Charity Review

  • Issued: April 2021
  • Expires: April 2023

Salvation Army (National Corporation)

Accredited Charity

Meets Standards

703-684-5500

615 Slaters Lane
PO Box 269
Alexandria, VA 22313

https://www.salvationarmyusa.org
Accredited Charity

703-684-5500

615 Slaters Lane PO Box 269
Alexandria, VA 22313

https://www.salvationarmyusa.org
Accredited Charity

Accredited Charity

Meets Standards

Standards For Charity Accountability

Governance

  1. Board Oversight

    Standard 1 (Oversight of Operations and Staff)

    Description
    Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

    The organization meets this standard.

  2. Board Size

    Standard 2 (Number of Board Members)

    Description
    Soliciting organizations shall have a board of directors with a minimum of five voting members.

    The organization meets this standard.

  3. Board Meetings

    Standard 3 (Frequency and Attendance of Board Meetings)

    Description
    An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

    The organization meets this standard.

  4. Board Compensation

    Standard 4 (Compensated Board Members)

    Description
    Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

    The organization meets this standard.

  5. Conflict of Interest

    Standard 5 (Conflict of Interest)

    Description
    No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

    The organization meets this standard.

Measuring Effectiveness

  1. Effectiveness Policy

    Standard 6 (Board Policy on Effectiveness)

    Description
    Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

    The organization meets this standard.

  2. Effectiveness Report

    Standard 7 (Board Approval of Written Report on Effectiveness)

    Description
    Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

    The organization meets this standard.

Finances

  1. Program Expenses

    Standard 8 (Program Service Expense Ratio)

    Description
    Spend at least 65% of its total expenses on program activities.

    The organization meets this standard.

  2. Fundraising Expenses

    Standard 9 (Fund Raising Expense Ratio)

    Description
    Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

    The organization meets this standard.

  3. Accumulating Funds

    Standard 10 (Ending Net Assets)

    Description
    Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

    The organization meets this standard.

  4. Audit Report

    Standard 11 (Financial Statements)

    Description
    Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

    The organization meets this standard.

  5. Detailed Expense Breakdown

    Standard 12 (Detailed Functional Breakdown of Expenses)

    Description
    Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

    The organization meets this standard.

  6. Accurate Expense Reporting

    Standard 13 (Accuracy of Expenses in Financial Statements)

    Description
    Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

    The organization meets this standard.

  7. Budget Plan

    Standard 14 (Budget)

    Description
    Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

    The organization meets this standard.

Fundraising & Info

  1. Truthful Materials

    Standard 15 (Misleading Appeals)

    Description
    Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

    The organization meets this standard.

  2. Annual Report

    Standard 16 (Annual Report)

    Description
    Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

    The organization meets this standard.

  3. Website Disclosures

    Standard 17 (Web Site Disclosures)

    Description
    Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

    The organization meets this standard.

  4. Donor Privacy

    Standard 18 (Privacy for Written Appeals & Internet Privacy)

    Description
    Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

    The organization meets this standard.

  5. Cause Marketing Disclosures

    Standard 19 (Cause Related Marketing)

    Description
    Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

    The organization meets this standard.

  6. Complaints

    Standard 20 (Complaints)

    Description
    Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.

    The organization meets this standard.

Conclusion

Salvation Army (National Corporation) meets the 20 Standards for Charity Accountability.

BBB Comment


This report covers the national office of The Salvation Army. Evaluations of local Salvation Army offices are completed by local BBBs where available. Visit www.bbb.org to search for local charity reports.

 

Combined Financials

The following financial review covers the National Office of the Salvation Army and all of its affiliates in the USA. This information is based on the unaudited combined financial review for the fiscal year ended September 30, 2018 in The Salvation Army's 2019 annual report.

Total Revenue: $3,863,646,000

Total Expenses: $3,703,604,000

Programs: $3,042,749,000

Fundraising: $253,010,000

Administrative: $407,845,000

Income in excess of expenses: $160,042,000

Beginning net assets: $10,954,701,000

Other changes in net assets: $355,223,000

Ending net assets: $11,469,966,000

Total liabilities: $4,593,257,000

Total assets: $16,063,223,000

 

Complaints

Number of complaints processed by the BBB in the last 36 months: 2

Other issues

The organization addressed the complaint issues brought to its attention: 0

The organization did not address the complaint issues brought to its attention: 2

(These complaints involve resolution of other issues.)

 

 

Purpose

  • Year, State Incorporated

    1899, NY

  • Affiliates

    The Salvation Army Central Territory

    The Salvation Army Eastern Territory

    The Salvation Army Southern Territory

    The Salvation Army Western Territory

  • Stated Purpose

    "to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination."

Programs

The Salvation Army (National Corporation) (The Salvation Army) works with a network of facilities in communities throughout the United States to provide shelter for the homeless, gifts and groceries at Christmas, daycare services, after-school tutoring, scouting activities for boys and girls, job training for displaced individuals, Bible classes for those in prison, summer camps for children, disaster relief and more. During 2019, The Salvation Army reports providing disaster relief to nearly 800,000 people, holiday assistance to over 2.6 million people, and social services to more than 14 million people.

For the year ended September 30, 2019, Salvation Army (National Corporation)'s program expenses were:

Program awareness and support $43,169,549
Education and publications $5,640,881
Training and development $3,548,185
Disaster services $3,100,055
Total Program Expenses: $55,458,670

Governance & Staff

  • Chief Executive

    Kenneth Hodder, National Commander

  • Compensation*

    $0

  • Chair of the Board

    Kenneth Hodder Commissioner

  • Chair's Profession / Business Affiliation

    President

  • Board Size

    7

  • Paid Staff Size

    90

*2019 compensation, as reported by the organization, includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.

Note: Kenneth Holder was hired as the organization’s National Commander and CEO on July 1, 2020 and salary information is not yet available. Prior to that, David Hudson served as National Commander and CEO, earning $94,887 in 2019.

Fundraising

Method(s) Used:

Direct mail appeals, Grant proposals, Internet, Invitations to fund raising events, Planned giving arrangements, Print advertisements (newspapers, magazines, etc.), Telephone appeals, Radio, Cause- related marketing (affinity credit cards, consumer product sales, etc.), Television

Fundraising costs were less than 1% of related contributions. (Related contributions, which totaled $35,096,894, are donations received as a result of fundraising activities.)



Tax Status

This organization is tax-exempt under section 501(c) (3) of the Internal Revenue Code.It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial

The following information is based on Salvation Army (National Corporation)'s audited financial statements for the year ended September 30, 2019.

Source of Funds
Other revenue, primarily from affiliated territories $27,158,265
Legacies and bequests income $20,957,458
Contributions $12,309,245
Investment return, net $6,324,033
Territorial assessments $4,800,000
Sales of publications $2,366,462
Donations in kind and contributed services $1,830,191
Program service fees $252,583
Gain on sale of land, buildings and equipment $180,695
Contributions from split-interest agreements $160,130
Total Income $76,339,062
  • Programs: 90%
  • Administrative: 10%
  • Fundraising: Less than 1%
Total Income $76,339,062
Program expenses $55,458,670
Fundraising expenses $105,459
Administrative expenses $6,655,067
Other expenses $0
Total expenses: $62,219,196
Income in Excess of Expenses $14,119,866
Beginning Net Assets $156,803,683
Other Changes In Net Assets $38,946
Ending Net Assets $170,962,495
Total Liabilities $126,447,352
Total Assets $297,409,847

Note 1: In the above financial section, ‘other changes in net assets’ refers to a change in value of split-interest agreements.

Note 2: As reported in the organization’s audited financial statements for the year ended September 30, 2019, The Salvation Army received in-kind donations totaling $1,830,191 in the form of advertising ($1,325,727), airline flyer miles ($252,700), professional entertainment services ($250,000) and software ($1,764).

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