Study: Houston Most Philanthropic, Colorado Springs The Least

Houston’s philanthropic community is tops in the nation, according to a new study by Charity Navigator, the New Jersey-based charity watchdog group. The study shows that regional factors, such as the cost of living, a market’s maturity, and a city’s tendency to support one or two specialized causes, greatly influence the ability of the charities in each city to raise money and manage costs.

It is a comprehensive report on the performance – both Financial Health and Accountability & Transparency – of the 30 largest philanthropic marketplaces in America. Among the results:

  • Nashville’s charities are some of the most financially strong in the country;
  • Cleveland’s charities are the most efficient at fundraising;
  • Miami’s charities received proportionately the most donations; and,
  • Pittsburgh is home to some of the largest charities.

The study found the median CEO pay among charities in New York City is $86,000 more than what is paid to charity CEOs in Orlando, Fla.

Charity Navigator analysts compared the percentage of compliance for various accountability and transparency metrics, as well as the median values of various financial performance and size metrics of the largest nonprofits in the 30 largest metropolitan markets. Those markets are Atlanta, Baltimore, Boston, Chicago, Cincinnati, Cleveland, Colorado Springs, Dallas, Denver, Detroit, Houston, Indianapolis, Kansas City, Los Angeles, Miami, Milwaukee, Minneapolis/St. Paul, Nashville, New York City, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, San Diego, San Francisco, Seattle, St. Louis, Tampa/St. Petersburg, and Washington, D.C. Those markets account for 63 percent of the more than 8,200 charities evaluated by Charity Navigator and generate 65 percent of the total revenue and 66 percent of the total spending.

In terms of the overall Financial Health and commitment to Accountability & Transparency, the study’s highest rated charitable communities are: Houston, San Diego, Boston, Los Angeles and Miami. The lowest rated are Colorado Springs, Orlando, Tampa/St. Petersburg, Philadelphia, and Portland, Ore.

“Philanthropy is an integral part of each of these great cities,” said Sandra Miniutti, vice president of Charity Navigator. “Not one of these marketplaces ranks below a 3-star, ‘good’ rating for which donors and nonprofit leaders should be commended. “But each city presents unique challenges and opportunities to the charities that call it home. Our report isolates those differences to help Americans throughout the country better understand how charities in their city operate. We hope the study will also serve as a tool to help charity leaders start a dialogue across charitable communities to facilitate the implementation of best practices.”

Additional findings from the report include:

  • Market Size: New York City (932 large charities), D.C. (686) and L.A. (317) are more crowded and competitive philanthropic markets than Indianapolis (49), Colorado Springs (49) and Orlando (51).
  • CEO Compensation: Charity executives in New York City ($195,758) and D.C. ($185,593) earn considerably more than those in Orlando ($109,695) and Portland ($111,368).
  • Program Expenses: Detroit’s charities (85%) devote the largest percentage of their spending to their programs and services while Indianapolis charities spend the least (79%).
  • Annual Growth: Charities in Miami and San Francisco show the greatest growth in spending on programs, while charities in Orlando and Detroit report the least growth.
  • Level of Contributions: Donors to charities in Miami ($5 million), New York City ($4.6 million) and Kansas City ($4.6 million) are especially generous as charities in these cities report the highest median contributions in the study. Charities in Tampa/St. Petersburg ($2.5 million), Orlando ($2.5 million) and Seattle ($2.8 million) report the lowest median contributions.
  • Assets and Working Capital: The largest charities in Pittsburgh, Cincinnati, Philadelphia and Cleveland are generally richer in assets and working capital than charities in other parts of the country, while charities in Phoenix, Colorado Springs and D.C. are less financially secure.
  • Accountability & Transparency: Charities in Houston, San Diego and Portland earn the highest scores for their commitment to being accountable and transparent while charities in Nashville, Seattle and Pittsburgh score somewhat lower.
  • Financial Health: The largest charities in Nashville, Miami and Houston earn higher scores for their overall financial health than those in Portland, Orlando and St. Louis.
  • Donor Privacy Policy: Portland (66 percent) has the highest percentage of charities with written donor privacy policies (stating that the charity will not sell, trade or share its donors’ personal information with anyone else, nor send mailings on behalf of other organizations); Nashville (34 percent) has the lowest percentage of charities with such policies.
  • Types of Charities: Approximately 40 percent of the largest charities in Kansas City, St. Louis and Tampa/St. Petersburg are classified as Human Services making these philanthropic marketplaces less diverse in terms of the types of charities represented.