The ECFA - What is it?

There are a lot of organizations out there that purport to do their work in Jesus' name. There are churches, mission organizations, humanitarian organizations, medical groups, and countless others. Most of these organizations do try to do the right thing and make sure that donor dollars go as far as they can -- most, but not all. Some organizations, unfortunately, are little more than a 501(c)(3) that serves to fill the founder's pockets and support him or her in a lifestyle of conspicuous consumption; with only a small percentage of the funds going to support the given cause.

So how can the average Joe know whether an organization is on the level? Enter the ECFA -- the Evangelical Council for Financial Accountability (http://www.ecfa.org). Founded in 1979 with the purpose of providing independent accreditation for evangelical organizations that follow good principles of financial stewardship, the ECFA is a good place to check before making any donation.

When you search for an organization, it breaks down their revenues and expenses, and you can see how much of their funding goes to Administrative, Fundraising, and Program expenses. The "Program" expenses is where the rubber meets the road, and ideally Program expenses should be at least 70% of the overall budget, and preferably 80-90%.

For example, here is a link to the ECFA profile of one of my family's favorite organizations, World Vision:

World Vision - ECFA Profile

You can see that for 2011, their total expenses were $1,079,055,000, broken down like this:

• Program: $927,153,000 (85.9%)
• Administrative: $50,200,000 (4.7%)
• Fundraising: $101,702,000 (9.4%)

(I confess, I didn't know that World Vision was a billion-dollar organization prior to writing this post.)

In a perfect world, these organizations wouldn't need to spend anything on fundraising. It would be nice if that $100 million could be spent directly on meeting needs. But the truth is that without the emails and letters, people would forget about the work that these organizations are doing; like it or not, some fundraising is necessary.  

So if you get a solicitation from an organization that sounds good, but you're not familiar with it, check it out on ECFA. It's a quick way to help ensure you are giving wisely.

Note: Just because an organization is not a member of the ECFA, that doesn't mean it isn't a trustworthy organization. Some organizations may be too small to justify the audit & reporting requirements.