Charity Review

  • Issued: August 2017
  • Expires: August 2019

NAACP

Accredited Charity

Meets Standards

877-622-2798

4805 Mount Hope Drive
Baltimore, MD 21215

http://www.naacp.org

877-622-2798

4805 Mount Hope Drive
Baltimore, MD 21215

http://www.naacp.org

Accredited Charity

Meets Standards

Standards For Charity Accountability

Governance

  1. Board Oversight

    Oversight of Operations and Staff: Standard 1

    Description
    Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

    The organization meets this standard.

  2. Board Size

    Number of Board Members: Standard 2

    Description
    Soliciting organizations shall have a board of directors with a minimum of five voting members.

    The organization meets this standard.

  3. Board Meetings

    Frequency and Attendance of Board Meetings: Standard 3

    Description
    An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

    The organization meets this standard.

  4. Board Compensation

    Compensated Board Members: Standard 4

    Description
    Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

    The organization meets this standard.

  5. Conflict of Interest

    Conflict of Interest: Standard 5

    Description
    No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

    The organization meets this standard.

Measuring Effectiveness

  1. Effectiveness Policy

    Board Policy on Effectiveness: Standard 6

    Description
    Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

    The organization meets this standard.

  2. Effectiveness Report

    Board Approval of Written Report on Effectiveness: Standard 7

    Description
    Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

    The organization meets this standard.

Finances

  1. Program Expenses

    Program Service Expense Ratio: Standard 8

    Description
    Spend at least 65% of its total expenses on program activities.

    The organization meets this standard.

  2. Fundraising Expenses

    Fund Raising Expense Ratio: Standard 9

    Description
    Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

    The organization meets this standard.

  3. Accumulating Funds

    Ending Net Assets: Standard 10

    Description
    Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

    The organization meets this standard.

  4. Audit Report

    Financial Statements: Standard 11

    Description
    Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

    The organization meets this standard.

  5. Detailed Expense Breakdown

    Detailed Functional Breakdown of Expenses: Standard 12

    Description
    Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

    The organization meets this standard.

  6. Accurate Expense Reporting

    Accuracy of Expenses in Financial Statements: Standard 13

    Description
    Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

    The organization meets this standard.

  7. Budget Plan

    Budget: Standard 14

    Description
    Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

    The organization meets this standard.

Fundraising & Info

  1. Truthful Materials

    Misleading Appeals: Standard 15

    Description
    Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

    The organization meets this standard.

  2. Annual Report

    Annual Report: Standard 16

    Description
    Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

    The organization meets this standard.

  3. Website Disclosures

    Web Site Disclosures: Standard 17

    Description
    Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

    The organization meets this standard.

  4. Donor Privacy

    Privacy for Written Appeals & Internet Privacy: Standard 18

    Description
    Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

    The organization meets this standard.

  5. Cause Marketing Disclosures

    Cause Related Marketing: Standard 19

    Description
    Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

    The organization meets this standard.

  6. Complaints

    Complaints: Standard 20

    Description
    Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.

    The organization meets this standard.

Conclusion

Purpose

  • Year, State Incorporated

    1909, New York

  • Also Known As

    National Association for the Advancement of Colored People

  • Affiliates

    Crisis Publishing Company
    NAACP Foundation, formally NAACP - Special Contribution Fund
    NAACP Legal Defense and Educational Fund
    NAACP Voter Fund

  • Stated Purpose

    "to ensure the political, educational, social, and economic equality of rights of all persons and to eliminate race-based discrimination."

Programs

NAACP’s principal objectives are to improve the political, educational, social and economic status of minority groups; eliminate racial prejudices; keep the public aware of the adverse effects of racial discrimination; and to take lawful actions to eliminate such discrimination. The organization works through a nationwide network that includes seven regions, representing over 2,000 units, including approximately 400 youth council chapters. The field operations of the state conferences and local units provide advocacy for legislative and policy changes to advance the mission of NAACP. In 2015, field operations assisted with the America’s Journey for Justice, which was a 1,002 mile march from Selma, Alabama to Washington, DC. The organization reports that it was joined by 50 coalition members that conducted 43 teach-ins and held an advocacy day on Capitol Hill. NAACP also reports that more than 500 coalition members met with 75 different elected officials to push for restoring the Voting Rights Act through stronger legislation. In addition, NAACP reports that its Six Game Changers address the major areas of inequality facing African Americans that are the focus of the organization’s work: economic sustainability, education, Health (including Environmental and Climate Justice), Public Safety and Criminal Justice, Voting Rights and Political Representation, and Expanding Youth and Young Adult Engagement.

For the year ended December 31, 2015, NAACP's program expenses were:

Membership services 1,773,673
Field operations 4,253,690
Convention 3,200,725
Image Awards 1,992,802
Leaderhip 500 Summit 412,270
ACT-SO 1,164,388
Legal programs and fellows 781,845
Direct issue education 420,862
Program operations 1,724,004
Research and policy 1,033,312
Education 541,780
Health 931,616
Economic development 1,523,507
Climate justice 493,682
Criminal justice 223,174
Human rights/Voting rights 713,498
Total Program Expenses: $21,184,828

Governance & Staff

  • Chief Executive

    Derrick Johnson, Interim President and CEO

  • Compensation*

    $300,000

  • Chair of the Board

    Leon W. Russell

  • Chair's Profession / Business Affiliation

    Retired, Director of the Office of Human Rights for Pinellas County Government

  • Board Size

    64

  • Paid Staff Size

    104

*2017 compensation, as reported by the charity, includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances. Note: In July 2017, Derrick Johnson became the Interim President and CEO. Prior to Mr. Johnson, Cornell William Brooks served as President and CEO and received compensation totaling $301,638 in 2015.

Fundraising

Method(s) Used:

Direct mail, telemarketing, special events, grant proposals, Internet appeals, planned giving, and membership appeals.

Fundraising costs were 15% of related contributions. (Related contributions, which totaled $18,646,374, are donations received as a result of fundraising activities.)

Tax Status

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial

The following information is based on NAACP's audited financial statements - consolidated - for the year ended December 31, 2015.

Source of Funds
Trusts and foundations 7,774,487
Corporations 4,449,295
Individuals 4,445,408
Membership 2,914,567
Convention 2,774,839
Image Awards 2,667,374
Freedom funds 1,062,108
In-kind contributions 971,393
Other revenue 648,282
Leadership 500 375,760
Bequests 361,436
Organizations 327,368
Interest and dividend income 198,998
Combined federal campaign 128,268
Regional conferences 105,300
Government 83,419
Advertising 34,400
Subscriptions 10,059
Return on investment 6,301
Legal settlements 4,500
Investment loss, net -204,318
Total Income $29,139,244
  • Programs: 72%
  • Fundraising: 10%
  • Administrative: 15%
  • Other: 3%
Total Income $29,139,244
Program expenses 21,184,828
Fundraising expenses $2,837,187
Administrative expenses $4,289,480
Other expenses $795,352
Total expenses: $29,106,847
Income in Excess of Expenses 32,397
Beginning Net Assets 904,554
Other Changes In Net Assets -1,444,091
Ending Net Assets -507,140
Total Liabilities 13,474,298
Total Assets 12,967,158

Note 1: According to NAACP's audited financial statements for the year ended December 31, 2015, the organization received in-kind contributions of $971,393 in professional fees. Note 2: In the above financial summary, "Other Expenses" refers to the cost for CRISIS magazine which include printing, advertising, postage, writers, photographers, and production staff. Note 3: In the above financial summary, "Other Changes in Net Assets" refers to pension related changes other than net periodic pension cost (-$1,444,091). Note 4: According to the NAACP's audited financial statements for the year ended December 31, 2015, the organization had an unrestricted net asset deficit of approximately $6,777,000. The organization states that “for 2015, revenue and support over expenses before pension-related changes was a positive $32,397. To determine the total change in net assets, the amount of pension-related changes requires inclusion. For 2015, as determined by our actuaries, there was an increase in the future benefits of the pension plan that exceeded the amount of contributions and their investment value. This amount, a negative change in net assets of $1,444,091, was the primary reason for a total negative change in net assets of $1,411,694. To return to positive operations, NAACP Finance Committee instituted a policy to limit the amount of budget increase based on a prior year and current year projection. Additionally, NAACP implemented cost containment measures and focused on increasing support and revenue especially from new sources. As a result, NAACP preliminary 2016 financial statements show a positive change in net assets.”

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