Charity Review

Issued: December 2012 Expires: December 2014

Accredited Charity

Feed The Children

Accredited Charity

Meets Standards

405-942-0228 P.O. Box 36
Oklahoma City, OK 73101
www.feedthechildren.org

Conclusions


Feed The Children (FTC) meets the 20 Standards for Charity Accountability.



In reaching the conclusion that FTC meets the BBB Charity Standard (Standard 1) calling for a board of directors that provides adequate oversight of the charity's operartions and staff, the Alliance considered the following comment from FTC, among other things:



"Over the past three years, Feed The Children has taken significant steps to ensure proper board governance and good stewardship of our donors' dollars.... Feed The Children is now being led by Kevin Hagan, the new President and CEO, who has significant experience in transforming organizations and adhering to the highest ethical standards. Additionally, the organization has appointed a new Chief Development Officer, Matt Panos, and a new Chief Marketing and Communications Officer, Corey Gordon, both highly-regarded nonprofit veterans. Governance wise, the organization adopted the 33 Principles of Good Governance and Ethical Practice issued by Independent Sector, and has revised its bylaws to ensure adherence to those principles. The Governance and Nominating Committee, with approval of the Board of Directors, has implemented guidelines regarding the diversity of the Board; professionally and geographically. Additionally, the Board added an investment committee and revitalized the membership of its audit committee to include independent recognized industry professionals; as well as Board Members. Feed The Children also implemented Ethics, Nepotism, Fraternization, and Conflict of Interest policies. The organization has also adopted more rigorous guidelines concerning competitive bidding and legal evaluation, prior to entering into any contractual relationships. Furthermore, to ensure consistent compliance throughout its international offices, Feed The Children developed 40 International Standards containing values and ethical codes of conduct for its international operating entities, and has begun auditing all offices globally against those standards. Finally, Feed The Children is happy to announce that it has also recently met the membership standards of InterAction, the global alliance of international relief agencies, and was admitted to [InterAction] in December 2012."

Complaints

              

Number of complaints processed by the BBB in the last 36 months: 5

FTC addressed the complaint issues brought to its attention: 5
(4 of these complaints involved individuals seeking to have their name and address removed from the organization’s mailing list. There was another complaint concerning a delay in the delivery of goods.)

Purpose

Year, State Incorporated: 1964, Oklahoma

FTC TransportationFTC Transportation

Stated Purpose: "to provide hope and resources for those without life’s essentials."

Programs


FTC receives donations of food, clothing, blankets, and medical supplies and services, and distributes these items to children and their families in the United States and 50 countries worldwide. In the wake of natural and man made disasters around the world, FTC delivers food, shelter and other necessities. FTC also provides training and development programs to communities to generate food and income. As part of its education program, FTC distributes books and educational materials to impoverished areas of the United States and around the world. In FY 2011, FTC reports that it distributed more than 95 million pounds of food and other essentials to children and their families in the United States plus another 9 million pounds internationally. The organization also reports that its feeding programs worldwide provide meals to 350,000 children daily, its education outreach provided 150,000 backpacks filled with school supplies, food and personal care items to homeless students in the U.S. last year, and that its disaster relief program provided more than 60 truckloads and 250,000 shipments of food, personal health items and supplies to victims of tornadoes, floods and other natural disasters. This is accomplished through distribution centers in several states and operations in Africa, Asia, Central America, South America and Haiti.

For the fiscal year ended June 30, 2011, FTC's program expenses were:

  
Childcare, food and medical 245,631,510
Education and community development 111,451,607
Disaster Relief 15,465,033
Total Program Expenses: $372,548,150

Governance & Staff


Chief Executive : Kevin Hagan, President & CEO
Compensation*: 
26,000

Chair of the Board: Rick England
Chair's Profession / Business Affiliation: Automobile dealer

Board Size: 5

Paid Staff Size: 272

*The cited amount was the partial-year compensation during the fiscal year ended June 30, 2011 for the Interim President who no longer works at FTC. The new President & CEO, Kevin Hagan was hired by FTC in 2012.

Fund Raising


Method(s) Used:

direct mail, telephone, print advertisements, television, radio, grant proposals, internet, planned giving arrangements
Fund raising costs were 9% of related contributions. (Related contributions, which totaled $435,064,471, are donations received as a result of fund raising activities.)
FTC incurred joint costs of $1,014,700 for informational materials and activities that included fund raising materials. Of those costs, $798,600 was allocated to program expenses, $114,600 was allocated to administrative expenses and $101,500 was allocated to fund raising 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 FTC's audited financial statements (consolidated) for the fiscal year ended June 30, 2011.

Source of Funds  
Gift-in-kind 358,926,582
Contributions 75,005,197
Investment Income 9,306,850
Transportation service 4,980,095
Government Grants 1,108,910
Gain on disposition of assets 927,175
Other 926,812
Donated Services 123,782
Total Income $451,305,403


chart



Uses of Funds as a % of Total Expenses

Programs: 86%  Fund Raising: 9%  Administrative: 4%  Other Expenses: 1%

Total income $451,305,403
Program expenses $372,548,150
Fund raising expenses 38,191,051
Administrative expenses 19,294,600
Other Expenses 4,685,991
Total expenses $434,719,792
Income in Excess of Expenses 16,585,611
Beginning net assets 163,100,446
Ending net assets 179,686,057
Total liabilities 12,005,088
Total assets $191,691,145

Note 1: FTC's expenses includes the following in-kind activity that was included in FTC's program service expense:
Food $132,284,198
Hygiene items $57,471,204
Drugs and medical supplies $53,957,987
Books and publications $49,918,806
Miscellaneous necessities $18,482,739
Clothing and household goods $17,677,056
School and office supplies $13,149,531
Toys $2,064,241
Donated services $123,782

Note 2: For the fiscal year ended June 30, 2011, FTC reports it distributed 13 million mebednazole (deworming) tablets for a total of $5,131,280 which represents less than 2% of FTC's gifts-in-kind donations in that fiscal year.

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.

The organization meets this standard.

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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.

The organization meets this standard.

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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.

The organization meets this standard.

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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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