High Assets Charities
Giving is a fixed pie, remaining steady at about 2% of gross domestic product (GDP) for over four decades. Because charitable dollars are limited and society's needs are not, it is vital that charities do not hoard the funds that they raise.
CharityWatch believes it is reasonable for a charity to set aside less than three years' worth its annual budget for financial stability and possible future needs. When a charity's available assets in reserve exceeds three years' worth its annual budget, CharityWatch downgrades its final letter grade rating. However, we continue to show what a charity's efficiency rating was prior to being downgraded for those donors who do not wish to factor a charity's high assets into their giving decisions.
A charity's Years of Available Assets reflects how many years a charity could continue to operate at current spending levels without raising any additional contributions or other revenues. Read our article Don't Judge a Not-For-Profit by its Profits for factors to consider when assessing a charity's financial stability. See Our Process for a detailed explanation of CharityWatch's treatment of high assets.