Charity Review

  • Issued: February 2022
  • Expires: February 2024

Adventist Development and Relief Agency International

Standards Not Met

  • 1
  • 6
  • 7
  • 16

800-424-2372

12501 Old Columbia Pike
Silver Spring, MD 20904

https://adra.org/

800-424-2372

12501 Old Columbia Pike Silver Spring, MD 20904

https://adra.org/

Standards Not Met

  • 1
  • 6
  • 7
  • 16

Standards For Charity Accountability

Governance

  1. Board Oversight

    Standard 1 (Oversight of Operations and Staff)

    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.

    ADRA does not meet this Standard because its board of directors does not:

    • Review the performance of the Chief Executive Officer at least once every two years.
    • Have a voting member of the board who is assigned the responsibility of serving as the treasurer.
  2. Board Size

    Standard 2 (Number of Board Members)

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

    The organization meets this standard.

  3. Board Meetings

    Standard 3 (Frequency and Attendance of Board Meetings)

    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

    Standard 4 (Compensated Board Members)

    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

    Standard 5 (Conflict of Interest)

    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

    Standard 6 (Board Policy on Effectiveness)

    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.

    ADRA does not meet this Standard because:

    • The board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.
  2. Effectiveness Report

    Standard 7 (Board Approval of Written Report on Effectiveness)

    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.

    ADRA does not meet this Standard because:

    • The organization has not completed an effectiveness assessment in the last two years.

Finances

  1. Program Expenses

    Standard 8 (Program Service Expense Ratio)

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

    The organization meets this standard.

  2. Fundraising Expenses

    Standard 9 (Fund Raising Expense Ratio)

    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

    Standard 10 (Ending Net Assets)

    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

    Standard 11 (Financial Statements)

    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

    Standard 12 (Detailed Functional Breakdown of Expenses)

    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

    Standard 13 (Accuracy of Expenses in Financial Statements)

    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

    Standard 14 (Budget)

    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

    Standard 15 (Misleading Appeals)

    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 BBB is unable to verify if this organization meets this standard.

  2. Annual Report

    Standard 16 (Annual Report)

    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.

    ADRA does not meet this Standard because its 2019 annual report does not include:

    • Total income.
    • Total program service expenses.
    • Total fundraising expenses.
    • Total administrative expenses.
  3. Website Disclosures

    Standard 17 (Web Site Disclosures)

    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

    Standard 18 (Privacy for Written Appeals & Internet Privacy)

    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

    Standard 19 (Cause Related Marketing)

    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 BBB is unable to verify if this organization meets this standard.

  6. Complaints

    Standard 20 (Complaints)

    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

Adventist Development and Relief Agency International does not meet the following 4 Standards for Charity Accountability:

Standard 1 (Oversight of Operations and Staff)
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.

ADRA does not meet this Standard because its board of directors does not:

  • Review the performance of the Chief Executive Officer at least once every two years.
  • Have a voting member of the board who is assigned the responsibility of serving as the treasurer.

Standard 6 (Board Policy on Effectiveness)
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.

ADRA does not meet this Standard because:

  • The board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.

Standard 7 (Board Approval of Written Report on Effectiveness)
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.

ADRA does not meet this Standard because:

  • The organization has not completed an effectiveness assessment in the last two years.

Standard 16 (Annual Report)
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.

ADRA does not meet this Standard because its 2019 annual report does not include:

  • Total income.
  • Total program service expenses.
  • Total fundraising expenses.
  • Total administrative expenses.

The BBB Wise Giving Alliance requested but did not receive complete information from the organization and is unable to verify the organization's compliance with the following Standard(s) for Charity Accountability: 15 19

Adventist Development and Relief Agency International meets the remaining 14 Standards for Charity Accountability.

Purpose

  • Year, State Incorporated

    1956, DC

  • Stated Purpose

    "to serve humanity so all may live as God intended."

Programs

Adventist Development and Relief Agency International (ADRA) reports that it is the international humanitarian arm of the Seventh-day Adventist Church that delivers relief and development assistance to more than 118 countries. The organization partners with local communities, organizations, and governments to provide culturally relevant programs and build local capability for sustainable operation. ADRA's community development initiatives target food security, economic development, health, education, emergency response and preparedness, and WASH (water, sanitation, and hygiene). Food security grants address the causes of food insecurity to vulnerable groups in targeted countries. Economic development projects provide agricultural assistance and offer individuals vocational training. Health projects focus on child health, HIV/AIDS, family planning, and tobacco. Together, the projects aim to improve the quality of life for recipients in a holistic manner. In 2019, the organization states that it benefitted nearly fourteen million individuals through its 1,182 projects. In addition, ADRA reports that it supplied sixty containers of food packets to seven countries.

For the year ended December 31, 2020, Adventist Development and Relief Agency International's program expenses were:

Program services $112,157,823
Total Program Expenses: $112,157,823

Governance & Staff

  • Chief Executive

    Michael Kruger, President

  • Compensation*

    $206,476

  • Chair of the Board

    Geoffrey Mbwana

  • Chair's Profession / Business Affiliation

    General Vice President, Seventh-day Adventist Church World Headquarters

  • Board Size

    43

  • Paid Staff Size

    128

*2019 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.

Note: Korey Dowling, Vice President for People and Culture, was the highest compensated employee, receiving $233,860.

Fundraising

Method(s) Used:

Direct mail appeals, Grant proposals, Internet, Planned giving arrangements, Telephone appeals

Fundraising costs were 2% of related contributions. (Related contributions, which totaled $123,794,559 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 Adventist Development and Relief Agency International's audited financial statements for the year ended December 31, 2020.

Source of Funds
U.S. government grants $82,760,401
Contributions $21,187,393
In-kind contributions $8,429,568
Other grants $6,161,623
Seventh-day Adventist Church $5,255,574
Investment income, net $762,930
Other income $215,395
Realized and unrealized loss on investments ($1,312,463)
Total Income $123,460,421
  • Programs: 91%
  • Administrative: 7%
  • Fundraising: 2%
Total Income $123,460,421
Program expenses $112,157,823
Fundraising expenses $2,797,652
Administrative expenses $8,993,178
Other expenses $0
Total expenses: $123,948,653
Income in Excess of Expenses $-488,232
Beginning Net Assets $55,136,590
Other Changes In Net Assets $0
Ending Net Assets $54,648,358
Total Liabilities $29,935,739
Total Assets $84,584,097

Note 2: According to ADRA's 2020 audited financial statements, the organization received $8,491,553 in donated food.

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