Issue:  Vol. 44 / No. 43 / 23 October 2014
 
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At 30, SFAF works on financial fixes

NEWS


s.hemmelgarn@ebar.com

San Francisco AIDS Foundation CEO Neil Giuliano said the nonprofit is working to lower the costs of fundraising amid a tough economy. (Photo: Rick Gerharter)
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Thirty years after its founding, the San Francisco AIDS Foundation – which is marking the anniversary this year – is the largest HIV/AIDS-based nonprofit in San Francisco.

With a budget forecast to be just over $24 million this year, the agency, which provides services ranging from HIV testing to syringe exchange, has a lot of money to work with as it strives to drastically reduce new HIV infections in the city.

As of late 2011, about half of the funding the city's HIV Prevention Section was providing through contracts was going to the AIDS foundation and smaller agencies with which the AIDS foundation is working. The foundation serves approximately 14,000 clients. (An unduplicated count isn't available.)

But the nonprofit, where several staff earn $100,000 and up, receives less-than-stellar rankings on how much it spends on programs versus fundraising and other areas, and officials there are working to change that.

"We are investing like never before in San Francisco in regards to reducing HIV infections, getting people tested, and getting people into care," said AIDS foundation CEO Neil Giuliano, a gay man who joined the agency just over a year ago after a stint leading the national Gay and Lesbian Alliance Against Defamation.

Giuliano said that when he evaluated the AIDS foundation after his arrival, what struck him was that to invest more in the community, "we were going to have to adjust things internally."

That's included what SFAF spends on fundraising. According to its most recent tax documents, 21 percent of the foundation's total expenses during fiscal year 2010-11 went toward fundraising.

At least two national charity rating organizations indicate that cutting costs in this area is where the AIDS foundation should focus.

At the Bay Area Reporter's request, Charity Navigator staff examined financial data from the nonprofit for last fiscal year.

They gave the AIDS foundation a preliminary financial score of two out of four stars.

Sandra Miniutti, Charity Navigator's vice president of marketing and CFO, said that despite improvements, SFAF's fundraising costs are "still a little bit high."

The nonprofit's expenses for the fiscal year ending June 2011 were $20,999,560. Of that, it spent $4,410,012 – or 21 percent – on raising money. Miniutti said most charities spend 10 percent or less in this area.

She said, though, that the AIDS foundation is "on the right tack," and if SFAF were "a little bit more efficient in terms of how they fundraise," the score would improve.

In the fiscal year ending June 2010, the agency's total expenses were $18,672,130. It spent $4,756,384, or approximately 25 percent, on fundraising.

Another area of improvement has been the portion of money the AIDS foundation spends on programs.

Of the expenses for the 2010-11 fiscal year, $15,840,803, or about 75 cents of every dollar spent, went to programs, according to their tax documents.

In the 2009-10 fiscal year, the foundation spent $12,223,217, or approximately 65 cents of every dollar, on programs.

"We're looking at these issues," Giuliano said. "We obviously take them seriously."

One of the steps the AIDS foundation has taken to save on fundraising costs is eliminating its participation in the Seismic Challenge bike ride and the Wildflower Triathlon. Those two changes, which save about $200,000, "will be reflected in next year's tax filing," he said.

Asked what figure the agency is working toward, Giuliano said, "I can't tell you today there's an actual percentage. We're evaluating all of our different fundraising platforms" with regard to the costs.

On accountability and transparency, Charity Navigator has given the AIDS foundation four stars. The agency outpaces most other San Francisco nonprofits in the amount of financial data it posts online.

To add to the other gauges it already uses, Charity Navigator has been trying to develop a way to measure outcomes. Miniutti said they "hope to have something to test" in at least one area by the end of the year. She said different types of charities would have different criteria. She indicated, however, that they wouldn't get to health-related groups soon.

Meeting needs

While Giuliano said the Charity Navigator information is important, it's not the only benchmark.

"I certainly hold some value" in tools like Charity Navigator, he said, but "What's more important to me is that we're meeting the needs of the community."

With a boost in funds from acquiring many of the city's HIV prevention contracts, the AIDS foundation is getting some more opportunities to do that.

Newer programs include the Stop AIDS Project, a smaller organization that was experiencing financial difficulties and merged with SFAF last November.

In 2007 SFAF assumed oversight of Magnet, the gay men's health center in the Castro, and the Stonewall Project, which offers substance abuse treatment to gay and bisexual men.

The AIDS foundation has 130 employees. There were 95 when Giuliano started.

In interviews, two clients of Magnet expressed appreciation for the AIDS foundation's services. They didn't seem concerned about the agency's financial details.

Dean Rodgers, 28, goes to Magnet about once every six months for testing, and hes also a volunteer there.

Rodgers said he likes the "community feel" at Magnet. SFAF's financial details aren't something he thinks about, he said, and the Charity Navigator rating doesn't mean anything to him. He said he's always felt like he's gotten "100 percent" of what he needs.

Another one of the people benefiting from the AIDS foundation's services is Scott Smith, 38. In a January interview, Smith said he goes to Magnet every six months to get tested for HIV and other STDs. He always practices safe sex, he said, "but you never know. I've heard of condoms breaking."

Magnet has "made it much easier for me to get tested and know my status, and there's peace of mind in that," Smith said.

Smith has also raised money for SFAF through participating in the AIDS/LifeCycle, the annual bike ride that benefits the foundation and the L.A. Gay and Lesbian Center. The 2011 ride raised a record $13.1 million.

Smith said he doesn't think about the AIDS foundation's finances, and he said he was unaware of salary figures for Giuliano and other agency staff.

Giuliano said the AIDS foundation wants to provide competitive salaries and "retain high-caliber talent. That's what our clients deserve, and that's the level of service we have to provide."

Giuliano's salary is $249,000. The total for the AIDS foundation's leadership team, which consists of Giuliano and five other people, was more than $1.1 million.

James Loduca, the AIDS foundation's vice president of public affairs, provided a list of his and other leadership team members' salaries – all make six figures – but he wouldn't say how many of the agency's other staff earn $100,000 or more.

Another score

At the B.A.R.'s request, staff at CharityWatch, another national ratings organization, examined SFAF's financial information for fiscal year 2010-11. It gave the nonprofit a C, or "Satisfactory," grade.

According to its calculations, the portion of total expenses that are spent on programs is 68 percent, rather than the 75 percent that appears most obvious in the AIDS foundation's tax filing.

CharityWatch President Daniel Borochoff said that's because the AIDS foundation counts the educational message in its solicitations as a program expense, and CharityWatch doesn't.

The charity-rating group also looks at how much it costs an organization to raise $100.

CharityWatch calculated it takes the AIDS Foundation as much as $47 to do that. He said if it weren't for the high fundraising costs, the AIDS foundation would be in the B, or "Good," grade range. To get there, SFAF's cost to raise $100 would have to be in the range of $16 to $30.

Giuliano wasn't available to address questions related to CharityWatch Tuesday, April 3.

However, in an email Tuesday, Loduca said, "We have invested heavily this year in expanding our free local programs and services for the community. While the ratings agencies are not our only guide, we take our responsibility to the community seriously and have been taking a very close look at all our fundraising platforms and have eliminated some and modified others."

Roger Doughty, executive director of the San Francisco-based Horizons Foundation, which has distributed millions of dollars over the years, urged some caution when considering the charity ratings.

"They can be extremely useful," he said, but they "can also lend themselves to overly simplistic analysis." Doughty said it's important to look at trends over time, among other things.

Dan Dodd, 46, is a donor to the AIDS Foundation. His contributions include underwriting the AIDS/LifeCycle kickoff party for the last two years, at a cost of $5,000 each time. He's participated in the bike ride for the past six years. He estimated that altogether, he's raised more than $50,000 for the AIDS foundation, in addition to backing the kickoff parties.

Dodd said the low Charity Navigator figures wouldn't impact his support of the organization.

"The passion and drive of everyone there that I've come into contact with is second to none," he said.






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