|CharityWatch is unable to provide a letter grade rating of Paws for Purple Hearts (Paws) at this time. Paws has declined to respond to CharityWatch's inquiries about its fiscal 2017 reporting of program expenses that may include fundraising activities. For this reason, we have issued Paws a "?" rating for its fiscal year-ended 12/31/2017.
CharityWatch's most recent letter grade rating of Paws was an "F" for spending 26% of its budget on programs and $44 to raise each $100 of contributions in its 2015 fiscal year.
CharityWatch sent an inquiry to Paws' Chief Operating Officer, Dave Platte, in September of 2018 asking for an explanation regarding certain variances in Paws' program expense reporting in 2017 compared to 2016 & 2015. In October of 2018, Mr. Platte responded that he was working to provide CharityWatch with "thorough responses...as soon as I can." When a response wasn't received, CharityWatch re-sent its inquiry to Mr. Platte in February of 2019. On March 1, 2019, Mr. Platte responded that Paws is "going to have to decline the opportunity to provide a detailed response" to CharityWatch's inquiry.
In our inquiry to Paws, CharityWatch asked the following:
"CharityWatch...has noted that Paws did not report expenses related to joint costs from a combined educational campaign and fundraising solicitation. Paws, however, has reported a significantly higher amount of 'Postage' and 'Printing and copying' expenses in Program Services since 2015, especially in 2017. Additionally, Paws allocated almost 60% of its 'Mailing lists' expenses to Program Services in 2017. Such expense reporting is typical for charities that have joint cost direct mail solicitation fundraising activity.
"...[I]f it is correct that Paws did not have joint cost solicitation activity in 2017:
"(1) Please provide CharityWatch with an explanation as to why the 'Postage,' 'Printing and copying,' and 'Mailing lists' expenses Paws allocates to Program Services per its 2017 audited Statement of Functional Expenses should be considered pure programmatic expenses and not joint costs. (Those three expense line items combined make up almost 30% of Paws' total reported program expenses in 2017. In contrast, they comprised 17% and 23% of total program expenses in 2015 and 2016, respectively.)
"(2) Please provide CharityWatch with further detail concerning the 'Professional services' Paws allocates to Program Services in 2017. What type of service(s), specifically, were provided for that $540,804 in total program expenses? Please provide a breakdown of the services provided with corresponding dollar amounts. (Similar to the expense items noted in (1) above, 'Professional services' comprised less than 5% of total program expenses in 2015, but that proportion increased to 12% in 2016 and 14% in 2017.)"
|According to the Paws for Purple Hearts audit of December 31, 2017 (Note 2, Related Party Transactions):
"The founder, who is also a member of the board of directors of the Organization, is a member of the board of directors of Bergin University of Canine Studies (BUCS). The Organization entered into a contract with BUCS located in Rohnert Park, California, as discussed further in Note 6 [cited below]. As a result of the contract, the Organization paid $210,926 to BUCS during the year ended December 31, 2017...
"The Organization has also received funding from BUCS to assist in establishing the non-profit and providing financing to the Organization. As a result, the Organization made payments, net of advances to BUCs [sic] totaling $206,340 during the year ended December 31, 2017..."
According to the Paws for Purple Hearts audit of December 31, 2017 (Note 6, Agreements):
"The Organization has an agreement with Bergin University of Canine Studies (BUCS) to provide dogs that are suitable for candidates for training by veterans suffering from psychological scars, curriculum and updates for teaching veterans about training services and assistance dogs and oversight of the program, consulting regarding dogs being trained by the Organization, and services and expenses. The Organization has agreed to identify veterans eligible for dogs, work with veterans under the Organization's supervision, obtain dogs exclusively from BUCS, provide for the health and maintenance of the dogs, to extent possible, and all instructors of the Organization shall be BUCS graduates. In addition, the Organization will return the dogs to BUCS when suitable for placement. The agreement requires the Organization to reimburse BUCS for the cost of services and expenses, and an annual licensing fee of 9.75% of the Organization's revenue from $250,000 to $499,000, 8.5% of revenue from $500,000 to $749,000, 7.25% of revenue from $750,000 to $1,000,000 and 6% of revenue in excess of $1,000,000. During the year ended December 31, 2017 the Organization recorded $353,327 for licensing and administrative fees... As of December 31, 2017, the Organization owes $386,891 to BUCS related to the above agreement..."