United Hands Relief's 5.9% overhead and the limits of my lean and bloated metric

I look at a few more charities readers wanted me to consider.

You are reading a note from the Working Towards Ehsan Newsletter, covering Muslim Non-Profits and Leadership. This is a service of Islamic Estate Planning Attorney Ahmed Shaikh. Subscribe to this newsletter below:

After my previous look at a few well-known (and some less so) US charities in the United States that do international work, a few readers suggested I look into a few more, and I have. 

A few caveats. I am looking at domestic overhead expenses based on the most recent 990 available (I looked at other data in the case of United Hands Relief). Unfortunately, the IRS has been slow in making recent 990s publicly available, and not all charity websites make them available. So in some cases, I am working with outdated information. 

As before, I am not endorsing any of them as overhead is part of a multi-pronged analysis that should be done for each organization. This analysis often cannot be done because charities often don’t provide needed information, especially for zakat. As I mentioned before, this includes a written zakat policy and a separate zakat accounting. 

Unable to tell domestic overhead, but no-go on zakat: Syrian American Medical Association (SAMS)

SAMS provided me with a current 990 by email. I initially decided not to include them in my earlier list, even though it’s a popular place for Muslims to donate, especially in light of the recent earthquake in Syria and Türkiye.  However, from my review of the website, it seemed like they did not solicit zakat.  Later in Ramadan, they sent a mailer with a “zakat” checkbox, and they have been advertising zakat using Google AdWords.  From what I can tell, the website still does not provide a specific zakat option or discuss the subject.

The organization has a heavy payroll and does not distinguish between payroll overseas and payroll in the United States, which is why I cannot determine a domestic overhead percentage. It may be a fine organization to donate to. However, I don’t see a zakat case here since it seems like an afterthought for the organization. 

36.5% overhead: Givelight Foundation (990 Source) 

This orphan-focused charity based in the San Francisco Bay area is popular with Muslims in that region. It turns out to be the most expensive in today’s survey and one of the more expensive overall as well.

19.2 overhead: Amoud Foundation (990 Source) 

This looks like a promising non-profit focused on the Horn of Africa region. The organization has a 100% zakat policy. I would like to learn more about this organization and hope they will do more to describe the policy in detail.  However, for international zakat donors, this one deserves a closer look.  

15.1% overhead: B Desh Foundation (990 Source) 

As you might guess, this organization focuses on Bangladesh (including Rohingya refugees). Like other organizations, they are unclear on what they do with zakat and how it may be treated differently from other donations. 

5.95% overhead: United Hands Relief (UHR) (990 Source)-but not so fast

This looks more impressive than it actually is. The vast majority of UHR’s contributions are “in-kind” contributions, so food, medicine, and equipment. So cash contributions are more likely to go to overhead since you cannot pay rent and salaries with bags of rice. You can find a copy of the audit report here. UHR does not have any donor-restricted funds at all. Zakat should always be donor restricted.

Based on my review of both the audit and the 990, it looks more like the expenses for cash donations are 25.1%.

This demonstrates a weakness of this my domestic overhead metric. It will make some charities that take in-kind donations look better. Most donors reading this newsletter are donating cash and not bandages. Like other organizations in the sector, I would like to see UHR develop a zakat distribution policy and a zakat transparency report. 

Let’s all continue to improve

There were a few more organizations readers had requested, but I could not get to them for various reasons, usually because I could not get enough information about them. 

I hope to learn more about the organizations I have written about and those I have not. All organizations must continually assess how they can improve transparency and how seriously they have taken their role as a custodian of zakat funds. 

Donors (who I write for) also need to assess their commitment to excellence in how they give zakat and how they may improve in the future. I need to improve my analysis and communication in this newsletter, and I hope readers forgive my shortcomings. 

If there are international charities you like that I missed this Ramadan, please feel free to let me know in the comments.