When you are considering making a donation to a nonprofit, independent groups like GuideStar, Charity Navigator and the Better Business Bureau’s Wise Giving Alliance at Give.org can provide valuable charity ratings information to help you decide the best charities to donate to.
For every $1 donated, 88 cents goes directly to children
Most years, UNICEF USA has received the highest charity rating marks for accountability and transparency from Charity Navigator. UNICEF USA has also been awarded GlobalGiving’s Superstar status for demonstrating the highest level of engagement and/or effectiveness. Our program expense ratio of 88.4 percent means we are a highly efficient charity.
For every dollar spent, about 88 cents goes directly toward helping children, 8 cents covers fundraising costs and about 3 cents covers administrative expenses.
To make the most of charity evaluations like these, it is important to understand how the charity ratings methodologies work and how well they apply to the unique structure, governance and operating conditions of the nonprofits ranked.
Sometimes a combination of factors can cause a disconnect between the metrics Charity Navigator uses to rate nonprofits and their commitment to their missions and values.
Liquidity and UNICEF USA’s mission
A measure of a charity’s financial health is whether it has the liquidity to weather an economic downturn. This is one of the important metrics Charity Navigator uses to rate nonprofits like UNICEF USA.
But when so many millions of the world’s children are endangered by war, disease, poverty and climate change, UNICEF USA looks at its cash reserves differently; if the choice is between keeping money in the bank and sending water, nutrition and medical supplies out into the field, children will always come first. That approach is core to UNICEF USA’s mission. In some years that means that cash in reserve falls short of Charity Navigator’s preferred ratio.
How UNICEF USA sees liabilities versus assets
Charity Navigator’s preferred liabilities to assets ratio is an important metric. It cannot fully measure the value of two crucial strategic decisions UNICEF USA has made in recent years that have drastically improved both its capacity and sustainability.
Operating a nonprofit in New York City is tremendously costly. The per-square-foot cost of office space is among the highest in the nation. To reduce monthly costs and build long-term equity, UNICEF USA financed — via bond financing — the purchase of the three floors it occupies in lower Manhattan.
The bond on UNICEF USA’s New York City office space is a liability on its balance sheet. Owning Manhattan real estate is a major asset, which UNICEF USA capitalizes upon in order to work more efficiently and effectively. The savings on a high-priced office-space rental has allowed UNICEF USA to free up capital for its mission for children.
UNICEF USA’s innovative Impact Fund for Children
UNICEF USA is always on the lookout for new, strategic ways to generate flexible funding for whenever and wherever children need help. The UNICEF USA Impact Fund for Children (IF4C) is just one tactic UNICEF USA has innovated to meet that need.
IF4C is a tax-exempt affiliate (subsidiary) organization of UNICEF USA — an impact investing arm with two funds under management: the Bridge Fund and the Fast Fund. IF4C is designed to remove financial obstacles when quick action means the difference between life and death.
Such was the case when the pandemic struck. IF4C was critical in UNICEF's COVID-19 rapid response, bridging $10 million in funding to accelerate the procurement and supply of PPE to frontline healthcare workers globally, in advance of UNICEF receiving donations. Before COVID-19 was declared a pandemic, and even before it was declared an international emergency, UNICEF had already delivered 6 tons of medical supplies to China to fight the outbreak. IF4C continues to help UNICEF speed-deliver services, supplies and vaccines to the most remote corners of the globe. Further, each $1 invested in IF4C yields up to $18 in supplies for those who need it the most.
Strengthening global and equitable COVID-19 response
The benefit to children since UNICEF USA began its impact fund 2011 has been tremendous. Yet, the source of these revolving funds — 3-year and 5-year loans that are secured by net worth grants to UNICEF USA — appears on the accounting ledger as debt. In some fiscal years, that has counted against UNICEF USA’s Charity Navigator charity rating, and UNICEF USA’s four-star rating has dropped to three.
What remains constant is UNICEF USA’s sustained, full-fledged and cost-effective commitment to helping children survive and thrive.
Top photo: Health supplies arrive in Nigeria to support COVID-19 response efforts. UNICEF hosts the largest humanitarian supply warehouse in the world that can deliver lifesaving supplies to anywhere within 72 hours. ©UNICEF/UNI322101