Two donors to World Help say they didn’t give, in addition to World Help saying it overstated revenue

That’s the very short version of the report from Doug Donovan and Caroline Preston at The Chronicle of PhilanthropyCharity Lowers Revenue Figure by $135-Million.

World Help will reduce 2011 revenue from $239.3M to $104.1M, a drop of $135.2M.  They will also be revising their 2010 and 2009 tax filings according to the article.

Most of that drop is due to one transaction, a donation from Direct Relief International.  It looks to me like revenue from that contribution will drop from $100.1M to $3.3M, a decline of $96.8M.

Two donors say they didn’t donate

More big news in the article is that two donors say they didn’t send large volumes of GIK to World Help.  From the article:

Two large nonprofits—Catholic Medical Mission Board and Cross International—told The Chronicle they did not make gifts to World Help in the years the Virginia charity reported they did.

Here are the amounts in discussion, again from the article:

The change follows a Chronicle examination of World Help’s tax forms, which identified roughly $350-million in gifts over three years from groups that said they had never made those donations.

How to get tax returns and audited financial statements

Those are some big numbers, so I pulled together the GIK amounts so I could understand the picture. You can find financial info at the North Carolina AG website.

For your future reference, here is how to get reports. You can go to the AG’s site here.

Enter the organization’s name. Click “search”.  Choose the organization on the next screen. Click “document filings” for a list of documents received for each year.  Click the folder icon to see a list of reports. For 2011 you will find this.

Then click on the PDF icon for the item you want to read.

GIK data

For space limits, I will abbreviate Direct Relief International, Catholic Medical Mission Board, Cross International Catholic Outreach.  Here’s some data from the World Help 2011, 2010, and 2009 990s. I pulled the donor information off Schedule B and the revenue numbers off the Statement of Revenue.  Amounts in millions.

 2011  2010  2009
 DRI          100
 CMMB          106            44            39
 CICO            44            18
 US AID              5
 individual              3
 sched B          206            96            57
 total GIK          227          114            65
 total revenue          239          125            75

So here are the amounts under discussion in the article from Mr. Donovan and Ms. Preston:  They report that Direct Relief only donated meds worth $3.3M. Catholic Medical Mission and Cross International claim they didn’t give those amounts, as reported in the article.

By my calculation, that means the amounts in discussion are 89% of total 2011 GIK, 77% of the 2010 GIK, and 88% of the 2009 GIK.  For the three years, the amount in discussion from the article would be 86% of total GIK and 79% of total revenue.

Here’s the comment I will post at the Chronicle site in a moment:

The president says the total revenue will be reduced by $135M.  The Direct Relief contribution will be $96.8M of that (difference between $100.1 from the 990 and $3.3M mentioned in the article).  That leaves an additional $39M adjustment.

If Catholic Medical Mission Board claims they did not donate $106M as listed in the 2011 990, shouldn’t the adjustment under consideration be something in the range of $213M ($97M + 106M)? Or did I miss something?

One final thought.  The organization’s audited financial statements show humanitarian aid expense of $227M.  I wonder if the organization is giving consideration to advising the recipients of donations that the valuation is high by $135M, or around 59%.  Would that necessitate the revision of other organization’s 990s?

 

Update: 

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5 Responses to Two donors to World Help say they didn’t give, in addition to World Help saying it overstated revenue

  1. […] Two donors to World Help say they didn’t give, in addition to World Help saying it overstated reve… […]

  2. […] Two donors to World Help say they didn’t give, in addition to World Help saying it overstated reve… […]

  3. […] advisory cites an article in the Chronicle of Philanthropy raising questions about the existence of donations totaling $350M over the last three years.  World […]

  4. […] For more background, my previous posts here, here, here, here, and here. […]

  5. […] original donor and ultimate recipient say that charity wasn’t involved. I’ve discussed the World Help financials […]

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