Charity Review

Issued: August 2012 Expired: July 2014

Anti-Defamation League

Standards
Not Met
212-885-7970 605 Third Avenue, 9th Floor
New York, NY 10158-3560
www.adl.org

Conclusions


Anti-Defamation League (ADL) does not meet the following 3 Standards for Charity Accountability.

Standard 3: Frequency and Attendance of Board Meetings - An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

ADL does not meet this Standard because:

  • The board of directors held one meeting of the full governing board in 2011.
  • Attendance at its board meeting in 2011 was 34%.

Charity's response:

ADL has indicated that in accordance with its Bylaws, “…one-third (1/3) of the commissioners attending in person shall constitute a quorum…”. As such, while there was not a majority of the board in attendance, a quorum of the board was present.

Standard 6: Board Policy on Effectiveness - Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

ADL does not meet this Standard because:

  • The board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.

Standard 7: Board Approval of Written Report on Effectiveness - Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

ADL does not meet this Standard because:

  • It has not completed an effectiveness assessment in the past two years.
ADL meets the remaining 17 Standards for Charity Accountability.

Purpose

Year, State Incorporated: 1913, New York

Affiliates: ADL Foundation and ADL Foundation Common Fund

Stated Purpose: "to defend democratic ideals and eliminate anti-Semitism and bigotry in the United States and around the world, while providing knowledgeable leadership on a national level for the American Jewish community."

Programs


ADL strives to increase communication, understanding and respect among diverse groups, carrying out its mission through a network of regional and satellite offices in the United States and abroad. ADL fights anti-Semitism and different forms of bigotry in the U.S. and abroad through information, education, legislation, and advocacy. The organization also serves as a resource for government, media, law enforcement, educators, and the public. It scrutinizes and exposes extremists and hate groups as well as provides expertise on domestic and international terrorism. Through its international affairs and interfaith programs, ADL maintains contacts on different continents from which information is gathered relating to political and social movements which impact anti-Semitism and bigotry. Some ($1,379,543 or 3%) of ADL's program activities are conducted in conjunction with fund raising appeals.

For the year ended December 31, 2010, ADL's program expenses were:

  
Regional operations 21,747,215
Education 6,966,529
Civil rights 5,602,006
Marketing and communications 4,195,276
International affairs and interfaith programs 2,611,732
Leadership 2,275,362
Total Program Expenses: $43,398,120

Governance & Staff


Chief Executive : Abraham H. Foxman, National Director
Compensation*: 
$391,370

Chair of the Board: Robert G. Sugarman, National Chair of ADL's National Commission
Chair's Profession / Business Affiliation: Attorney

Board Size: 323

Paid Staff Size: 417

*2010 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.

Fund Raising


Method(s) Used:

Direct mail, telemarketing, special events, print advertisements, television, radio, grant proposals, Internet appeals, planned giving, and face-to-face meetings.
Fund raising costs were 17% of related contributions. (Related contributions, which totaled $50,278,966, are donations received as a result of fund raising activities.)
ADL incurred joint costs of $2,122,455 for informational materials and activities that included fund raising materials. Of those costs, $1,379,543 was allocated to program expenses, $501,812 was allocated to fund raising expenses, and $241,100 was allocated to administrative expenses.

Tax Status


This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial


The following information is based on ADL's audited financial statements (consolidated with affiliates) for the year ended December 31, 2010.

Source of Funds  
Contributions 50,278,966
Pension credit other than net periodic benefit cost 17,707,522
Investment return 5,335,087
Endowment return appropriated and other investment return 4,628,069
Investment return greater than amount appropriated 2,414,447
Change in the value of charitable trust and annuity agreements 1,818,846
Other income 922,719
Other, net 39,712
Total Income $83,145,368


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Uses of Funds as a % of Total Expenses

Programs: 73%  Fund Raising: 14%  Administrative: 13% 

Total income $83,145,368
Program expenses $43,398,120
Fund raising expenses 8,543,977
Administrative expenses 7,913,931
Total expenses $59,856,028
Income in Excess of Expenses 23,289,340
Beginning net assets 107,127,820
Other Changes in Net Assets (13,771,521)
Ending net assets 116,645,639
Total liabilities 54,311,726
Total assets $170,957,365

Note: In the above financial summary, "other changes in net assets" represents the effect of pension plan curtailment on net periodic benefit cost.

An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fund raising or promotional purposes.

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Standard 1: Oversight of Operations and Staff

Description:

Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

The organization meets this standard.

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Standard 2: Number of Board Members

Description:

Soliciting organizations shall have a board of directors with a minimum of five voting members.

The organization meets this standard.

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Standard 3: Frequency and Attendance of Board Meetings

Description:

An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

ADL does not meet this Standard because:

Charity's response:

ADL has indicated that in accordance with its Bylaws, “…one-third (1/3) of the commissioners attending in person shall constitute a quorum…”. As such, while there was not a majority of the board in attendance, a quorum of the board was present.

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Standard 4: Compensated Board Members

Description:

Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

The organization meets this standard.

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Standard 5: Conflict of Interest

Description:

No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

The organization meets this standard.

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Standard 6: Board Policy on Effectiveness

Description:

Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

ADL does not meet this Standard because:

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Standard 7: Board Approval of Written Report on Effectiveness

Description:

Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

ADL does not meet this Standard because:

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Standard 8: Program Service Expense Ratio

Description:

Spend at least 65% of its total expenses on program activities.

The organization meets this standard.

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Standard 9: Fund Raising Expense Ratio

Description:

Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

The organization meets this standard.

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Standard 10: Ending Net Assets

Description:

Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

The organization meets this standard.

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Standard 11: Financial Statements

Description:

Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

The organization meets this standard.

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Standard 12: Detailed Functional Breakdown of Expenses

Description:

Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

The organization meets this standard.

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Standard 13: Accuracy of Expenses in Financial Statements

Description:

Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

The organization meets this standard.

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Standard 14: Budget

Description:

Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

The organization meets this standard.

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Standard 15: Misleading Appeals

Description:

Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

The organization meets this standard.

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Standard 16: Annual Report

Description:

Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

The organization meets this standard.

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Standard 17: Web Site Disclosures

Description:

Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

The organization meets this standard.

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Standard 18: Privacy for Written Appeals & Internet Privacy

Description:

Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

The organization meets this standard.

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Standard 19: Cause Related Marketing

Description:

Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

The organization meets this standard.

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Standard 20: Complaints

Description:

Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.

The organization meets this standard.

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