Charity Navigator - Rating for Homeboy Industries

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Star Rating System

Charity Navigator evaluates a nonprofit organization’s financial health including measures of stability, efficiency and sustainability. We also track accountability and transparency policies to ensure the good governance and integrity of the organization.

Good

This charity's score is 87.43, earning it a 3-Star rating. Donors can "Give with Confidence" to this charity.

This score is calculated from two sub-scores:

Finance: 92.26 View details
Accountability & Transparency: 84.00 View details

This score represents Form 990 data from 2018, the latest year published by the IRS.

View this organization’s historical ratings.

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Star Rated Report

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Program Expense

Program Expense Ratio

79.7%

The Program Expense Ratio is determined by Program Expenses divided by Total Expense (average of most recent three 990s).

This measure reflects the percent of its total expenses a charity spends on the programs and services it exists to deliver. Dividing a charity's average program expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.

Source: IRS Form 990

Administrative Expenses

12.1%

As reported by charities on their IRS Form 990, this measure reflects what percent of its total budget a charity spends on overhead, administrative staff and associated costs, and organizational meetings. Dividing a charity's average administrative expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.

Source: IRS Form 990

Fundraising Expenses

8.0%

This measure reflects what a charity spends to raise money. Fundraising expenses can include campaign printing, publicity, mailing, and staffing and costs incurred in soliciting donations, memberships, and grants. Dividing a charity's average fundraising expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.

Source: IRS Form 990

Liabilities to Assets Ratio

11.1%

The Liabilities to Assets Ratio is determined by Total Liabilities divided by Total Assets (most recent 990).

Part of our goal in rating the financial performance of charities is to help donors assess the financial capacity and sustainability of a charity. As do organizations in other sectors, charities must be mindful of their management of total liabilites in relation to their total assets. This ratio is an indicator of an organization’s solvency and or long term sustainability. Dividing a charity's total liabilities by its total assets yields this percentage.

Source: IRS Form 990

Fundraising Efficiency

$0.09

The amount spent to raise $1 in charitable contributions. To calculate a charity's fundraising efficiency, we divide its average fundraising expenses by the average total contributions it receives. We calculate the charity's average expenses and average contributions over its three most recent fiscal years.

Source: IRS Form 990

Working Capital Ratio

0.78 years

Determines how long a charity could sustain its level of spending using its net available assets, or working capital, as reported on its most recently filed Form 990. We include in a charity's working capital unrestricted and temporarily restricted net assets, and exclude permanently restricted net assets. Dividing these net available assets in the most recent year by a charity's average total expenses, yields the working capital ratio. We calculate the charity's average total expenses over its three most recent fiscal years.

Source: IRS Form 990

Program Expense Growth

7.78%

We compute the average annual growth of program expenses using the following formula: [(Y_n/Y₀)^(1/n)]-1, where Y₀ is a charity's program expenses in the first year of the interval analyzed, Y_n is the charity's program expenses in the most recent year, and n is the interval of years passed between Y₀ and Y_n.

Source: IRS Form 990

Governance

Charity Navigator looks to confirm on the Form 990 that the organization has these governance practices in place.

Sources Include: IRS Form 990

Governance:
Independent Voting Board Members ... (More)
No Material Diversion of Assets ... (More) A diversion of assets – any unauthorized conversion or use of the organization's assets other than for the organization's authorized purposes, including but not limited to embezzlement or theft – can seriously call into question a charity's financial integrity. We check the charity's last two Forms 990 to see if the charity has reported any diversion of assets. If the charity does report a diversion, then we check to see if it complied with the Form 990 instructions by describing what happened and its corrective action. This metric will be assigned to one of the following categories: Full Credit: There has been no diversion of assets within the last two years. Partial Credit: There has been a diversion of assets within the last two years and the charity has used Schedule O on the Form 990 to explain: the nature of the diversion, the amount of money or property involved and the corrective action taken to address the matter. In this situation, we deduct 7 points from the charity's Accountability and Transparency score. No Credit: There has been a diversion of assets within the last two years and the charity's explanation on Schedule O is either non-existent or not sufficient. In this case, we deduct 15 points from the charity's Accountability and Transparency score. (Less)
Audited Financials Prepared by Independent Accountant ... (More) Audited financial statements provide important information about financial accountability and accuracy. They should be prepared by an independent accountant with oversight from an audit committee. (It is not necessary that the audit committee be a separate committee. Often at smaller charities, it falls within the responsibilities of the finance committee or the executive committee.) The committee provides an important oversight layer between the management of the organization, which is responsible for the financial information reported, and the independent accountant, who reviews the financials and issues an opinion based on its findings. We check the charity's Form 990 reporting to see if it meets this criteria. Full Credit: The charity's audited financials were prepared by an independent accountant with an audit oversight committee. Partial Credit: The charity's audited financials were prepared by an independent accountant, but it did not have an audit oversight committee. In this case, we deduct 7 points from the charity's Accountability and Transparency score. No Credit: The charity did not have its audited financials prepared by an independent accountant. In this case, we deduct 15 points from the charity's Accountability and Transparency score. (Less)
Does Not Provide Loan(s) to or Receive Loan(s) From Related Parties ... (More)
Documents Board Meeting Minutes ... (More)
Distributes 990 to Board Before Filing ... (More)
Compensates Board ... (More)

Policies

Charity Navigator looks to confirm on the Form 990, or for some metrics on the charity's website, that the organization has these policies in place.

Sources Include: IRS Form 990 and organization's website

Policies:
Conflict of Interest ... (More)
Whistleblower ... (More)
Records Retention and Destruction ... (More)
CEO Compensation Process ... (More)
Donor Privacy ... (More) Donors have expressed extreme concern about the use of their personal information by charities and the desire to have this information kept confidential. The exchanging and sale of lists for telemarketing and the mass distribution of "junk mail," among other things, can be minimized if the charity assures the privacy of its donors. Privacy policies are assigned to one of the following categories: Yes: This charity has a written donor privacy policy published on its website, which states unambiguously that (1) it will not share or sell a donor's personal information with anyone else, nor send donor mailings on behalf of other organizations or (2) it will only share or sell personal information once the donor has given the charity specific permission to do so. Opt-out: The charity has a written privacy policy published on its website which enables donors to tell the charity to remove their names and contact information from lists the charity shares or sells. How a donor can have themselves removed from a list differs from one charity to the next, but any and all opt-out policies require donors to take specific action to protect their privacy. No: This charity either does not have a written donor privacy policy in place to protect their contributors' personal information, or the existing policy does not meet our criteria. The privacy policy must be specific to donor information. A general website policy which references "visitor" or "user" personal information will not suffice. A policy that refers to donor information collected on the website is also not sufficient as the policy must be comprehensive and applicable to both online and offline donors. The existence of a privacy policy of any type does not prohibit the charity itself from contacting the donor for informational, educational, or solicitation purposes. (Less)

Transparency

Charity Navigator looks to confirm on the Form 990, or for some metrics on the charity's website, that the organization makes this information easily accessible.

Sources Include: IRS Form 990 and organization's website

Transparency:
CEO Salary Listed on 990 ... (More)
Board of Directors Listed on Website ... (More)
Key Staff Listed on Website ... (More)
Audited Financial Statements on Website ... (More)
Form 990 Available on Website ... (More)

Additional Information

Unscored

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Total Revenue and Expenses

This chart displays the trend of revenue and expenses over the past several years for this organization, as reported on their IRS Form 990.

Salary of Key Persons

Presented here are up to five of this organization's highest compensated employees. This compensation data includes salary, cash bonuses, and expense accounts and is displayed exactly how it is reported to the IRS. The amounts include salary, cash bonuses, and expense accounts. The amounts do not include nontaxable benefits, deferred compensation, or other amounts not reported on Form W-2. Read the IRS policies for compensation reporting

ARLIN CRANE, DIRECTOR OF SOCIAL ENTERPRISES

$139,457

FRANCIS HOTA, CFO (9/4/2018 TO 3/10/2020)

$104,344

ANDREW PLATT, INFORMATION TECHNOLOGY DIRECTOR

$104,344

FR GREGORY BOYLE SJ, EXECUTIVE DIRECTOR

$81,937

PERNILLE LOPEZ, CHAIR

$0

Source: IRS Form 990 (page 7), filing year 2019

Business Master File Data

Below are some key data points from the Exempt Organization IRS Business Master File (BMF) for this organization. Learn more about the BMF on the IRS website

Activities:

Activity data not reported from the IRS

Foundation Status:

Organization which receives a substantial part of its support from a governmental unit or the general public 170(b)(1)(A)(vi) (BMF foundation code: 15)

Affiliation:

Independent - the organization is an independent organization or an independent auxiliary (i.e., not affiliated with a National, Regional, or Geographic grouping of organizations). (BMF affiliation code: 3)

Data Sources: IRS Forms 990

The Form 990 is a document that nonprofit organizations file with the IRS annually. We leverage finance and accountability data from it to form Encompass ratings. Click here to view this organization's Forms 990 on the IRS website (if any are available).

Pandemic Response

Due to the unprecedented nature of the pandemic, we give charities such as this one the opportunity to share the story of COVID's impact on them. Charities may submit their own pandemic responses through their nonprofit portal.

Homeboy Industries reported being impacted by COVID-19 in the following ways:

Program Delivery
Revenue

How COVID-19 impacted the organization's operations financially:

In 2020, Homeboy’s budgeted revenue was projected to be $21.3 million. With the COVID-19 crisis, we forecasted a $3 million loss in revenue from our social enterprise businesses and a $2 million loss from fundraising—mainly because we had to cancel our largest fundraising event of the year, Lo Maximo, set for April 2020. To make up for these losses, we pursued COVID-19 relief funding through foundation grants, corporate grants, and government sources as they became available, and we stayed connected with our major donors. We also were fortunate to receive $1.7 million from the Paycheck Protection Program. As a result, we had a positive net income in 2020 and ended the year with a strong balance sheet and zero debt.

How COVID-19 impacted the organization's delivery of programs:

Initially, in response to COVID-19 and statewide shelter-in-place restrictions, we transitioned to virtual services for nearly 260 clients in our 18-month reentry program and their families. The move to virtual service delivery and online instruction was challenging for our community because most clients do not have high speed internet nor computers at home, and they mostly rely on cell phone service for their tech needs. To overcome this challenge, Homeboy Industries provided laptops and technology support to our trainees, helping minimize obstacles. Homeboy sustained all but one of our key programs (temporarily ceasing our Tattoo Removal program) and kept 90% of our program participants engaged throughout 2020. In June 2020, as an essential service provider, we reopened our doors practicing safety modifications. We remain adaptable with the ability to meet in-person, by phone, or by video conference as safety restrictions allow.

How this organization adapted to changing conditions caused by COVID-19:

As the COVID-19 pandemic heightened food insecurity, we recognized that our café could be redeployed to feed communities in need. We launched Feed HOPE to provide meals to food insecure citizens of Los Angeles. This new social enterprise is a win-win, providing jobs and meals to those in need.  At a time when unemployment and food insecurity were at the highest levels our community had experienced in decades, Feed HOPE became a critical resource both for people who need jobs, and people who need food.   We also noticed how COVID-19 was widening the digital divide among the population we serve. Families that relied on work, school, libraries, and other public places for computer and internet access are at an increasing disadvantage with regard to working/learning from home, applying for jobs, and more. So, our Homeboy Electronic Recycling team launched Connect HOPE; a 3-pronged program to fast track getting computers into the hands that need them most.

Innovations the organization intends to continue permanently after the pandemic:

While Feed HOPE was started in a crisis, we see this as a social enterprise business that will not only support Angelenos in need now, but also become an ongoing business that will continue well beyond the pandemic. Secondly, we intend to keep pursuing our pandemic-born Connect HOPE project through Homeboy Electronic Recycling. This program has been created to address the digital divide—an issue that will continue to affect the population we serve post-pandemic as well. The pandemic also informed the need of a robust technology operations team. With so many coworkers facing technological issues, and our headquarters needing significant support and modifications, we tripled our technology team from one member to three—both new members being internally promoted and coming from lived experience.

Historical Ratings

Date Published	Form 990 FYE	Overall Score	Overall Rating
Rating Version: 2.1
6/1/2018	2016-12	79.10
8/1/2017	2015-12	83.62
2/1/2017	2014-12	80.01
6/1/2016	2014-12	76.25
This organization received multiple star ratings within this fiscal year, due to an update to it's Accountability and Transparency data and/or the receipt of an amended Form 990.

Rating Version: 2.0
8/1/2015	2013-12	80.38
4/1/2014	2012-12	82.91
4/1/2013	2011-12	82.96
3/1/2012	2010-12	86.10
9/20/2011	2009-12	82.95

Rating Version: 1.0
5/1/2011	2009-12	89.49
6/1/2010	2008-12	85.46
5/1/2009	2007-12	92.70

Impact & Results

This score estimates the actual impact a nonprofit has on the lives of those it serves, and determines whether it is making good use of donor resources to achieve that impact.

Impact & Results Score

Not Currently Scored

Homeboy Industries cannot currently be evaluated by our Encompass Rating Impact & Results methodology because either (A) it is eligible, but we have not yet received data; (B) we have not yet developed an algorithm to estimate its programmatic impact; (C) its programs are not direct services; or (D) it is not heavily reliant on contributions from individual donors.

Note: The absence of a score does not indicate a positive or negative assessment, it only indicates that we have not yet evaluated the organization.

Learn more about Impact & Results.

Do you work at Homeboy Industries? Join the waitlist for an updated Impact & Results score.

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