottom) and safeguarding donor rights with written policies (not a common practice).
South Florida nonprofits also spent more on fundraising than comparable charities elsewhere, the study noted, leaving them with less to spend on programs.
On average, South Florida charities spend about 78.5 percent of their total budget on programs. The national average is 80.4 percent.
That could be a problem for future fundraising efforts since the first thing donors usually look for is the amount a charity spends on its primary program, be it feeding the hungry or staging ballet.
Still, Miniutti said, South Florida's situation is not necessarily bad news.
''Though they're investing a big portion of their budget on fundraising, they're doing it efficiently,'' she said. ``They're getting money back from their investments. Down the road, this will allow them to invest more in programs.''
Though the Charity Navigator study is meant to help donors make more informed decisions on which charities to support, Ruth Shack, president of the Dade Community Foundation, feels it is ineffective.
RATING THE RATINGS
Charity Navigator surveyed the public tax filing, or Form 990, of the Dade Community Foundation in its study and gave the 40-year-old nonprofit three out of four stars and a 52.7 (out of 70) rating.
''We're not in the fundraising business. So to be compared with the United Way, with the Red Cross, with the [Boy] Scouts [of America], they are all fundraisers,'' Shack said.
``Our money comes from bequests. So if our friends have not died, then we don't have a good year in terms of asset building, which gives us a lower rating with Charity Navigator. And that's my problem with Charity Navigator. They're comparing apples and oranges.''
The Charity Navigator study was derived entirely from analyses of each group's Form 990, filed each year with the Internal Revenue Service.
South Florida charities analyzed range from the Mount Sinai Medical Center Foundation to Fairchild Tropical Botanic Garden and the New World Symphony.
Only one of the 31 nonprofits studied -- Planned Parenthood of Greater Miami, Palm Beach and Treasure Coast -- is based outside Miami-Dade County.
South Florida's strong showing in this year's study represents a reversal from its ratings in the 2006 survey. Miniutti said such fluctuations likely reflect changes in the nonprofit world and not in donors' attitudes toward philanthropy.
''Nationwide, the level of giving doesn't change a whole lot from year to year,'' she said.
``It may be that the particular charities in Miami fell out of favor with local donors [during the low revenue growth years]. Maybe they didn't offer fundraising appeals that were appealing to local donors.''
Natural disasters, such as the 2004 tsunami that struck Indonesia and 2005's Hurricane Katrina, also tend to divert donations away from nonprofits, Miniutti said.
MAKING IT PERSONAL
After checking a charity's nonprofit status -- to ensure a tax deduction -- and reviewing its fiscal health, Miniutti advises donors to get personally involved.
''If it's a local charity, go visit it, volunteer for it,'' she said.
Some people research a new car more thoroughly than the nonprofits they choose to support, Shack said.
Scot Marken, president and CEO of the nonprofit Donors Forum of South Florida, said studies like Charity Navigator's are a good initial step for donors who want to learn more about a charity. But they are not a definitive source, he said.
''They're not really able to look at the impact an organization is having in achieving its mission,'' said Marken.
Donors should not be guided strictly by a nonprofit's financials or its rating in the Charity Navigator study, he said.
''There are organizations doing good work, and people may be discouraged by reading too much into [the ratings],'' he said. ``It's easy to give away $1 million. It's hard to give away $1 million that makes a difference.''
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