Pittsburgh region’s philanthropic sector at top of nation’s pack
Large charities in greater Pittsburgh have more assets, bring in more contributions and spend less on fundraising than most of their counterparts nationwide, a charity evaluator found.
This region’s philanthropic sector is slipping, however, when it comes to accountability, transparency and efficiency with donor dollars, according to the 2015 Metro Market Study by New Jersey-based Charity Navigator.
Nonprofit watchdog groups are urging donors to be shrewd and selective in their charitable spending this holiday season, just as nonprofits hope to cash in on the latest post-Thanksgiving occasion to follow Black Friday and Cyber Monday — Giving Tuesday.
Tuesday marks the fourth Giving Tuesday, an effort by New York’s 92nd Street Y and the United Nations Foundation to establish a global day dedicated to giving.
Last year, the campaign funneled to charity almost $46 million — up from $13.5 million its inaugural year in 2012, The Case Foundation reports.
“What’s really important is for people to feel that they’re part of a big initiative,” said Mary Ann McCollough, director of annual giving at Carnegie Mellon University, which has several Giving Tuesday-related events planned via social media and at the University Center. Last year, CMU used the occasion to bring in more than 530 gifts totaling almost $100,000.
More than 30,000 nonprofits, small businesses, government agencies and corporations planned toparticipate in some form in 2015, including more than 50 groups from the Pittsburgh area registered on GivingTuesday.org, the central online donation platform.
Responsible charities take the issue of transparency seriously, and because of that have a “tendency to do a better job and are less likely to misappropriate or misuse funds,” said Michael Thatcher, president and CEO of Charity Navigator, which assigns ratings to 8,000 of the largest charities nationwide using metrics from nonprofit tax forms.
Greater Pittsburgh — which includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties — fell from No. 5 in 2014 to No. 10 in Charity Navigator’s annual report ranking the strength of philanthropic sectors in 30 metro markets.
The Pittsburgh market’s ranking dipped partly because charities here reported a median budget deficit of almost $47,000, compared to a national median surplus of $93,000. Some Pittsburgh charities lost points for scoring poorly on several accountability checks.
Almost one-third of what Charity Navigator identified as the Pittsburgh metro market’s 68 largest charities earned the evaluator’s highest rating of four stars in 2015.
CMU made that elite cut. Among other top-scoring nonprofits: Planned Parenthood of Western PA; Jewish Federation of Greater Pittsburgh; Global Links; Westmoreland County Food Bank; Big Brothers Big Sisters of Greater Pittsburgh; YMCA of Greater Pittsburgh and Pittsburgh Ballet Theatre and the United Ways of Butler and Allegheny counties.
Two nonprofits in the region got Charity Navigator’s lowest rating.
The Pittsburgh Leadership Foundation — a 37-year organization that trains nonprofit and faith-based leaders — received the one-star rating mostly because of financial challenges reflected in its tax year ending June 2014. Charity Navigator gave the foundation a score of 81 in transparency and 54.74 in financial health, citing a 33 percent year-over-year decline in revenue and a $131,000 deficit.
Foundation President Lisa Slayton conceded the nonprofit has struggled financially in recent years amid an overhaul of its operations.
“When you do that and there’s financial challenges in the community coming off the recession, you lose donors,” said Slayton, who makes about $65,000 annually. “… I would say we were maybe not the best at communicating some of those changes.”
Slayton expressed confidence that the nonprofit is “on the upswing.”
Donations and earned revenue are climbing, she said, and the foundation is rebuilding neglected ties to the foundation community. The agency will soon publish its latest 990 tax form, which she said will reflect $750,000 in revenue and no deficit.
The second lowest-rated Pittsburgh metro market charity evaluated by Charity Navigator was Cornerstone TeleVision Network, a Christian TV broadcasting station based in Wall. It scored a 68.03 in financial health and 63 in transparency.
The station is confronting technological and strategic changes, but its president and CEO, Donald Black, said it is not in dire financial straits.
“We are not facing any funding emergencies, but we do not have a surplus,” said Black, who made $150,000 in 2014, the latest tax forms available show. “Cornerstone is dedicated to the highest standards of donor accountability.”
Telling the full story
Pieces of the Charity Navigator report may be deceiving, Slayton said. It doesn’t take into account, for instance, that the Pittsburgh Leadership Foundation set aside about $300,000 in unrestricted revenue in a side organization, the Pittsburgh Leadership Endowment Fund.
The rating page won’t explain to donors that in recent years, the foundation has been shifting away from serving as an umbrella for groups such as Education Partnership and Amachi Pittsburgh — a strategic move to be leaner and more focused in the long term.
“The ratings themselves are a guideline. Do they appear to be financially stable? Are they running a huge deficit?” Thatcher said. “What I really want to see is if they’re actually showing me some of the results and course corrections that they have taken along the way.”
Cornerstone has made several changes to its bylaws that are not reflected on Charity Navigator’s summary, Black said. It has an independent board that rotates members; lists board members and key staffers on its website ; and uses an independent compensation committee to set executive pay — all transparency flags raised by Charity Navigator.
“We’d like to maximize the donor money for the mission,” Black said.
Natasha Lindstrom is a staff writer for Trib Total Media. She can be reached at 412-380-8514 or [email protected]