HSUS Overhead Needs an Overhaul

The Humane Society of the United States (not affiliated with your local humane society) loves to pat itself on the back every time it gets some kind of recognition. But like most propaganda, it can’t stand up to much scrutiny.

HSUS likes to brag about its supposedly high spending on program services. And if you looked at its tax return, you might think that HSUS only spends 22 percent of its budget on overhead costs, which would be reasonable. But a new watchdog report from Animal People News finds that HSUS really spends twice as much on overhead—43 percent. (Click here to order a copy.)

[UPDATE 10-11-11: We crunched the numbers on HSUS's newly released tax return using the Animal People model and found that HSUS's overhead costs last year totaled 45.7 percent of its budget.]

How can this be? We can thank a little accounting chicanery.

The IRS allows some fundraising costs to be classified as educational “program” costs. The idea is this: In a four-page fundraising letter, an organization might use the first couple of pages to educate the potential donor about some problems or a situation that deserves attention.

Animal People uses a stricter but more realistic metric for measuring overhead costs. It asks of mailings, “Would this have been sent if postal rules forbade the inclusion of a donor card and a return envelope?”—effectively making the sole purpose of the letter education.

High overhead costs are a long-running problem at HSUS. Since 1998, HSUS’s adjusted overhead spending (according to the Animal People model) hasn’t dropped below 43 percent (in 2009), and has ranged as high as 55 percent (in 2004). That’s incredibly wasteful. The bottom line is that all of those HSUS doo-dads, tchotchkes, and gizmos are adding up.

HSUS is by no means the only charity that plays games with overhead costs. And there are certainly some nonprofits that blow far more than 43 percent of their budget on overhead. But Animal People’s report shows that there are plenty of animal charities that don’t try to hide the ball, and don’t have excessive overhead costs.

Animal People finds that the Massachusetts SPCA, for example, spends half as much as HSUS on overhead, while Connecticut Humane Society only spends 14 percent of its budget on overhead. (And unlike HSUS, these groups actually run pet shelters.)

If you don’t want a good chunk of your donation winding up at a factory fundraiser or in a bloated pension plan, then don’t give to HSUS. Find an animal welfare charity near you that spends its resources efficiently and give it your time, money, or supplies.