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CharityWatch Drops Rating of Heritage For The Blind

   Mar 06, 2024

CharityWatch is unable to provide a rating for Heritage For The Blind based on its fiscal year ended 12/31/2022 due to the charity's small size. According to its 2022 Audited Financial Statements, Heritage For The Blind raised only $631,149 in public contributions, of which 100% consisted of "Donations from auto sales." It also reported receiving $50,000 in the form of "SBA PPP Loan Forgiven" that fiscal year. This is a drastic decline from recent prior years in which Heritage For The Blind reported raising $3,277,626, $3,553,198, $2,807,569, and $2,541,602 in "Gifts, grants, contributions, and membership fees received" in 2018, 2019, 2020, and 2021, respectively. (IRS Form 990, Schedule A, Section A. Public Support, line 1). 

Heritage For The Blind's past three historical CharityWatch ratings and financial efficiency ratios are as follows:

2019: Grade F; Program Percentage was 21%; Cost to Raise $100 was $68

2016: Grade F; Program Percentage was 21%; Cost to Raise $100 was $76

2014: Grade F; Program Percentage was 21%; Cost to Raise $100 was $86

According to Heritage For The Blind's audited financial statements for the fiscal year ended December 31, 2022, Note 8, Going Concern:

"In 2022, Heritage for the Blind, Inc. experienced significant disruptions in fundraising due to a series of cyber attacks and other malicious activities. These incidents led to financial losses and delayed several of the planned initiatives. However, as of this date, the above challenges have been overcome and they are now fundraising effectively and continuing the organizations [sic] mission." 

Under Generally Accepted Accounting Principles (GAAP) in the United States, a "Going Concern" audit disclosure is required when events and circumstances raise substantial doubt about the entity's ability to continue as a going concern. According to audit firm KPMG, "Even if a charity's management concludes that there are no material uncertainties related to events or conditions that may cast significant doubt on the organization's ability to continue as a going concern, but reaching that conclusion involves significant judgment - i.e. a "close call" scenario, disclosure of the judgments made is required." 

According to Heritage For The Blind's audited financial statements for its fiscal year ended December 31, 2022, the charity reported a deficit in unrestricted net assets amounting to $(904,999). The charity reported total assets of $290,623, of which $235,314 consisted of "Accounts Receivable." It reported total liabilities of $1,195,622, of which $816,110 consisted of "Miscellaneous Loans Payable." 

CharityWatch's determination of the Program % and Cost to Raise $100 for Heritage for the Blind for the year 2019 included the reallocation of $878,024 in "clean air initiative" expenses from program services to fundraising expenses. Heritage for the Blind considers the costs associated with its car donation "program" to be an "auto recycling clean air project" program expense in support of "accelerating the retirement of older, higher polluting vehicles and to promoting a shift to new, cleaner and more efficient alternatives," as described in its 2019 audited financial statements (Note 1A, Organization and Nature of Operations).

In CharityWatch's opinion, these "auto recycling clean air project" expenses should be considered fundraising expenses for reasons that include: (1) Heritage for the Blind reports raising all of its funds in 2019 through vehicle donations; (2) CharityWatch believes a charity's cost to run a vehicle donation program is a fundraising expense; and (3) there are many nonprofit and for-profit organizations that compete for used vehicle donations or sales, thereby minimizing the chances that such used vehicles otherwise would continue "polluting" the air.

CharityWatch made similar adjustments to Heritage For The Blind's reported program expenses when computing its rating for fiscal 2016. 

Heritage For The Blind reported $1,701,413  in total cash expenses in 2022. Of this amount it reported spending $808,065 on program expenses that did not include any joint costs from a combined educational campaign and fundraising solicitation. Of these $808,065 in reported program expenses, $245,661 consisted of Compensation to current officers, directors, trustees, and key employees, Other salaries and wages, Other employee benefits, and Payroll taxes. $377,971 consisted of "All other expenses," which are reported to include "Consultants & Commissions," "Utilities," "Postage & Freight," "Program Costs," and "Professional Consultants." The charity reported giving out no grants in fiscal 2022. 

Heritage For The Blind describes its program spending in its fiscal 2022 tax filing in the following way:

"The organization encourages people to donate cars in an effort to accelerate the retirement of older high polluting vehicles and promote a shift to new cleaner and more efficient alternatives. The organization maintains a website where users can learn about the benefits of a cleaner environment as well as a myriad amount of eye health information and available federal [,] state and city benefits to those in need." 

A "Donate" button on the Heritage for the Blind website at www.hftb.org navigates to another website, www.1800donatecars.com on which the charity solicits car donations.

According to the 1800donatecars.com website (as of March 4th, 2024) Heritage for the Blind operates a car donation "program" for which those who inquire about the donation program are also offered, subject to terms and conditions, a "thank you" in the form of a "3 day 2 night hotel voucher" and a "$200.00 Restaurant.com promotion." 

The 1800donatecars.com website also states that the hotel discount promotion certificates "are being offered and administered by a third party..." 

The National Federation Of The Blind previously reported on concerns outlined by the Better Business Bureau about Heritage For The Blind. 

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Heritage for the Blind