Charity Review

Issued: July 2012 Expires: July 2014

Kids Against Hunger

Accredited Charity

Meets Standards

763-257-0202 5401 Boone Avenue North
New Hope, MN 55428
www.kidsagainsthunger.org

Conclusions


Kids Against Hunger (KAH) meets the 20 Standards for Charity Accountability.

Purpose

Year, State Incorporated: 1999, Minnesota

Affiliates: 94 chapters

Stated Purpose: "to significantly reduce the number of hungry children in the U.S. and to feed starving children throughout the world."

Programs


KAH’s satellite development program prospects for and opens food packaging satellite operations. The organization also supports a network of existing food packaging satellites that extends across the U.S. and Canada. Those satellites establish relationships with local corporate, civic, and school groups. Each satellite is licensed by Headquarters to use KAH's name, branding, and proprietary food formula. The organization’s food packaging program engages community volunteers as they assemble KAH's meals. The program consists of permanent facilities in New Hope (MN), Mankato (MN), and Orlando (FL), a mobile packaging operation based in New Hope, and nearly 90 independent satellite locations across the U.S. and Canada. KAH's permanent food packaging locations invite community groups and individuals to participate in the organization's hunger relief efforts by signing up for monthly or one-time packaging sessions. The organization's mobile packaging department offers options to organizations to host their own local food packaging events anywhere in the U.S. at a program cost of $0.23 per meal. KAH’s food distribution program works with its non-governmental distribution partners (NGOs) operating in foreign countries to manage the distribution of the organization’s meals. This is accomplished by seeking out NGOs that have an established ongoing feeding program overseas. The distribution partners selected by KAH must be able to successfully transport the food to the children and distribute it properly - along with other services provided for the families being served. The organization reports that in 2011, a total of 40 million KAH meals were packaged by 200,367 volunteers at 94 locations across the U.S. and Canada. The food was distributed in 46 different countries, including Haiti, Honduras, Kenya, the Philippines, and the U.S.

For the year ended December 31, 2011, KAH's program expenses were:

  
Program services 2,843,889
Total Program Expenses: $2,843,889

Governance & Staff


Chief Executive : Mike Lloyd, Executive Director
Compensation*: 
$66,310

Chair of the Board: Richard Proudfit
Chair's Profession / Business Affiliation: Founder/President of Kids Against Hunger, Inc.

Board Size: 9

Paid Staff Size: 16

*2011 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.

Fund Raising


Method(s) Used:

Direct mail, print advertisements, television, radio, and Internet appeals.
Fund raising costs were 12% of related contributions. (Related contributions, which totaled $1,478,626, are donations received as a result of fund raising activities.)

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 KAH's audited financial statements for the year ended December 31, 2011.

Source of Funds  
Sale of product 1,734,868
Contributions 1,395,593
Donated materials, services, and salaries 80,798
Rental income 12,300
Interest income 5,646
Donated property and equipment 2,235
Total Income $3,231,440


chart



Uses of Funds as a % of Total Expenses

Programs: 89%  Fund Raising: 6%  Administrative: 5% 

Total income $3,231,440
Program expenses $2,843,889
Fund raising expenses 178,086
Administrative expenses 154,475
Total expenses $3,176,450
Income in Excess of Expenses 54,990
Beginning net assets 128,810
Other Changes in Net Assets 9,372
Ending net assets 193,172
Total liabilities 1,251,011
Total assets $1,444,183

Note1: According to KAH's 2011 audited financial statements, the organization received in-kind contributions in the amount of $83,033 including materials, services and salaries ($80,798) and property and equipment ($2,235).

Note2: In the financial section above, "other changes in net assets" refers to a forgiveness of principal on long-term debt ($40,000) and a loss on sale of building held for sale (-$30,628).

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.

Close

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.

Close

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.

Close

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.

The organization meets this standard.

Close

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.

Close

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.

Close

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.

The organization meets this standard.

Close

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.

The organization meets this standard.

Close

Standard 8: Program Service Expense Ratio

Description:

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

The organization meets this standard.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

Close

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.

×