Pilots N Paws

CharityWatch is unable to provide a rating for Pilots N Paws at this time due to its small size, which we explain more in a subsequent Analysts' Note, below. 

However, though we are not able to rate the organization at this time, CharityWatch has concerns about Pilots N Paws financial reporting and operations. We wrote the charity with questions via email and U.S. mail on July 17th, 2025. As of August 7th, 2025 we have not received a response. 

We encourage those considering making donations to Pilots N Paws to ask the charity to answer these questions. If you do so and the charity responds, we encourage you to forward a copy of its responses to CharityWatch. The 2024 IRS tax Form 990 for Pilots N Paws that CharityWatch analyzed prior to formulating the below questions can be viewed here. 

Questions

(1)   Per the 2024 Form 990, page 1, Section K, Pilots N Paws reports that it is legally organized as a corporation. We were unable to locate your registration with the South Carolina Secretary of State’s office, business entity name search at https://businessfilings.sc.gov/BusinessFiling/Entity/Search. We ask that you please provide evidence that you are properly registered with the South Carolina Secretary of State. If you are not, please provide an explanation (such as being incorporated in a state other than South Carolina, including evidence of such).

(2)    We noted that Pilots N Paws has accumulated a significant amount of cash reserves in the form of cash and savings relative to the amount of funds it spends each year. We also noted that these funds are not permanently restricted by donors, nor does your organization report significant liabilities that may indicate these funds may need to be used to fund contracts for capital investments or to pay off past debts. CharityWatch computed that your organization could continue to operate at 2024 spending levels for more than 14.4 years without raising an additional penny of revenue.

a.     Please provide or describe in detail your organization’s board-adopted policies related to its cash reserves and annual spending.

b.     What are the organization’s plans for spending down these reserves? Please provide a timeline and plans for how it intends to use these funds for charitable purposes.

c.      Does the organization have any plans for distributing these funds in the form of grants to other qualified 501(c)(3) public charities working in a similar cause area? If so, please describe such plans.

d.     Does your organization intend to discontinue its fundraising efforts if it is unable to spend the resources it has already accumulated on a reasonable timeline (spend them down within 3 to 5 years, for example)?

(3)     In your organization’s 2024 IRS Form 990, Part III, Section 4a, you report that “approximately 20,400 animals were provided with transportation in 2024.”

a.    Please provide a more detailed description of your organization’s part in facilitating such transportation. For example, was Pilots N Paws directly involved in facilitating these rescues, or did it participate in a less direct way?

b.     Of the approximately 20,400 animals transported, can you provide a breakout of the number of flights or rescues were facilitated in total related to these animals?

(4)    Your organization reports having only 4 board members on its governing body, of which only 3 are reported as “independent.” In addition, in Form 990, Part VI, Section B, your organization reports that while it has a written conflict of interest policy, its officers, directors, trustees, and key employees were not required to annually disclose interests that could give rise to conflicts, nor was this policy regularly and consistently monitored or enforced. In addition, in the same section of the Form 990 your organization reports that it does not maintain a written whistleblower policy or a written document retention and destruction policy.

a.     Does your organization’s board intend to adopt, monitor, and enforce the above described policies in future years? If so, please provide a timeline for adopting such policies.

b.     Please provide a description of your organization’s existing efforts to maintain internal controls, protect its assets, and detect fraud or misappropriations of assets.

(5)     In 2024 your organization reports raising $676,311 in cash contributions while spending only $2,489 to do so. Of this $2,489, no salaries and wages are included.

a.     Did any paid member of staff spend any time on fundraising or fundraising-related work in 2024?

b.      If no member of staff spends any time on fundraising, or coordinating volunteer fundraisers, how does the organization maintain good governance related to its fundraising practices?

c.     Please generally describe the primary ways your organization raises the bulk of its donations annually (for example, via its website; volunteers; fundraising events; crowdfunding campaigns on third-party websites, etc.).

(6)  Is there any additional information you would like to provide about your organization’s operations and finances that would help us form a more complete picture of your work?

CharityWatch is unable to provide a rating for Pilots N Paws based on its fiscal year ended 12/31/2024 due to the charity's small size. According to its 2024 IRS Form 990, Pilots N Paws raised only $676,311 in contributions and reported only $242,354 in total expenses in 2024. 

Pilots N Paws reports that it formed in 2008, according to its IRS tax Form 990. Also according to Form 990 reporting,  it raised approximately $2.6 million in contributions during the five-year period 2020 through 2024, which averages to only about $524,471 annually (IRS Form 990, Schedule A, Part III, Section A). 

The financial reporting of small charities is often not comparable to that of larger ones for several reasons: 

Cash Basis Accounting

Smaller charities tend to report their financial activities using the cash basis rather than accrual basis method of accounting. Though the IRS allows charities to use cash basis accounting to prepare their annual IRS Form 990 tax filings, the cash basis accounting method is not acceptable under Generally Accepted Accounting Principles (GAAP) in the United States. Accrual basis accounting reports revenue as it is earned and expenses as they are incurred, providing a more complete picture of an organization's assets and liabilities (resources owed to outside parties), and a better measure of how efficiently it is operating. Cash basis accounting is a less reliable method for assessing a charity's financial health or measuring its financial efficiency because it reports revenue and expenses based on the timing of when cash deposits or payments are made, which can be arbitrary and open to manipulation. Charities often opt to use the cash basis method of accounting when they are newly formed or small in size because using cash basis is more simple than using accrual basis and requires less accounting expertise to maintain. 

In its 2024 IRS Form 990, Pilots N Paws reports using the cash basis method of accounting to prepare the Form 990 (IRS Form 990, Part XII, line 1).

Lack of Independent Audited Financial Statements

Most charities forego hiring external auditors to produce annual audited financial statements until they reach a size that subjects them to regulations requiring them to do so, such as to satisfy state fundraising regulations, to obtain credit, or for insurance purposes. Audits conducted by Certified Public Accountants (CPAs) can cost thousands of dollars, which is relatively expensive for small charities. The lack of an audit, however, means that a qualified outside party has not subjected the charity's financial reporting to auditing standards that would test the effectiveness of its internal controls and assess whether or not the charity's financial information is fairly presented and free of material misstatements. 

In its 2024 IRS Form 990, Pilots N Paws responds "No" to the question:  "Were the organization's financial statements audited by an independent accountant?" (IRS Form 990, Part XII, line 2b). "

It does respond "Yes" to the question: "Were the organization's financial statements compiled or reviewed by an independent accountant?" 

For more information about the difference between an audit versus a compilation or review, you may read this article. 

Economies of Scale

Economies of scale occur when the size of an organization's operations allow it to operate more efficiently. As an organization grows it costs it less (per unit) to produce its goods or services due to its overhead and other fixed costs being spread over a larger volume of output. For example, a small charity that serves 500 poor people per year may need to pay $8,000 for its annual financial audit. A larger charity that serves 3,000 poor people per year may need to pay $10,000 for its annual financial audit. The first charity spent $16 per person served for the overhead cost of its audit, while the second spent far less at only $3.33 per person served. Charity rating methods suitable for larger organizations often cannot be fairly applied to much smaller charities given that the latter lack the economies of scale necessary to operate at the same level of efficiency. Small charities that assist underserved populations, that are fulfilling an unmet need, or that are new or in the process of scaling up to a larger size may still be worthy of donors' support despite CharityWatch's inability to rate them due to this comparability issue.