Giving Wisely

If you love animals – especially ferrets – and can’t rescue yourself, supporting ferret rescue is a wonderful way to help! Every animal shelter depends on contributions they receive from caring individuals. Municipal animal control or shelters who have town or city contracts are the only groups that receive government funding, and even they rarely receive enough to provide for the needs of all the animals.

Most animal shelters are entirely above-board and do a great job. Sadly, however, there are some individuals calling themselves “rescues” who hoard or abuse animals. Review the Adoption and Placement – Surrender sections for additional information. Most are common practices of responsible shelters. Also read the Shelter Research section; it has great links to nonprofit charity sites. As noted there, the Ferret Shelter Directory does not have the resources to visit or verify the accuracy of each listing.

The best way to support a shelter is usually through direct monetary donations. Some, but not all, appreciate donations of new or used materials or equipment such as food, bedding or cages. Before sending anything, please be sure that the shelter you have selected can use the items. Some only use specific foods, others only special cages, others do not use cages at all. Some shelters may only use particular types of bedding/toys in order to fit their specific shelter environment. Keep in mind that a shelter may be able to buy supplies wholesale or at a discount; giving money allows them to maximize your gift and buy exactly what they need, when they need it.

Under IRS rules, donations to a 501(c)(3) nonprofit are deductible on personal income taxes (if you are able to itemize deductions). If tax-deductibility is important to you, we recommend verifying a United States’ shelter’s non-profit status with Guidestar. To search their database, just open a free account.

Just because a group is an IRS-approved charity does not mean it’s efficient or effective. Their rules were initially established to ensure wealthy people were not avoiding taxes. Therefore, the IRS is often far more interested in where money comes from rather than how it is spent. Researching the following items can help you direct your contribution to the the kinds of organizations that you want to help. Remember actions speak louder than words and financial reports will tell you how an organization actually uses the funds they receive.

Mission

Most organized charities will have a Mission Statement. Read – REALLY read – it. What are their goals? Their vision? Do they align with your charitable intentions? Is the mission clear or vague?

Annual Report

A larger charity usually publishes a report each year with their significant accomplishments, a financial statement, Board and Staff, and other news of importance. They may be on the group’s website or you can request a copy.

Balance Sheet or Income/Expense Spreadsheet

Any shelter should at a minimum be able to provide a list of their income and expenses categories if you send them a self-addressed, stamped envelope. If they don’t keep any financial records, why not? Online or free library basic bookkeeping courses are available and anyone running a business, including a nonprofit one, should have or be working to acquire these skills.

Acknowledgement

The best nonprofits make it a practice to thank people promptly. It may take a little time for those with limited staff – but you should ALWAYS eventually receive a thank you/receipt for a financial donation. Under IRS rules, any monetary donation of $250 or more requires the nonprofit to send you a signed letter with certain formal wording. Remember that if you are audited by the IRS, only donations for which you have a receipt will be approved.

Not Sure?

If you cannot decide what ferret shelter to support, the non-profit group Support Our Shelters provides a grant program for small ferret shelters. You might also consider sending money directly to a vet who treats their animals to be placed on account or to pay for the expenses for a particular ferret under vet care.

Here are tips on reading 990 forms and some further suggestions regarding finances provided by L. Vanessa Gruden, Executive Director of the Ferret Association of Connecticut (FACT) and a bookkeeper specializing in nonprofits for 20 years.

Form 990

• These must be completed and sent to the IRS annually by charities. Don’t fear them!  They are an excellent source of information.
• A 990-N (postcard filing) will have little beyond the principal officer’s name/address and confirmation that their annual revenue is less than $50,000.
• A 990-EZ contains more data. Important places to look on the form:
  • Part I: Shows the stated mission, total income, expenses, and monies/assets as of the end of the year.
  • Part III: Splits out the group’s actual programs, describes them and how much was expended on each.
  • Part IV: Lists board directors and key staff, as well as how many hours they worked and how much they were paid.
• 990 – A full 990 is required for organizations with over $200,000 of annual revenue or for those of us (like FACT) who are run by fussy bookkeepers who love numbers! The “full” 990 is a treasure trove, as it provides breakdowns of expenditures in detail. Along with the Parts noted for the 990-EZ, be sure to read Part IX. Expenses are listed, then broken down into 3 categories – Program Services (money spent to fulfill the group’s mission), Management & General Expenses (how much was spent for administrative costs), and Fundraising (how much was spent to raise their income.) To calculate percentages, simply divide the line 25 totals by the Total Expenses shown on line 25, column A. The form does not have a section for veterinary fees but as that is usually a significant sum for a shelter, it should be listed under “Other Expenses” on line 24.

 Additional Hints:

• Reasonable fundraising expenses are necessary; if the group doesn’t categorize ANYTHING as fundraising, they may not be accounting for those expenses correctly. However, an organization that spends 90% of their income for fundraising is probably hiring a professional telemarketing firm who is getting most of your money!
• Administrative expenses – rent, utilities, printing/postage – are another necessity. It is standard accounting procedure to allocate most across each expense column. For example, printing costs certainly include adoption, intake, or other animal-related paperwork.
• Salaries are also normally allocated across columns, especially in a small group where the director performs many different tasks. While it may be tempting to assume an all-volunteer organization is “better,” don’t discount the level of professionalism and consistency paid staff offer. Salaries should  be consistent with what the organization is providing in the way of services to both the animals in their care and to the public in the way of programs and services.
• Don’t be put off if the organization maintains assets. If anything, you should worry more if they don’t have any money put aside. A responsible organization realizes that reserve funds are important to ride out unexpected large expenses, disasters, economic conditions, or even to ensure the animals they have will be appropriately cared for if they should be forced to stop operating. A reserve of 25-50% of their annual income is sensible and means the organization is thinking ahead. An organization may also have to keep “restricted funds” – those they can only spend for a very specific purpose designated by a donor (for example, a building fund). However, a group with 5 or 10 times their annual income as liquid assets may not be spending as much as they could on their charitable purpose.
• Some donors believe that “nearly all” income to should go out directly for the care of the animals. Watchdog groups at times recommended administrative costs should not be more than 10% of total revenue. This belief is disadvantageous to smaller groups, who do not have the economies of scale available to larger ones. Current nonprofit theory suggests that 25-35% spent on administration and fundraising is more reasonable and allows charities to invest in important infrastructure that lets them BETTER fulfill their mission.