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International : Development and Relief Services

Room to Read

World change starts with educated children

three stars

89.94

465 California Street Suite 1000
San Francisco, CA 94104
tel: (415) 839-4400   Web Site
EIN: 91-2003533

Board Leadership
John Ridding
Board Chair

CEO
Geetha Murali
Chief Executive Officer

  Score
(out of 100)
Rating
Overall Score & Rating 89.94 three stars
  Financial 85.78 three stars
  Accountability & Transparency 100.00 four stars
This rating was published 03/01/2020 and includes data from FY2018, the most recent 990 received at that time.

Room to Read believes that World Change Starts with Educated Children. We envision a world in which all children can pursue a quality education that enables them to reach their full potential and contribute to their community and the world. Room to Read seeks to transform the lives of millions of children in developing countries by focusing on literacy and gender equality in education. Working in collaboration with local communities, partner organizations and governments, we develop literacy skills and a habit of reading among primary school children, and support girls to complete secondary school with the relevant life skills to succeed in school and beyond.

Room to Read believes that World Change Starts with Educated Children. We envision a world in which all children can pursue a quality education that enables them to reach their full potential and contribute to their community and the world. Room to Read seeks to transform the lives of millions of children in developing countries by focusing on literacy and gender equality in education. Working in collaboration with local communities, partner organizations and governments, we develop literacy skills and a habit of reading among primary school children, and support girls to complete secondary school with the relevant life skills to succeed in school and beyond.

Impact Information

GuideStar is Charity Navigator's trusted partner in sharing information on how this organization seeks impact.  GuideStar has recognized this organization with a Gold Seal of Transparency for voluntarily and publicly describing their goals, strategies, and accomplishments.  Learn More about Impact Information.
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This impact information is current as of March 2020, when it was provided to us by GuideStar. At this time, Impact information published on this organization's page has no effect on its rating per our methodology.

Financial

three stars

85.78

Accountability & Transparency

four stars

100.00

This rating was published 03/01/2020 and includes data from FY2018, the most recent 990 received at that time.
Overall Rating Chart
  Program Expenses
(Percent of the charity's total expenses spent on the programs
and services it delivers)
85.4%
  Administrative Expenses 4.5%
  Fundraising Expenses 9.9%
  Fundraising Efficiency $0.09
  Working Capital Ratio (years) 0.45
  Program Expenses Growth 4.8%
  Liabilities to Assets 23.2%
All data for Financial Performance Metrics calculations was provided by Room to Read on recent 990s filed with the IRS.
All data for Financial Performance Metrics calculations was provided by Room to Read on recent 990s filed with the IRS.

Highly Rated

Charity Name & State Overall Score Overall Rating
Room to Read (CA) 89.94 three stars
Partners Worldwide (MI) 89.48 three stars
Lifewater International (CA) 92.49 four stars
Root Capital (MA) 85.57 three stars
World Neighbors (OK) 92.88 four stars

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REVENUE  
Contributions  
   Contributions, Gifts & Grants $40,141,673
   Federated Campaigns $0
   Membership Dues $0
   Fundraising Events $11,203,565
   Related Organizations $0
   Government Grants $3,021,963
Total Contributions $54,367,201
   Program Service Revenue $0
Total Primary Revenue $54,367,201
   Other Revenue $-170,325
TOTAL REVENUE $54,196,876
   
EXPENSES  
   Program Expenses $41,913,115
   Administrative Expenses $2,096,689
   Fundraising Expenses $4,984,482
TOTAL FUNCTIONAL EXPENSES $48,994,286
   
Payments to Affiliates $0
Excess (or Deficit) for the year $5,202,590
   
Net Assets $22,812,368

Program names and associated costs are listed for the top programs as reported on the charity's most recently filed Form 990. The top programs displayed will include the largest three programs, or those programs covering at least 60% of the charity's total expenses, whichever comes first.

Program Name Amount Spent % of Program Expenses
Literacy Program $22,059,049 52.6%
Girls' Education Program $9,252,564 22.1%
School Construction $1,968,632 4.7%

Ratings History

Form 990 FYE Date Published Overall Score Overall Rating
CN 2.1
2018-12 03/01/2020 89.94 three stars
2017-12 03/01/2019 92.92 four stars
2016-12 04/01/2018 91.42 four stars
2015-12 05/01/2017 91.33 four stars
2014-12 06/01/2016 90.80 four stars
 
CN 2.0
2014-12 04/01/2016 87.75 three stars
2013-12 06/01/2015 91.17 four stars
2013-12 05/01/2015 90.73 four stars
2012-12 12/20/2013 93.69 four stars
2011-12 02/01/2013 97.18 four stars
2010-12 04/01/2012 97.16 four stars
2009-12 09/20/2011 97.13 four stars
 
CN 1.0
2009-12 12/01/2010 95.95 four stars
2008-12 03/01/2010 96.06 four stars
2007-12 10/01/2008 96.14 four stars
2006-12 12/15/2007 96.28 four stars
2005-12 04/01/2007 96.58 four stars

The data displayed on this tab is provided by the IRS in the form of Publication 78 and the Business Master File (BMF).

EIN 91-2003533
Name in IRS Master File ROOM TO READ
NTEE Code B90
NTEE Classification Educational Services and Schools - Other
NTEE Type Educational Institutions and Related Activities
Classification Educational Organization
Subsection 501(c)(3)  (View the list of codes)
Activities
Foundation Status Organization which receives a substantial part of its support from a governmental unit or the general public   170(b)(1)(A)(vi)
Deductibility Contributions are deductible
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).
Group Name [Not Applicable]
Ruling Date December, 1999
Filing Requirement 990 (all other) or 990EZ return
Fiscal Year End December
IRS Forms 990
(provided courtesy of Foundation Center)
(Log In or Register Now to View Forms 990!)
  • December, 2018
  • December, 2017
  • December, 2016
  • December, 2015
  • December, 2014
Compensation % of Expenses Paid to Title
$259,270 0.52% Geetha Murali Chief Executive Officer
Other Salaries of Note
$58,510 0.11% Erin Ganju Former Chief Executive Officer

Highly Rated

Charity Name & State Overall Score Overall Rating
Room to Read (CA) 89.94 three stars
Growing Hope Globally, formerly Foods Resource Bank (IL) 89.39 three stars
Shared Interest (NY) 85.07 three stars
GlobalGiving (DC) 98.23 four stars
Bridges to Prosperity (CO) 92.92 four stars

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This charity has an official representative registered with Charity Navigator.

Official Charity Response

The Issue of Impact: Why is Room to Read Losing a Star While Increasing its Impact?

Room to Read has received Charity Navigator’s four-star rating for 13 years, something fewer than 1 percent of charities can say. And we’re generally committed to the financial practices that Charity Navigator’s methodology rewards – like spending more than .85 cents of every dollar on our programs versus other expenses. Thus, we consistently receive maximum points for administrative and fundraising spending ratios.

But there are two areas in which our strategy and practices are not appropriately evaluated using Charity Navigator’s current methodology, which has led to our current rating of 89.94 – less than 0.06 points shy of the 90-points we need to retain our four-star rating for 2018.

The issues at play center around impact, which we believe to be the ultimate measure of success. Our impact so far includes benefiting more than 18 million children across 37,000 communities in 16 countries, while ensuring positive learning and life outcomes measured by internal and external evaluators. In 2018 alone, we benefited more than 2.7 million children, while proving our programs help children read two to three times faster than children in comparison schools. In addition, participants in our Girls’ Education Program are transitioning to tertiary or employment at rates of 81 percent from communities with traditionally low transition rates of 10 to 20 percent. We believe such clear results demonstrate our effectiveness as a social justice NGO and should be included in any evaluation of our program strength. We are enormously proud of our ability to scale our impact to transform the lives of increasingly more children and their families every year, and doing so with maximum efficiency.

Issue #1: We strive for maximum efficiency in all spending, including programmatic spending

Charity Navigator uses growth in programmatic spending, measured via 990 reporting, as an indicator that “an organization has increased its influence and ability to contribute to its mission.” We respectfully disagree. Room to Read has been able to significantly increase our impact without commensurate increases in programmatic spending through government and strategic partnerships. That’s a good thing. But because Charity Navigator’s methodology does not account for impact and only reflects programmatic spending growth, we lost points in that category in our 2018 rating. In essence, we lost points for operating more efficiently.  

As an organization obsessed with impact, we rigorously track and document our impact numbers, using independent sources for validation. By the end of 2020, we will have benefited 20 million children over the course of 20 years, and by 2025, we plan to double the number of children benefited to 40 million through partnerships.  In other words, in just four years we will benefit twice the number of children we were able to benefit in our first 20 years. The only way we can achieve this type of effective growth is by partnering with governments that learn our techniques and replicate them. As governments learn from us and adopt our programs, our programmatic costs go down, while our validated impact and outcomes go up. 

 As you can see in the chart below, the number of children we have benefited has increased significantly, while our programmatic spending over the same period has increased more modestly. That’s in large part due to smart investments in program development that have fueled our efficiency and effectiveness.

Source: Room to Read Annual Financial Statements

Charity Navigator’s methodology rewards up to 10 points in the area of programmatic spending growth for social justice-focused charities. All charities receive 1 point and additional points – up to 10 total – are awarded based on the percentage growth in programmatic spending over the three or four years being considered. So, a charity that increases its programmatic spending by 9 percent (or more) over three or four years will get the full 10 points, even if its impact has not increased.

Due to increased efficiency from 2014 to 2018, our programmatic spending as reported in our 990 increased just under 5 percent, which earned us six points in this category. Ironically, we could have easily increased our programmatic spending and operated less efficiently, perhaps by giving raises to programs officers or investing in nicer office buildings. That type of programmatic spending would be rewarded using Charity Navigator’s methodology – and likely would have gotten us to four stars this time – but it’s not how our investors want us to spend their money. And we’re pretty sure it’s not what Charity Navigator seeks to reward.

Issue #2: We believe in maintaining our progress by using our reserves during times of short-term disruption

A second area where our practices don’t align with those rewarded by Charity Navigator is in the area of managing financial reserves. Although we agree with Charity Navigator that it’s financially prudent for organizations to create – and build upon – their financial reserves, we also believe that financial reserves are designed to be used as needed in the short-term to further impact, after which they can be replenished.

Our decision to do just that in 2016 cost us points in our current 2018 rating. For social justice charities with a strong U.S. donor base such as Room to Read, 2016 was a challenging year because many donor dollars were diverted due to the U.S. presidential election. As a result, Room to Read knowingly drew from our reserves to cover short-term programmatic expenses. This was an easy decision based on the fact that we had immediate programmatic needs, along with a globally diverse donor base and a donor retention rate of more than 80 percent. Since then, as planned, we have steadily rebuilt our reserves, contributing $4.4MM to net assets in 2018 and an expected $7MM+ in 2019.

Our financial projections indicate that we will likely have our fourth star reinstated once we file our 990 for 2019, since 2018 and 2019 have been two of the most financially successful years in our history. We’re pleased about that, but we continue to be guided by our North Star: impact. Our objective of transforming the lives of as many children as we can – as fast as we can – underpins all decision-making and will continue to do so. By putting impact first, we have earned numerous accolades and distinctions, as well as the trust of governments in the communities where we work. Governments and other large organizations want to partner with us because they see our impact, and they appreciate that our impact data are scrutinized and validated by independent third parties.

We are proud to be operating with more efficiency, effectiveness, transparency and impact than ever before and continue to engage Charity Navigator and other NGOs on the topic of impact and the need to include it in ratings methodologies. We also recognize the challenges Charity Navigator faces in developing a methodology that applies to organizations of various sizes and focus areas, as well as the importance of having evaluating agencies that hold our sector to high standards. We look forward to continuing the conversation within the sector on these vital metrics, so that we can increasingly value our most important goal - impact. You can visit our website to learn more about Room to Read, our strategic plan, and our bold goals for the future. If you have any questions, don’t hesitate to reach out to info@roomtoread.org.

 

 

 

Charity Contact Info

Room to Read
465 California Street
Suite 1000
San Francisco, CA 94104
tel: (415) 839-4400
fax: (415) 484-7653
EIN: 91-2003533

Visit Web Site

Board Leadership

John Ridding
Board Chair

CEO

Geetha Murali
Chief Executive Officer

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