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NYC Charities Inefficient: Report

Crain's New York Business

July 7, 2003


New York City has more large charities than any other U.S. city, yet they are the least efficiently run, according to a study by a watchdog group.

The report, by Charity Navigator, found that New York groups spend less on programs for clients than their peers in other markets: The median percentage of spending on programs and services among New York's largest charities was 79%, compared with 81.5% for the largest 2,500 charities nationwide.

At the same time, New York nonprofits were among the five biggest spenders on fund-raising and administration. Their median percentage of spending on fund-raising was 7.3%, compared with 5.9% nationally. The administration expense ratio among New York charities was 11%, compared with 10.1% nationally.

Part of the discrepancy can be attributed to the high cost of living in New York and the large number of nonprofits based in the city, say officials at Charity Navigator, which is based in Mahwah, NJ.

"The cost of doing business in New York is simply much higher than just about anywhere else in the U.S. Labor costs are higher, office space is more expensive, and so on down the line," says Trent Stamp, the group's executive director. "These factors result in a crowded and highly competitive nonprofit sector where charities always need more to do the same as charities in other parts of the country."

Copyright 2003, Crain Communications, Inc

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