Spotlight on Charity: Is Alexandria, VA the Charity Capital of America?

There must be something in the water – gold perhaps – in Alexandria, Virginia.  Not only do the city’s residents rank among the top 1% nationally in terms of charitable giving, but the three largest U.S. charities – United Way, The Salvation Army, and Catholic Charities USA – are all based there.  So, what makes this particular area about six miles south of the Nation’s Capital the charity capital of the U.S.?

“[It’s] likely nothing specific to Alexandria, VA, but not entirely coincidental given its proximity to Washington, DC, which may be attractive to non-profits seeking to stay on top of legislature, lobbying, etc.,” says Karen Winterich, an assistant professor at Penn State who studies charitable giving and consumer decision-making.  “However, each of these big 3 have a strong presence in local communities across the country. These local roots, rather than the city of headquarters, are most likely what leads to success given that people tend to donate to organizations with which they feel closest.”

Well, Alexandria residents need not only feel close to the country’s biggest and perhaps best known charitable organizations; they literally are close.  But still, the fact that Alexandria is among the most affluent cities in the country probably has more to do with the giving nature of its residents than simple geography.

While Alexandria ranks 116^th out of the 11,522 towns in the U.S., based on total charitable giving – residents donated $110.5 million in 2008, according to the Chronicle of Philanthropy’s most recent “How America Gives” report – the underlying numbers aren’t quite as impressive.

• $2,554 – The median charitable contribution from Alexandria residents ranks 4,339^th nationally.  The national average is $2,564.

• 5.0% – The percent of income given by Alexandria residents ranks 3,459^th nationally.  The national average is 4.7%.

Nevertheless, it’s especially important to focus on this area and the major charities that call it home as the era of social giving kicks into high gear.

There have recently been a number of high-profile cases involving fraudsters passing themselves off as fundraisers for disaster relief or terrorism victims in order to con well-meaning people out of their hard-earned money, often via scam websites or e-mail solicitations. Experts say one of the best ways to avoid falling victim to such con artists is to donate to large, reputable charities about which there is a multitude of publicly available information.

So, with that said, let’s take a closer look at how each of Alexandria’s Big 3 charities operates.

United Way

While some folks may only know the United Way as one of the National Football League’s major corporate partners, recently championing the league’s Play 60 initiative designed to help fight childhood obesity, the organization’s reach obviously extends far beyond that.  According to the United Way’s website, its vision is “a world where all individuals and families achieve their human potential through education, income stability and healthy lives,” and its stated mission is to improve lives “by mobilizing the caring power of communities around the world to advance the common good.”

That might be a bit abstract for your taste, but United Way also laid out a 10-year strategic plan back in 2008 that entails:

1. Keeping at least half of the 1.2 million kids who drop out of high school every year in the classroom by leveraging community support, strengthening public school systems, and fostering early intervention programs.




2. Putting half of the roughly 3.8 million financially unstable low-income American families “on the road to economic independence” via its Financial Stability Partnership, which fosters community programs designed to help families meet their immediate financial needs as well as effectively plan for the future.




3. Increasing the number of young people who are healthy and avoid risky behavior by one-third through health awareness campaigns and healthcare policy initiatives.

Those are certainly noble goals, but much like it’s important to take a look under the hood when buying a car, it’s essential to familiarize yourself with a charity’s underlying operations before making a donation.

Charity Navigator – self-described as “America’s largest independent charity evaluator” – maintains a great deal of information about U.S. charitable organizations, ultimately ranking them based on their overall finance performance as well as their transparency and accountability.  In other words, does the charity in question use the majority of its funds for its stated objective and how forthcoming is it about its practices?

United Way scored high in both regards, earning a score of 64/70 for financial performance and a perfect 70/70 for transparency.  Overall, Charity Navigator gives United Way four stars and a total score of 65.75/70.

Here’s a detailed look at how United Way used the more than $94 million in revenue it earned through donations, program operations, and other means for the fiscal year ending in Dec. 2011 – the most recent year for which data is yet available:

In addition, United Way’s stellar transparency score is largely due to the fact that it has the following:

• Independent voting board members who are not compensated.

• Publicly available information about the CEO’s salary (as well as a documented process by which it determines such compensation).

• Conflict of interest, whistleblower, and records & retention policies.

• Information about board members, donor privacy, and independently audited financials on its website.

In short, this information reveals that the majority of the money people donate to United Way finds its way to those in need in order to further the organization’s aforementioned stated objectives.

The Salvation Army

Perhaps you’ve purchased something at a Salvation Army store, but aside from offering the ability to find hidden gems at thrift store prices, do you know what these merchants do and why they’re around?

Well, not only are The Salvation Army's 119 Adult Rehabilitation Centers funded entirely by proceeds from the organization’s Family Stores, but they also offer work-therapy opportunities for men and women across the country who are in need of help dealing with substance abuse problems, legal issues, unhealthy relationships, homelessness, and/or unemployment.

These efforts are only a small part of The Salvation Army’s overarching mission, however.  According to the organization’s website, “The Salvation Army, an international movement, is an evangelical part of the universal Christian church.  Its message is based on the Bible.  Its ministry is motivated by the love of God.  Its mission is to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination.”

Regardless of how you view the organization’s religious foundations, you need not be a Christian to support its day-to-day work.  The Salvation Army’s reach stretches all the way from disaster relief to the fight against human trafficking, offering a multitude of different services to people in need – regardless of faith, race, or background.  These services include:

• Salvation Army Ray and Joan Kroc Corps Community Centers:  By the end of 2013, there will be 27 Salvation Army community centers across the country.  These centers serve as a place of refuge and growth for local citizens, offering recreational activities, computer labs, and learning opportunities.

• Youth Camps:  The Salvation Army hosts youth camps each summer where kids from low-income families can enjoy traditional summer camp activities like swimming and arts and crafts under the supervision of counselors trained to meet their unique emotional needs.

• Other Youth Services:  Salvation Army affiliates also offer year-round programs such as Sunday School, family counseling, and arts classes.

• Prisoner Rehabilitation:  The Salvation Army works directly with prison systems to offer pre-release job training, correspondence-based Bible study, and employment opportunities for individuals on parole.  In many cases, parolees are released directly into the custody of The Salvation Army.

• Drug and Alcohol Rehabilitation:  The Salvation Army Adult Rehabilitation Center ministries offer folks a place to live, work, interact, receive counseling, and foster basic life skills.

• Human Trafficking Prevention:  The Salvation Army works to build awareness about the troubling international issue of people being forced into what amounts to slavery in the interest of low-cost labor or prostitution.  It also provides rehabilitation services to the lucky few who escape the grasp of that world.

• Christmas Charity:  You’ve probably seen Salvation Army volunteers (often disguised as Santa Claus), ringing their bells to solicit donations into their iconic “red kettles.”  The Salvation Army uses these donations to provide families in need with clothing, food, and toys during the holiday season.

• Elderly Services:  The Salvation Army offers housing, food, day care, and social activities for elderly people across America.

• Community Care Ministries:  These local centers train volunteers to help promote the organization’s mission and values.

It clearly takes a lot to keep all of these programs in operation, and The Salvation Army’s expenses totaled $3.23 billion in 2011.  And while Charity Navigator does not keep records on religious non-profits like The Salvation Army, the organization’s website offers an overview of its financials.

As you can see from the above graphic, roughly 82% of its 2011 spending went toward program services, while $380 million was used for management and general expenses and $196 million was spent on fundraising.  The report also notes that, “We pledge to maintain the highest standards of financial accountability to earn your continued trust. To that end, Salvation Army centers are audited by independent certified public accountants in accordance with generally accepted accounting principles.”

Interested donors should check out these statements before contributing through any of the myriad means of donation The Salvation Army accepts – from airline miles and stock to cash and clothing.

Catholic Charities USA

“Catholic Charities USA (CCUSA) serves as the voice of those living in poverty, calling for more effective and efficient poverty relief solutions and convening thought leaders from across the public, private and nonprofit sectors to identify pathways out of poverty,” according to the organization’s website.

In addition to these overarching policy-based initiatives, CCUSA also “supports Catholic Charities agencies by enhancing the delivery of quality human services, strengthening Catholic identity and parish engagement, building up leadership and organizational capacity, and fortifying disaster preparedness, response, and recovery.”

In other words, it is a faith-based charitable organization that also works to combat poverty and minimize the impact of so-called “acts of God.”  Specifically, it does so via the following programs:

• Adoption Counseling:  CCUSA affiliates offer pregnancy counseling and adoption services to expectant mothers and their families across the country.

• Disaster Relief:  CCUSA coordinates the Catholic Church’s disaster response to administers relief funds to local service providers.

• Family Strengthening:  Each year, CCUSA awards three of its affiliates with $25,000 grants in recognition of outstanding programs designed to promote “strong, capable, and economically successful families.”

• Housing Assistance:  CCUSA’s Housing Counseling Program is comprised of 30 sub-agencies in cities across the country, which offer counseling on mortgage delinquency and reverse mortgages as well as administer Mortgage Modification and Mortgage Scams Assistance Grants as intermediaries for the U.S. Department of Housing and Urban Development.

• Issues Awareness:   CCUSA helps its local subsidiaries implement awareness programs about issues like climate change, human trafficking, and racial equality and diversity.

Interestingly, Charity Navigator does track information about CCUSA’s financials.  As was the case with United Way, it gave CCUSA four stars overall.  The overall score given to Catholic Charities USA – 60.15 / 70 – is much lower than United Way’s (65.75), however, as were its individual scores for financial performance (57.96 vs. 64) and transparency (63 vs. 70).

Here’s a look at how Catholic Charities USA used the more than $39 million in revenue it earned through donations, program operations, and other means for the fiscal year ending in Dec. 2011 – the most recent year for which data is yet available:

In addition, the organization’s fairly high transparency score is largely due to the fact that it has the following:

• Independent voting board members who are not compensated.

• Publicly available information about the CEO’s salary (as well as a documented process by which it determines such compensation).

• Conflict of interest, whistleblower, and records & retention policies.

• Information about board members, donor privacy, and independently audited financials on its website.

However, CCUSA was ranked lower in this category than United Way due to the fact that it neither provided an advance copy of its Form 990 tax filing to its governing body, nor makes a donor privacy policy easy to find on its website.

Ultimately, it seems that while Catholic Charities USA does a lot of good things that anybody can get behind, its name and some of its activities might turn-off many non-Catholics, especially given that other organizations attribute more of their revenues to charitable endeavors and are somewhat more transparent about their operations.

Final Thoughts

The organizations to which one chooses to donate money, the amounts they give, and why they do so depend a lot on personal preference as well as other financial and economic factors.  Nevertheless, it’s undoubtedly important to do your homework before giving, and Alexandria, VA is a great place to start your search given that three of the largest charitable organizations in the country call it home.