Salvation Army Response to MoneySense 2012 Charity 100 Report

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The magazine MoneySense publishes an annual review of charities, the goal of which is “to provide Canadians with the information they need to make smart giving decisions.”

While it is very important for donors to do their homework before giving to any charity, The Salvation Army rejects the analysis presented by MoneySense. The structure and governance of each charity differs and the “one size fits all” approach of this report does not present all of the facts, making it misleading to the public.

On MoneySense’s website, the 2012 Charity 100 report gives The Salvation Army Territorial Headquarters (THQ) an overall grade of “C”. The problem with this evaluation is that MoneySense only draws its information from one of The Salvation Army’s many charity information (T3010) returns that have been filed with the Canada Revenue Agency (CRA). Further, the return MoneySense uses is for our Territoral Headquarters, an office which serves a primarily administrative function. All 400+ Salvation Army operations across the country file independent T3010 returns with the CRA, so in order to accurately portray the organization’s finances, any evaluation must include all of these units. By only reviewing one return, MoneySense is drawing erroneous conclusions about Salvation Army operations in Canada. This issue has been raised with MoneySense repeatedly in the past, but they have refused to alter their approach, effectively negating the value of their information.

In order to provide a clear picture of its operations in Canada, The Salvation Army started preparing audited consolidated financial statements for the fiscal year ending March 31, 2011. These statements are available at www.SalvationArmy.ca and reflect all of the assets, liabilities, fund balances, revenues and expenses for the entire group of 400 units and all controlled entities, both incorporated and unincorporated.

Were MoneySense to rely on the Army’s consolidated financial statements, the resulting grade would be drastically different. For example:

On Reserve Fund Size, MoneySense gives the Army a grade of “C”, based on its conclusion that the Army has had sufficient reserves to fund operations for three years, eight months. Based on our audited consolidated financial statements, as of March 2012, The Salvation Army has sufficient reserves to fund the charitable activities for one year, four months, which warrants a higher grade based on the MoneySense methodology.

On Overall Charity Efficiency, MoneySense gives The Salvation Army a “D”, based on its conclusion that only 62.7 percent of funds raised are used for charitable programs. In actuality, the 2011-12 consolidated financial statements show that 86 percentof every dollar raised goes to fund programs and services, moving the Army into MoneySense’s top category for charitable efficiency.

MoneySense gives the Army a “C” on governance and transparency. The 2011-12 audited consolidated financial statements posted online at www.salvationarmy.ca/annualreview contain a wealth of information and set the bar for openness and transparency.

As always, if you have any question about your donation, please contact at donor_questions@can.salvationarmy.org

Thank you for your continued support of the work of The Salvation Army. We are always grateful for your generosity and recognize that without you, we would not have been able to help 1.8 million people last year in Canada.

 

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