The information in this post is current as of March 21, 2023. CharityWatch periodically updates our charity ratings as more current financial information becomes available. For the most up-to-date information on Mercy For Animals, please visit CharityWatch's Mercy For Animals profile page.
As the only independent charity watchdog in the United States, CharityWatch analyzes audits, tax filings, and other financial reporting and provides objective information about how efficiently charities are operating for the purpose of aiding donors in their giving decisions. Mercy For Animals earns a “B+” rating and meets CharityWatch's benchmarks for Top-Rated status based on our analysis of its fiscal year 2021 financial reporting. However, it is ultimately up to you to decide which charities you want to support based on the criteria important to you. Read our 5 Steps for Informed Giving for additional guidance on how to select a worthy charity to support.
Mission
Mercy For Animals aims to end industrial agriculture by constructing a just and sustainable food system.
CharityWatch Rating
CharityWatch conducted an in-depth analysis of Mercy for Animals’ audited financial statements and IRS Form 990 (Tax ID#54-2076145) for its fiscal year ended December 31, 2021. Based on this analysis, CharityWatch assigned the charity a rating of "B+" on our "A+" to "F" rating scale for spending 71% of its cash expenses on programs that year, and for spending $13 to raise each $100 of cash support.
Organizational Structure
According to the Mercy For Animals audit of December 31, 2021 (Note 1, Organization and Nature of Activities):
"In order to spread the Organization's mission domestically and globally, the Organization assisted in the establishment of the affiliated nonprofit organizations in Canada, Brazil, Asia, Latin America and India. All affiliated organizations maintain separate Boards of Directors; however, some Board membership and senior management are common to some of the affiliates. All affiliates operate as separate and independent entities to undertake activities that may or may not be consistent with all requirements of the Section 501(c)(3) of the Internal Revenue Code governing certain tax-exempt entities. While the Organization made grants to the affiliates totaling $2,336,424 in 2021, the Organization does not enjoy the rights of ownership of the assets and revenues of the affiliates, nor is it subject to their liabilities. The Organization does not hold a majority interest ownership interest in its affiliates nor does the Organization have control of a majority of the Board appointments of the affiliated group. Accordingly, the [audited] financial statements of the affiliates have not been consolidated with those of the Organization."
[Note: The $2,336,424 in grants made to the affiliates, noted above, represents approximately 25% of Mercy For Animals' total cash spending on program services in 2021.]
Donated Goods & Services
According to the Mercy For Animals (MFA) audit of December 31, 2021 (Note 2 re: In-Kind Contributions), MFA reports receiving in-kind contributions in 2021 on which it placed a total value of $137,670, of which $113,379 consisted of donated legal services.
[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 on the Our Process page.]
Paycheck Protection Program (PPP)
According to the Mercy For Animals audit of December 31, 2021 (Note 12, Paycheck Protection Program):
"On April 6, 2020, the Organization secured a loan from a bank of approximately $875,000 through the U.S. Small Business Administration's paycheck protection program. The loan had an interest rate of 1% and was originally scheduled to mature on April 6, 2022. A portion or all of the loan may be forgiven in accordance with the provisions of the paycheck protection program."
[...]
"On July 12, 2021, the Organization was notified that the U.S. Small Business Administration had approved their forgiveness application. The loan forgiveness is recognized under forgiveness of PPP loan in the accompanying [audited] statement of activities."
Concentrations
According to the Mercy For Animals audit of December 31, 2021 (Note 8, Concentrations): "During the year ended December 31, 2021, 1 donor accounted for approximately 18% of contributions and grant revenues..."
Governance & Transparency
Mercy For Animals meets CharityWatch's Governance & Transparency benchmarks based on our analysis of its financial reporting for fiscal year 2021.
CharityWatch evaluates certain criteria related to a charity's Governance and Transparency. Donors may want to consider a charity's willingness to be open and transparent with CharityWatch to be a good litmus test for determining its commitment to public accountability.
Governance Benchmarks: Charities required to file a Form 990 with the IRS are asked to answer basic questions each year about their governing body and management, governance policies, and disclosure practices. CharityWatch reviews a charity's tax form to see if it reports having certain policies in place, a sufficiently large and independent governing body, and other basic governance information that serve as standard benchmarks for large charities of national scope or interest. Charities must pass all nine benchmarks in order to meet CharityWatch's overall benchmark for Governance.
Transparency Benchmark: Indicates whether a charity has met CharityWatch's transparency benchmarks for the fiscal year analyzed. To meet transparency benchmarks, a charity must post a complete copy of its most current, independent audited financial statements on its public website. It must provide complete copies of its IRS Form(s) 990 to CharityWatch upon request and may be required to answer questions related to its financial reporting and/or provide additional documentation if such information is necessary for CharityWatch to complete a meaningful evaluation.
The Form 990 is the tax form that larger charities are required to file with the IRS each year. The Form 990 contains information such as financial statements, a description of the charity’s mission and spending on significant programs, salary data, information about its governance and policies, and more. Charity tax forms are public information and are ubiquitously available from many online sources.
Visit our Resources For Donors & Journalists page for a list of resources where copies of charity tax forms may be obtained.
CharityWatch also analyzes a charity’s audited financial statements during our evaluations. Unlike the IRS Form 990, which contains a charity’s self-reported information, audited financial statements are produced by independent, third-party auditors. Though the IRS requires certain information to be reported in a charity’s annual tax filing, charities have been found to omit schedules, attachments, and other reporting from publicly posted tax forms as a means of hiding from public scrutiny information that donors may find unfavorable. Auditors, on the other hand, must adhere to generally accepted accounting principles (GAAP) and follow specific audit rules that encourage transparency and prohibit charities from omitting or hiding significant information from their audited financial statements.
Audit notes may report issues such as weak internal financial controls, pending lawsuits, significant financial commitments or outstanding debts, credit risks, compliance with government filings and regulations, and financial instability. By requiring charities to post a copy of their complete audited financial statements on their websites as a condition of meeting our transparency benchmark, CharityWatch hopes to encourage more charities to make their audits publicly available.
The top 3 compensation packages at Mercy For Animals in 2021 ranged from $134,108 to $144,195. Additional details may be viewed in the Top Salaries section of CharityWatch's Mercy For Animals profile page.
Compensation includes total of base compensation, bonus and incentive compensation (if any), retirement and deferred compensation (if any), nontaxable benefits, and other reportable compensation as reported to the IRS (Form W-2, 1099-MISC, and/or 1099-NEC), excluding any amounts already reported by the organization in a prior year IRS Form 990. Due to differences in the way compensation might be allocated, high salaries do not necessarily indicate inefficiencies, just as low salaries are not always beneficial.
CharityWatch's "A+" to "F" letter grade ratings and financial efficiency ratios take into account how a nonprofit's employee salaries and other compensation are allocated among program, management & general, and fundraising functions. Nonprofits generally allocate compensation based on how each member of staff spends their time. For example, the salary of a doctor who spends 100% of their time on a charity's program activities, such as providing direct medical care, would generally be allocated 100% to program. A fundraising or development executive's salary would be allocated 100% to fundraising. An executive director or president of a charity might spend 40% of their time on program activities, 25% of their time managing their nonprofit, and 35% of their time on fundraising. This person's compensation would be allocated among program, management & general, and fundraising expenses commensurately.
Due to the differences in the way compensation is allocated by charities in their IRS Form(s) 990 and audited financial statements, high salaries do not necessary indicate inefficiencies just as low salaries are not always beneficial. Rather than perceiving a particular nonprofit executive's compensation as too high or too low based on its nominal value, appropriate salaries are better determined by considering factors such as special skills needed for the position, relevant education and experience, and the complexity of a charity's operations. CharityWatch encourages donors to view each nonprofit's letter grade rating to better understand how efficiently it is operating overall prior to making a giving decision.
For more helpful context, read Reported Charity Salaries May Not Tell The Full Story and view CharityWatch's list of Nonprofit Compensation Packages of $1 Million or More.
| Charity | |
|---|---|
| Mercy For Animals |