Make-A-Wish Foundations

The purpose of this paper is to provide an interpretation of the financial health of the Make-A-Wish Foundation of America. In order to do this, I have analyzed the financial statements of the Make-A-Wish Foundations for 2002 and 2001. Based on this analysis, I have concluded that the financial health of the Make-A-Wish Foundation is strong despite flat growth, expense growth, a decrease in net assets, and growth in restricted assets.

Status/Mission

The Make-A-Wish Foundation of America is a tax-exempt under section 501(c)(3) of the Internal Revenue Code. As a nonprofit under Federal tax law, the foundation is eligible to receive contributions as tax deductible charitable donations for federal income tax purposes. The mission of the foundation is to grant wishes of children with life-threatening medical conditions to enrich the human experience with hope, strength and joy.

Common Size Ratios

It is important to note that the financial statements periods under review occur in the time period directly following the national tragedy of 9/11 and subsequent downturn in the national economy in 2002. While American philanthropic giving reached historic levels during this period, most Americans directed their giving to the disaster victims and organizations like the American Red Cross which supported direct giving to the families of victims and affected first responders. In the period directly following the 9/11 disasters, many nonprofits reported steep declines in contributions.

During the 2002-2001 period, the Make-A-Wish Foundation reported a modest 1.5 percent increase in contributions and total support. However, when total contributions are considered as a ratio of total support and revenue, there was virtually no growth, despite an increase in wishes in 2002.

Table 1.

2002 2001

Total Contributions

Total Support & Revenue $ 88,105,693

$ 132,433,291 $ 86,817,212

$ 130,419,365

Ratio = 0.665283573 0.66567731

In 2002, the Foundation was able to secure 3,200 wishes compared to only 2,600 wishes in 2001. This is explained in part by an increase in costs associated with securing wishes which ranged from $3,000 to $11,900 in 2002 and $2,400 to $9,400 in FY 2001.

Overall, the Foundation experienced a 4 percent, or $5,671,653 growth in total expenses over the last two years. As shown below, Total Expenses totaled $126,812,612 in 2002, as compared to $121,140,959 in 2001.

Table 2.

2002 2001

Total Expenses

$ 126,812,612