by Robert Docter –
“The Salvation Army last year raised more than $1 billion–far outpacing any other charity in America, according to the Philanthropy 400, The Chronicle’s annual ranking of organizations that receive the most each year in private donations.” So states the “newspaper of the non-profit world,” The Chronicle of Philanthropy, in a major front page story in the October 30 edition.
The publication noted that the Army’s fund raising “has ranked No. 1 for five years in a row and outstripped the American Red Cross, which ranked No. 2 by raising close to $480 million.”
“We have to be deeply humbled by the continued outpouring of confidence, respect and generosity on the part of the American public,” stated Colonel Dennis Phillips, chief secretary, “all of which must heighten our sense of accountability to be the best possible stewards in ministering to the physical and spiritual needs of those thousands of people who rely upon us for survival and salvation. Particularly, as we experience the many ramifications of welfare reform (many still unknown) and daily discover that more and more is expected of us, the support of our friends is of increasing importance.”
The one billion dollar figure represented what appears on paper to be a 36.5 percent increase over the prior year, but which Army finance administrators indicate is actually only a three to four percent increase. The difference occurs because of the Army’s recent switch to new accounting procedures now required of non-profits by the Financial Accounting Standards Board (FASB).
FASB sets the policies followed by most charities and has now been adopted by the Army in order to comply with new audit procedures. These have required major changes in how the organization accounts for pledges, volunteer time and other sources of support which were not included in prior accounting standards. Lt. Colonel Larry Bosh, national treasurer, said that the Army has been working for four years to make the very difficult transition and implement the new standards in its more than 10,000 local settings.
The Chronicle states: “The Salvation Army’s figures show how much of a difference the accounting policies can make.” The Army is now required to count pledges and deferred gifts, which was not done prior to the shift to the FASB standards because it chose to count only actual money in hand.
Salvationists and friends might wonder if their gifts are still needed when the organization seems able to raise such significant amounts. The Chronicle dealt with that question by stating: “The paper increases masks the difficulties The Salvation Army is having as it tries to keep up with requests for food, shelter, and other aid.”
Major Tom Jones, national community relations and development secretary stated: “While we’re seeing slight increases in fund raising, we’re seeing gigantic increases in expenditures and in the number of people coming to the Army for help. In many communities the Army’s finances are stretched to the limit.”
Social service analysts have commented that organizations like the Army will be expected to provide an essential safety net as welfare support is withdrawn from families and children and the newly adopted welfare reform legislation takes hold.
Included as countable gifts are contributions, such as tithing, mail appeals, Christmas kettles, pledges for future gifts, United Way contributions, income from estate bequests and other unsolicited gifts. Not included are government funds in support of specific projects, any fees charged clients for direct service in various programs, and thrift store sales.