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Rank in Pittsburgh charities declines
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Two years after Pittsburgh's charities were ranked as the best performing in the U.S., the city has dropped to 16th on a survey of how nonprofits stacked up in the 30 largest philanthropic markets nationwide.
The new survey by Charity Navigator ranked the largest nonprofits in each city based on a combination of factors including assets, contributions, expenses and accountability to donors.
Houston topped the list, up from second place in 2010, the last time Charity Navigator conducted the study.
Rounding out the top five were Kansas City, St. Louis, Cincinnati and Portland, Ore.
Orlando ranked last.
Charity Navigator is a Glen Rock, N.J., organization that regularly tracks data on 5,500 nonprofits. The latest study included about half of those nonprofits; 44 are based in Pittsburgh.
Last year there was no survey because Charity Navigator was modifying its ratings system to include new categories such as transparency and best practices, said Sandra Miniutti, vice president, marketing and chief financial officer.
Pittsburgh's dramatic decline in the rankings most likely can be traced to growth factors, such as incoming revenues, she said. For instance, revenue growth at Pittsburgh's largest nonprofits was 1.4 percent, compared with a national median growth rate of 2.3 percent.
Administrative expenses for nonprofits here were 9.4 percent of budgets, slightly higher than the national median of 9.3 percent.
On a brighter note for the city, however, total assets of local nonprofits were almost double the national median. The 44 local organizations surveyed had total assets of $15.4 million compared with median assets of $8.5 million for the other markets.
"Pittsburgh is an older philanthropic market with quite a bit of working capital that's higher than the national median," said Ms. Miniutti. "That's positive, although growth and revenue spending was down. Charities in Pittsburgh have a lot of assets ... rainy day funds they need to help survive this tough [economic] time."
The recession, in fact, might be a reason the city's ranking fell, she said.
"Declining revenue growth may in part have to do with Pittsburgh having a lot of large arts groups, more than most markets. Now, [since the] recession, donors are moving their investments away from arts and to groups that provide services to the needy."
Of the 44 local nonprofits analyzed for the study, 11 were arts or culture-related organizations, nine were in human services, five were dedicated to public benefit, five to animal causes, four to health, four to education and two apiece to the environment, religion and international issues.
Among the categories in which Pittsburgh ranked higher than the national median was compensation for its nonprofit chief executives. The average compensation for the 44 organizations here was $145,506 compared with a national median of $137,780.
Despite the report's findings that local nonprofits might be experiencing sluggish revenue and programming growth, contributions were strong. Donations to Pittsburgh's nonprofits totaled $4.68 million, compared with a national median of $3.63 million.
Peggy Outon, executive director of the Bayer Center for Nonprofit Management at Robert Morris University, cautioned that the Charity Navigator report might not be an accurate picture of how nonprofits operate because of significant differences in factors such as size, staff, and expenses.
"While we need to pay attention to national accountability sources like Charity Navigator, we need to recognize that does not tell the complete picture. There's really no substitution for donors learning as much as they can about the effective use of their money [by nonprofits]."
First Published June 5, 2012 12:00 am
