The ASPCA is under fire again for how it spends donor money.
The ASPCA’s spending habits and lack of fondness for reporters and transparency — last year, the ASPCA’s NYC Adoption Center earned a 1 out of 5-paw rating on TCR’s transparency scale — have been a favorite reporting subject here at TCR. It seems our friends at CBS News have discovered the treasures that abound from a look at ASPCA’s financial practices.
Some background: The Manhattan-based American Society for the Prevention of Cruelty to Animals (ASPCA) is a 501 c (3) nonprofit, which means it pays no property, sales, income or other taxes. Its president and CEO, Matthew Bershadker was paid $843,539 in 2019 according to the organization’s Form 990 filing with the IRS. The same filing reveals that the “non-profit” took in $279 million in revenue in 2019, and had an operating income of $28.4 million, a robust profit margin of more than 10%. That includes (as we reported here in-depth in 2020) revenue from fees earned from a partnership in which Crum & Forster, a global multi-product insurer that pays licensing fees to sell ASPCA Pet Insurance under the ASPCA name. Put simply, the company uses the ASPCA name to market pet insurance, potentially swaying consumers to purchase the product based on name recognition, not coincidentally selecting a brand that is associated with animal welfare.
Here is an excerpt from this week’s CBS News story on ASPCA’s business model (five paws to them):
According to the nonprofit’s tax returns, the ASPCA took in nearly $280 million in 2019. The nonprofit told CBS News it spends 77 cents of every dollar on its mission to rescue, protect and care for animals in need, which, in addition to hands-on services, includes expenditures on mission-related public education and engagement.
“The devil is in the details when one looks at spending,” said Brian Mittendorf, the Fisher designated professor of accounting at The Ohio State University and a nonprofit tax expert. “If we just look at how much of the spending goes toward shelter and veterinary services, and toward grants to local humane societies, it’s hovering around 40%.”
In its commercials, the ASPCA says a $19 monthly gift could mean the difference between life and death for animals in danger. CBS News decided to look at how each $19 donation is being spent.
According to information from the organization’s 2019 tax forms, $7.75 of each $19 donation went toward hands-on help with animals across the country, and $6.88 went toward public education, communication, policy, response and engagement. This includes things that include appeals for donations like telemarketing and direct mailings. Another $3.65 went toward membership development and other kinds of fundraising. The remainder, about 75 cents, was spent on management.
In 2019, the ASPCA’s CEO Matt Bershadker made more than $840,000. That’s more than the CEO’s of Feeding America and the American Red Cross, charities that have a budget 10 times the size of the ASPCA. Bershadker declined CBS News’ request for an interview, but in response to questions posed to the nonprofit, the ASPCA’s Senior Vice President of Communications Elizabeth Estroff wrote, “the ASPCA’s CEO compensation is evaluated and benchmarked every year by an outside consultant.” She also said it is based on policies and practices that are fully consistent with IRS regulations regarding “reasonable compensation” for nonprofits.