'F' Graded Charity Now Controls World Neighbors
UPDATE, Published 11/02/2017:
Effective June 30, 2016, World Neighbors separated from Feed The Children, becoming “a self-sufficient, independent organization apart from Feed The Children, Inc. once again,” according to the terms of a Separation Agreement signed by the parties. The June 30, 2016 Separation Agreement terminated the March 1, 2013 Memorandum of Understanding between the parties, which had made World Neighbors a subsidiary of Feed The Children (as discussed in CharityWatch’s original article, below).
As of November 2017, CharityWatch once again provides a separate rating for World Neighbors (WN), based on WN’s fiscal year-ended June 30, 2017, which covers the 12-month period after the June 30, 2016 effective date of WN’s separation from Feed The Children. CharityWatch gives World Neighbors an “A” grade, based on WN spending 85% of its cash budget on programs and $13 to raise each $100 in funds for the fiscal year-ended June 30, 2017.
Feed The Children (FTC) currently receives a “D” grade from CharityWatch, based on FTC spending 46% of its cash budget on programs and $42 to raise each $100 in funds for the fiscal year-ended June 30, 2015. CharityWatch will update FTC’s rating for the fiscal year-ended June 30, 2017 after we are able to obtain FTC’s audited financial statements and IRS Form 990 filing for that fiscal period.
ORIGINAL ARTICLE, Published 07/15/2014:
A "strategic collaboration with Feed The Children" is how World Neighbors describes its March 1, 2013 agreement with Feed The Children. Feed The Children, however, actually acquired World Neighbors on March 1, 2013. One may not even realize this from a cursory review of the World Neighbors website as it takes digging a little deeper to find mention that World Neighbors is a subsidiary of Feed The Children. Although most of its website and the words "strategic collaboration" may imply that it is an independent organization, as a subsidiary of Feed The Children, World Neighbors has given up ultimate control over its own operations.
World Neighbors, which focuses on training and educating communities to find lasting solutions to hunger, poverty and disease, has been graded in the "A"-minus to "B"-plus range by CharityWatch dating back to at least 2006. Operating on a cash budget of about $4.7 million in fiscal year 2012 before the acquisition, World Neighbors is substantially smaller in size than Feed The Children, which had a cash budget of over $77 million in the same fiscal year. In contrast to the highly-graded World Neighbors, however, Feed The Children has a long history of not only financial inefficiency, but also of disgraceful operating behavior.
Feed The Children, designated the "Most Outrageous Charity in America" by CharityWatch in 2009, has received "F" grades from CharityWatch for low program spending and high fundraising costs since we began its rating in 1995. CharityWatch has published at least eight articles since 1999 concerning the financial improprieties, mismanagement, and scandals that plagued Feed The Children during the almost 30-year tenure of its infamous founder and former president, Larry Jones, who finally was fired by the board in November of 2009. Although Jones has been gone from Feed The Children for about five years now, the charity's financial inefficiency has continued, and its fiscal year 2013 operations result in an "F" grade based on a 34% program services percentage and $51 cost to raise every $100 in cash donations.
Perhaps World Neighbors is hesitant to draw too much attention to the fact that it is now operating as a Feed The Children subsidiary given Feed The Children's troubled past. However, by calling its relationship with Feed The Children a "collaboration" or "partnership" in the few places where it is mentioned on World Neighbors' website, CharityWatch is concerned that World Neighbors may be confusing donors as to the nature of its acquisition by Feed The Children. World Neighbors is now a part of Feed The Children as evidenced by the Feed The Children consolidated audit of June 30, 2013, which includes the accounts of World Neighbors and its other "wholly owned and controlled affiliates." Further, the World Neighbors audit of June 30, 2013 notes that pursuant to the World Neighbors amended and restated bylaws effective February 6, 2013, Feed The Children has the right to appoint or remove World Neighbors Board of Trustees, and there are seven operational actions for which the World Neighbors Board of Trustees must first obtain written approval from Feed The Children before executing, including approving the annual budget; appointing members to the board of trustees; amending, restating or repealing the Certificate of Incorporation or the bylaws; and changing the purpose of World Neighbors. Feed The Children's Chief Executive Officer and Director, Kevin Hagan, plus its Chief Financial Officer, Christy Tharp, also are on the World Neighbors Board of Trustees. In light of the above, the World Neighbors Board of Trustees is no longer independent and does not have the power to overrule decisions made by Feed The Children.
World Neighbors said it is "thrilled to be working with Feed The Children and to build a future of healthier, stronger families and communities together" in "A Special Announcement" that was posted on the "News & Publications" page of its website but has since been removed. Past supporters of World Neighbors, however, may not be thrilled to have World Neighbors' programs controlled by a charity with the tainted history of Feed The Children. Regardless of how World Neighbors portrays its relationship with Feed The Children to the public, CharityWatch believes that it is important for donors to know that the much larger Feed The Children now controls World Neighbors, and as part of Feed The Children, World Neighbors now shares its "F" grade for low program spending and high fundraising costs, according to CharityWatch.