I’m starting to sound like a broken record here. The Injured Police Officers Fund, the Las Vegas-based charity that covers certain out-of-pocket expenses for families of fallen law enforcement personnel in southern Nevada, continues to have an overhead problem. In its latest public tax filing, for calendar year 2019, the nonprofit spent more on accounting alone than it handed out to families.
According to the filing, IPOF made a total of $26,266 in grants to 15 recipients. The charity spent $30,600 on accounting.
Accounting, of course, is only one part of overhead, some of which is necessary for any organization. But according to IPOF’s own filing, the agency during the year spent a total of $183,987, but only $46,694 (including the grants) in direct furtherance of the stated mission. The remaining $137,293 went for fundraising and other overhead (including the accounting). That works out to a charitable commitment ratio–the percent of total expenses spent directly on the mission–of 25%. Charitable watchdogs say the minimum for any charity that raises money from the public should be 65%. Over the last 19 years, IPOF’s charitable commitment ratio has averaged 50% and has topped 65% only twice.
Since becoming New To Seattle in 2016, I’ve written annually about IPOF. Each time I’ve become more critical, due to my analysis of its financial efficiencies, sometimes hard-to-understand accounting and lack of financial transparency.
Founded in 1982, IPOF is run by a volunteer board representing more than a dozen law-enforcement agencies in southern Nevada. IPOF is a fully qualified 501(c)(3) and contributions it receives are tax-deductible by the donor.
The charity is still a cut above most law-enforcement-themed charities, whose operations often border on outright scammery. Unlike many of those outfits, IPOF in the past did not spend most of the money raised in raising it, since it avoided expensive direct mail and outside paid telemarketing. The charity does no direct solicitation, relying on proceeds from several fundraising events, a few large donations, and whatever came in from the public, often after news media accounts of a wounded officer. In most years, including the last four through 2018, IPOF had zero fundraising expense.
But in 2019, IPOF tripled the salary and accompanying statutory benefits of its one paid employee, from $21,530 to $63,341, and classified the increase as fundraising expense. This had the impact of generating a fundraising expense of $41,811. This not only dwarfed the amount of grants given out, but consumed most of the $50,816 received as contributions and net special event revenue (itself a big drop from $315,689 in 2018).
As a result the fundraising efficiency ratio–another standard analytical measure defined as the percent of contributions remaining after cost of fundraising–fell from 100% in 2018 to 18% in 2019. Again, the charitable watchdogs say the minimum should be 65%.
IPOF is not all that dependent on annual contributions. At the end of 2019 it had managed to build up net assets of $1.9 million–all cash and investments. Indeed, the charity during 2019 had a realized investment return of nearly $100,000, nearly double the amount of contributions received and four times the amount of grants handed out.
Financial results of IPOF for 2020 won’t be known until late next year, after the charity files its Internal Revenue Service Form 990, a public document, and sends me a copy, as it kindly has done for several years. (IPOF does not post its 990 on its website, which many reputable charities do and which the IRS encourages as a best practice but does not mandate, so long as copies are sent to anyone who asks, like me.)
But 2020 has been a hard year for IPOF. Its president, Erik Lloyd, a Las Vegas Metro lieutenant, died of coronavirus in July at age 53. The Las Vegas Sun reported earlier this month that Lloyd was the only Nevada law enforcement officer known to have died of coronavirus. The paper said Metro considered him exposed to the virus in the line of duty, although the story also said a family member had been hospitalized with the virus a week-and-a-half before he was. The family member survived.
I welcome comments below on any of these issues, if for no other reason than to break up the monotony of my repetitive sound.