CharityWatch REPORT
Issued September 2017

CharityWatch Analysts perform an in-depth analysis of charities' audited financial statements and IRS tax filings, and often review other documents such as state filings, annual reports, and fundraising contracts during their evaluations. Below are select notes that CharityWatch believes may be of interest to donors.

Any time an Analysts' Note refers to a charity's Audited Financial Statements or IRS tax form, CharityWatch encourages interested donors to obtain a copy of the referenced documents so that they may view the information in context. Please contact the charity directly to request a copy of any referenced document. Charity tax forms and audits may also be obtained from a number of online databases. For a list of sources, please visit our LINKS page.

Note(s)
CharityWatch's rating of Ronald McDonald House Charities (RMHC) is for the National Office and does not include the financial activities of the independent RMHC Local Chapters.

According to the RMHC 2016 audit of December 31, 2016 (Note 1, Organization):

"...RMHC fulfills its mission by creating programs that address targeted needs and by supporting these programs and other activities conducted by its RMHC Local Chapters (Chapters) worldwide..."

"Ronald McDonald House Charities is a system of independent, separately registered public benefit organizations, referred to as 'Chapters' by RMHC. Each Chapter is licensed by McDonald's Corporation and RMHC to use RMHC related trademarks in conjunction with fundraising activities and the operation of its programs; the license agreement also sets standards of operations for programs, governance, finance, branding, and reporting..."
According to the Ronald McDonald House Charities (RMHC) audit of December 31, 2016 (Note 5, Donated Goods and Services):

"RMHC received total donated goods and services of $4,899,000 and $4,733,000, for the years ended December 31, 2016 and 2015, respectively. ...Donated goods and services include support from McDonald's Corporation consisting of the free use of its facilities, equipment, materials, and employee services which totaled $4,293,000 and $4,100,000, for the years ended December 31, 2016 and 2015, respectively."

[Note: CharityWatch generally excludes the value of in-kind (non-cash) donations of goods and services from its calculations of Program % and Cost to Raise $100. More information on how grades are calculated and the treatment of in-kind donations can be found by clicking on "About CharityWatch" from the navigation bar and then clicking on "Criteria & Methodology".]
According to the Ronald McDonald House Charities (RMHC) audit of December 31, 2016 (Note 6, Related Party Transactions):

"RMHC provides ongoing program grants to all of its Chapters around the world. These program grants are pre-authorized by the board of RMHC for the benefit of all Chapters. The grants are available to all Chapters that meet the program parameters; as such, the individual grants do not require any additional board action. Grants totaling $2,725,000 and $3,131,000, during the years ended December 31, 2016 and 2015, respectively, were provided to Chapters where certain members of the RMHC board also serve as officers and/or directors of the Chapter."
According to the Ronald McDonald House Charities (RMHC) audit of December 31, 2016 (Note 7, Concentrations):

"McDonald's Corporation provides support to RMHC through donated goods and services (see Note 5 [cited separately above]), direct contributions, and facilitation of fundraisers at its company-owned and franchised restaurants, of which the proceeds collected are remitted to RMHC. Contributions from these efforts totaled $20,753,000 and $19,591,000, during the years ended December 31, 2016 and 2015, respectively. This represents 59% and 55% of total revenues..."

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