After on-duty police officer Chad Parque in North Las Vegas was killed earlier this month by a wrong-way driver, officials said tax-deductible contributions for the grieving family could go to the Injured Police Officers Fund. The 35-year-old home-grown Clark County nonprofit was even profiled on local TV, albeit with absolutely no detail about the organization’s finances.
Those who have followed my writings over the years know I have found much to criticize about nonprofits that purport to raise money to help injured or deceased folks in uniform such as soldiers and cops. In the nonprofits I have examined, almost all the funds raised have gone for fundraising, overhead and unrelated purposes–everything but for the stated good-works purpose. I regard some of these outfits–and yes, I mean you, National Police and Troopers Association, an arm of the International Union of Police Associations, AFL-CIO–as skanks.
So, still New To Las Vegas, I obtained the latest tax filing of the IPOF. I am happy to report–for a change, really–that the organization is legitimate, its charitable purpose worthy and its means appropriate. But I do have a serious concern about one element of its financial efficiency, along with its transparency.
Unlike the National Police and Troopers Association, the IPOF does not hire outside paid telemarketers who run massive cold-calling campaigns on false pretenses and keep most of the money raised. Rather, the IPOF relies on a few significant donors, several fundraising events a year and small donations that come in the door, often after publicized police tragedies. The IPOF board consists of unpaid representatives from most of the law-enforcement agencies operating in Clark County. This m.o. by itself insures more of the donated funds goes to the stated purpose, which is to “provide financial assistance to families of officers injured or killed in the line of duty.”
For the year ending December 31, 2015 (no filing has been made yet for 2016), the IPOF raised $184,000 in donations and net special events fundraising and reported spending no money in doing so. That’s a fundraising efficiency ratio–the share of donations remaining after subtracting fundraising costs–of 100%. It doesn’t get any higher than that. The $860,000 endowment built up over the years threw off another $70,000 in investment returns. With a minor adjustment, total revenue was $253,000.
On the expense side, the IPOF handed out $71,000 in grants to 10 recipients, and spent another $23,000 classified as program support, for total program support of $94,000. I am not especially bothered that’s barely half of the $184,000 raised in donations. Carnage in some years will be higher than others, and the IPOF is clearly preparing a war chest for the worst.
But a lot more than that $94,000 in program support–$108,000–was spent for management and general expenses, or, as it’s commonly known, overhead. Almost 10% of the total expense was listed as just for accounting! So despite the lack of fundraising expense, the charitable commitment ratio–percent of total expenses spent on program activities–was just 46%.
Now that’s low. How low? So low it violates the standards of the major charity watchdog, the Better Business Bureau Wise Giving Alliance. The BBB says the minimum charitable commitment ratio should be at least 65%. Looking at IPOF tax returns back to 2012, the charitable commitment ratio hasn’t risen above 49% and has been as low as 31%.
Which gets me to the issue of IPOF’s transparency. After my written request, the IPOF sent me its 2015 return; I obtained earlier years on my own from the website of the Foundation Center in far-away New York City. The IPOF doesn’t post its tax returns on its own website and bluntly states in the returns themselves that they are “not made available to the public”–even though by law they are open to public inspection and copying.
To put it mildly, the IPOF approach is not exactly best practices in the charity world. In my experience, which is considerable, most nonprofits–especially legit ones–make tax returns easily available to the public, usually on the Web. Why? (1) IRS rules encourage that, (2) it costs almost nothing to do, and (2) a fuller disclosure tends to increase donor confidence and then contributions.
Also worth noting: The nonprofit spells its name publicly two different ways, Injured Police Officer’s Fund (with an apostrophe, singular) in the banner across its official website, and Injured Police Officers Fund (no apostrophe, plural) in web text, on Facebook and on the formal tax returns. Since they are filed under penalty of perjury. I’m using the plural spelling.
I invite comments below from anyone on points made in this post.
Overall, I find the IPOF, founded in 1982 in response to uninsured expenses of a cop shot in the head during a traffic stop, to be a sincere cut above what I have seen in this sector. But a little more sunshine would be illuminating.