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  • NRS Form 990 Report for 2007

    The National Rosacea Society's Form 990 for 2007 has just been released and you can download a copy from the NRS web site at this url:

    http://www.rosacea.org/about/nrs_990_2007.pdf

    The report shows that this year the NRS received $824,986 in donations and spent $100,000 on rosacea research which is just over 12% of the total donations which is the second highest percentage spent on rosacea research since the NRS began doing research in 1998. This is an improvement. The report continues to show that two of the three highest paid independent contractors used by the NRS, Glendale Communications Group, Inc., and Park Mailing and Fulfillment, Inc., an affiliate of Glendale, received in 2007 $529,964 which is 64% of the total donations received. This is 3% more than 2006 and whether this is an improvement for the NRS or Glendale you be the judge. Glendale is owned by Sam Huff who is the director of the NRS.

    The NRS has received in donations from 1998 thru 2007 $7,805,271. Over this same period (1998 thru 2007) a total of $4,769,670 (61%) the NRS has spent on two independent contractors, Glendale Communcations Group, Inc., of Barrington, Illoinois which is owned by Sam Huff and another independent contractor, Park Mailing and Fulfillment, Inc., which is an affiliate of Glendale.

    For the years 1998 thru 2007 the NRS has received in donations a total of $7,805,271 and spent a total of $785,746 on rosacea research. That means that about 10% of total donations was spent on research. That means that of every dollar donated to the NRS about ten cents is spent on research.
    Last edited by Brady Barrows; 5 August 2008, 05:12 AM.
    Brady Barrows
    Blog - Join the RRDi



  • #2
    Brady

    How does this compare with other similar organisations?

    Sarah

    Comment


    • #3
      and what are the other 90% spent on?

      Comment


      • #4
        The salaries for the employees and independent contractors Eric.

        That's a good question Sarah about how it compares to other organisations but I have to say I don't think it compares well. When I donate to charities/organisations I always check what percentage is going to the actual cause. 10% sucks. I always aim for above 70% if possible with some exceptions but I would NOT donate to an organisation that spent a mere 10% on the cause I was donating to.

        Thanks Brady for sharing the info with us.

        Melissa

        Comment


        • #5
          other non profits

          Originally posted by phlika29 View Post
          Brady

          How does this compare with other similar organisations?

          Sarah
          Sarah,
          A good place to start to compare non profits are the following links:

          http://guidestar.org
          http://en.wikipedia.org/wiki/Non-profit_organization
          http://www.gsb.stanford.edu/csi/research/spen.html

          Most people have very little knowledge of how non profits work. The basic difference between a non profit and a profit organization is that donations are tax deductable. The IRS approves whether a non profit qualifies for this designation. It is absolutely legal what the NRS does. Many non profits pay huge salaries to the board members or the chief executive officers or to independent private contractors that are owned by the board members. Before giving a dime to any non profit it is a good idea to look at the Form 990 that is required by law for any non profit organization to file with the IRS if the organization receives more than $25,000 in a given year. Form 990 shows how the organization spends the donations.

          The basic two types of non profits are a closed board non profit organization like the NRS and a member board organization that the members elect the board members like the RRDi:

          http://www.irosacea.org

          With a closed board non profit there is nothing anyone can do about changing the board of directors. With a member driven board the members can replace the board members and have accountability to the members. My opinion is that while the NRS has done some good for rosaceans there is an obvious special interest between how the NRS spends its donations on independent contractors and who sits on the board of directors. There are better ways this money could be spent. However, because the organization is a closed board there is nothing anyone can do about it. That is why I set up the RRDi which is a member driven non profit organization. The members have a say in how the board operates.
          Brady Barrows
          Blog - Join the RRDi


          Comment


          • #6
            form 990

            Originally posted by Eric View Post
            and what are the other 90% spent on?
            Eric,

            Take 15 minutes and download the form 990 and see where the money goes. Every person has a right to see the Form 990 that a non profit organization in the USA has to file to the IRS. Donating to a non profit organization and not looking at form 990 is what most people do. I suggest everyone everyone look BEFORE donating. It might give you an idea of what the non profit organization is doing.
            Brady Barrows
            Blog - Join the RRDi


            Comment


            • #7
              form 990

              Just my opinion of course !
              It seems a lot of wasted money spent on useless research only to eventually find that fat causes
              rosacea and other skin related problems.

              Comment


              • #8
                It seems that you can allocate 100% of what you donate to go where you want it to when you donate to the NRS. So, I just wanted to share that info with you guys. When I donate to any charity I always spell out where I want the money to go. Usually I write where it is most needed but sometimes I am more explicit. So, if you wanted to donate to NRS you could just say exactly where you want that money spent.

                Comment


                • #9
                  This is a thread where I have some expertise. As a CPA, I'm familiar with Form 990s (I've prepared more than a few). I didn't review the return in exhaustive detail, but my conclusion is that overhead/fundraising is not unreasonable. (I have absolutely no affiliation with the organization.)

                  On the first page, this is the expenditure breakdown: $706K for Program Services, $72K for Management and general, and $62K for Fundraising. With total expenditures equal to $839K, the percentages are 84% going for Program Services, 9% for Management and general, and 7% for Fundraising. This is a good result.

                  The $100K in grants is relatively small part of Program Services. Page 3 of the return shows how the total $706K was spent, i.e. $76K for Medical Scientific Education, $157K for Public Awareness, $357K for Public Education, and $114K for Grants ($100K was awarded to recipients with the remainder for associated expenses). Footnotes starting on page 23 provide specific details for each category of program service.

                  The mission of the organization is shown on page 20. Program service expenditures are consistent with the organization's mission.

                  The return was prepared by an independent organization. I'm guessing the preparer was a lawyer because a CPA would so indicate when signing. For a small organization it isn't unusual for a lawyer to prepare the return.

                  The disclosure on page 26 is an area of possible concern. Three of the directors are employed by Glendale Communications which received $421K from the organization (just about 50% of total expenditures). Moreover, those three directors are also the officers, i.e. President, Treasurer, and Secretary. The disclosure states that those directors abstain from voting on an issue affecting Glendale and that a board committee closely monitors all expenditures to Glendale (there are 4 additional directors). Theoretically, this should take care of any conflict of interest, but I think it would be more seemly if these individuals were not officers. I'm not alleging anything improper is going on. But some might see it as the appearance of a conflict of interest.

                  There was no detail on where contributions (revenue) came from. Schedule B (page 17) doesn't include Part I and II which discloses who contributed $5K or more. I suppose it is possible that no one contributed $5K, but if I were preparing the return I would so state. Given the amount of revenue, it is surprising that no one would have contributed at least $5K, but I suppose that may be the case.

                  Glendale Communications has a website. Many of Glendale's clients are pharmaceutical companies (some of which may have a rosacea product). What this suggests to me: Aside from the grants, the organization may be a means to get the message out for their clients' products (look at the program services categories). There is nothing underhanded about that. Many non-profits do that sort of thing. Everyone with rosacea will be extremely grateful to the pharmaceutical company that comes up with a better product, if not cure. I won't begrudge any pharmaceutical company that earns a healthy profit (but not obscene profit) from a product that helps me.
                  Last edited by GuyinLA; 6 August 2008, 01:34 AM.

                  Comment


                  • #10
                    Thanks GuyinLa for interpreting this for us. I think this paints a much more positive and perhaps objective picture of the NRS than originally posted.


                    The disclosure on page 26 is an area of possible concern. Three of the directors are employed by Glendale Communications which received $421K from the organization (just about 50% of total expenditures). Moreover, those three directors are also the officers, i.e. President, Treasurer, and Secretary.
                    I do find that to be somewhat troubling but your explanation makes me feel more positive about the NRS.

                    Thanks again for your time interpreting this for us GuyinLA!

                    Best wishes,
                    Melissa

                    Comment


                    • #11
                      stipulated donations

                      Originally posted by melissawohl View Post
                      It seems that you can allocate 100% of what you donate to go where you want it to when you donate to the NRS. So, I just wanted to share that info with you guys. When I donate to any charity I always spell out where I want the money to go. Usually I write where it is most needed but sometimes I am more explicit. So, if you wanted to donate to NRS you could just say exactly where you want that money spent.
                      Mellisa,

                      You are correct that you can allocate 100% of what you donate to go where you want it to when you donate. However, as you point out, not everyone knows this anymore than how a non profit spends its funds. For example, if you download the Form 990 (the initial post) and read the 'FACTS AND CIRCUMSTANCES,' page 1 (toward the end of the form), it says "Between January 1, 2OO4 and December 31, 2007, the Society has received an aggregate amount of $684,587 in cash donations and contributions which qualify as 'public support.' This amount constituted 24.63% of the Society's totaI support for the same period, which exceeds the 10% minimum level of public support required by the Regulations." Later on the same page it says, "The Society has received its public support from a Iarge, diverse group of more than 70,000 individuals in relatively small contribution amounts, as well as a growing number of moderate amounts from corporations and foundations."

                      During this same period the NRS spent $382,117 on rosacea research which is only 56% of the total funds received from 'public support' of 70,000 individuals. By the way during this same period the NRS received a total of $2,791,933. The other donors were mostly pharmaceutical companies.

                      So, while you know that a donor can allocate 100% of what you donate to go where you want it to go, say rosacea research, it is quite obvious that most individuals are not aware of this and could care less. Most rosaceans also think that the NRS is doing a wonderful job since 70,000 individuals, who most likely are rosaceans are gladly donating to the NRS. And don't forget that during this same period the RRF gave $18,000 to the NRS which should be deducted from the $382K on rosacea research so the actual amount of public support actually donated to rosacea research would be less. And besides that we have no way of knowing how much was donated to the NRS stipulating that the donation must go to rosacea research. Nevertheless, the amount donated from public support was greater than the amount spent on rosacea research.
                      Brady Barrows
                      Blog - Join the RRDi


                      Comment


                      • #12
                        CPA all the way

                        Originally posted by GuyinLA View Post
                        This is a thread where I have some expertise. As a CPA, I'm familiar with Form 990s (I've prepared more than a few). I didn't review the return in exhaustive detail, but my conclusion is that overhead/fundraising is not unreasonable. (I have absolutely no affiliation with the organization.)
                        GuyinLA CPA,

                        Thanks for your insight and input on this thread. Wish you were volunteering for the RRDi cause we could use a smart CPA like you to do our books and give advice. My understanding of the non profit law is that it is not required to divulge the names of donors nor the sources, only the percentages from the public and from private companies. If the percentage from the public is below 10% the NRS stands to lose its 501 (c) (3) status and will have to file as a different type non profit. The NRS receives approximately 24% from the public and the rest from mostly pharmaceutical companies (there are sources on the web that reveal this and the NRS admits this proudly). What I have discovered is that most rosaceans simply don't care how the NRS spends its funds and feel that the NRS is doing a great job. I feel that if the RRDi had $7.8 million dollars that it would spend 90% on rosacea research and 10% on everything else and not on private contractors since the board of directors are all volunteers who have rosacea. Convincing rosaceans of this is a daunting task. The 70,000 individuals who donated $684,587 between January 1, 2OO4 and December 31, 2007 to the NRS could care less that the board of directors of the NRS do not have rosacea or how the board spends its donations. I think differently about this and have tried to do something about it. By the way, I wrote a letter to the IRS dated December 27, 2005 about whether there was a conflict of interest with the board members and money spent on private contractors and the IRS said thanks for the letter but would not reveal anything to me. The Form 990 for that year was the first year that the salaries of the Glendale employees were divulged and the explanation you mentioned about how the 'independent' board members decide all matters regarding Glendale. All Form 990s before this year didn't reveal anything about this.
                        Brady Barrows
                        Blog - Join the RRDi


                        Comment


                        • #13
                          Originally posted by drums View Post
                          Just my opinion of course !
                          It seems a lot of wasted money spent on useless research only to eventually find that fat causes
                          rosacea and other skin related problems.
                          drums,

                          Just remember that the only ones getting fat in this thread are those without rosacea. And if you are serious, could you please start another thread about this since I haven't a clue what you are talking about. Fat causing rosacea? Please don't discuss this here and start another thread and I will ask you some questions if you are serious. If you are being funny I apologize for taking you seriously.
                          Brady Barrows
                          Blog - Join the RRDi


                          Comment


                          • #14
                            Thanks for the input from GuyinLa and Brady.

                            What I would really like to see is a pie chart. Nice and simple-to see where the money is going.

                            As GuyinLA pointed out some of the money goes on increasing knowledge of rosacea to both the scientific community and the public. Mind you it does seem stupid to spend a larger amount of money educating the public, all they need to do is find all the free groups like ours to educate themselves.

                            Brady-people are interested they just dont have the time to digest documents like this and then find out what they can do about it.

                            Comment


                            • #15
                              Pie Charts

                              Originally posted by phlika29 View Post
                              Thanks for the input from GuyinLa and Brady.

                              What I would really like to see is a pie chart. Nice and simple-to see where the money is going.

                              As GuyinLA pointed out some of the money goes on increasing knowledge of rosacea to both the scientific community and the public. Mind you it does seem stupid to spend a larger amount of money educating the public, all they need to do is find all the free groups like ours to educate themselves.

                              Brady-people are interested they just dont have the time to digest documents like this and then find out what they can do about it.
                              I deal in percentages. The nutshell version:

                              NRS spent:
                              12% on rosacea research

                              64% on Glendale Communications Group, Inc., and Park Mailing and Fulfillment, Inc., an affiliate of Glendale for whatever else the NRS does like educating the public and professionals and having an office, phone, publications, postage, newsletter, web site, etc.

                              8% on D.G. Printing, Inc., for printing

                              16% on Misc like conferences, patient surveys, research workshops, technical exhibits

                              GuyinLA maybe able to make a very nice pie chart since he deals with such things. There is a misleading pie chart on the NRS financial page since it never mentions giving 64% to two private contractors that three of the board members work at and the director owns. Only the Form 990 reveals such things and it is too bad that rosaceans won't take 15 minutes to read a form 990 before they donate. Whenever anyone calls me on the phone for a donation I ask the person to send me Form 990. They haven't a clue what Form 990 is. I ask, are you a non profit organization? They say 'yes.' I then say, ask your supervisor what a form 990 is because I don't donate to any organization without seeing Form 990 first. I never hear from them again.

                              What can rosaceans do about this? They can donate to the NRS or check out a volunteer non profit organization made up of rosaceans who want to spend 90% on rosacea research and 10% on running the organization. How can we do this? Volunteers.

                              http://www.irosacea.org
                              Last edited by Brady Barrows; 6 August 2008, 08:04 AM. Reason: forgot to tell rosaceans what to do
                              Brady Barrows
                              Blog - Join the RRDi


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