In our January issue, Trey Garrison wrote a story about a nonprofit called Star Children’s Charity, whose finances, judging from the group’s 990 filings, aren’t in the best shape. The headline and subhead in the magazine (as opposed to online, where headlines are rewritten to work better with search engines) were: “Party City: How a Collin County charity funded its good times at the expense of needy children.” Money graph:
A look at Star’s most recent IRS Form 990 provides insight. It shows that in 2008 Star brought in $979,081 in donations and grants. It spent $522,554 on administrative costs and fundraising events. So the organization spent 53 cents for every dollar it raised, quite a high figure. The national average is about 20 cents. That year, Star doled out just $367,764 to its partner charities. 2009 was worse. Star doled out only $294,000, and it spent $1.57 for every dollar it raised.
Over the break, I received a letter from Star. Their take:
Your recent article negatively portraying Star Children’s Charity is a disappointment to our Board of Directors, members, sponsors, beneficiaries and so many others in Collin County whose goal it is to make life better for the children of our community.
The accusation that Star is one of the reasons that Crossroads Family Services was folded into Boys and Girls Club is one of several egregious misstatements. The article also infers that Star has not distributed funds to Crossroads. The fact is that we have distributed a total of $661,000 to our beneficiaries including Crossroads.
Star is a well-run volunteer organization led by business owners and leaders, corporate executives and community philanthropists. The cumulative Management and General Expense for our organization is 10% compared to an acceptable industry average of 12% to 20%. Star also compares favorably to the national non-profit benchmarks for the cost to raise a dollar with our expenses for fundraisers between 5 cents to 57 cents for each dollar raised.
But the most disrespectful part of your article was in demeaning the beneficiary agencies. These institutions are known for their stewardship and their integrity and we are grateful to be a part of their important missions for children. We invite your readers to visit our website, starchildrens.com to see for themselves that we are a well managed organization dedicated to providing funding and leadership to important community organizations.
Michelle Brennan Hall, Chairman, Board of Directors
Michael Urtso, Treasurer, Board of Directors
Ronelle Ianace, Executive Director