DOCTORS WITHOUT BORDERS FINANCIAL ANALYSIS

Marie Hoffman and Oscar Ochoa

Army-Baylor MHA

28 August 2014

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Citations

http://www.doctorswithoutborders.org/ 333 7th Avenue, New York, NY 10001-5004 | 212-679-6800 A 501(c)(3) tax-exempt organization. Federal Identification Number (EIN): 13-3433452

http://www.charitynavigator.org/ Charity Navigator 139 Harristown Rd Suite 101 Glen Rock, NJ 07452 2

Company Overview Who MSF is:

Doctors without Borders, or Medicines Sans Frontiers (MSF), is a humanitarian-aid non- governmental organization that currently works in 70 countries around the world, providing medical aid where it is needed most- in armed conflicts, epidemics, natural disasters, and other crisis situations.

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Company Overview History and Principles:

Founding: French-founded as a response to the 1967 conflict in Biafra. Officially established in 1970, merged with the French Medical Relief to create MSF. MSF’s first mission was to the Nicaraguan after the 1972 earthquake which killed between 10,000 and 30,000 people. MSF Charter: Committed to remaining neutral, impartial, and ethical in its work around the globe. Nobel Peace Prize: Awarded in 1999, “in recognition of the organization’s pioneering humanitarian work on several continents” www.nobelpeaceprize.org/

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Company Overview History and Principles:

Founding: French-founded as a response to the 1967 conflict in Biafra. Officially established in 1970, merged with the French Medical Relief to create MSF. MSF’s first mission was to the Nicaraguan after the 1972 earthquake which killed between 10,000 and 30,000 people. MSF Charter: Committed to remaining neutral, impartial, and ethical in its work around the globe. Nobel Peace Prize: Awarded in 1999, “in recognition of the organization’s pioneering humanitarian work on several continents” www.nobelpeaceprize.org/

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Company Overview Structure, location, size

Locations: MSF was started by French doctors and its first office was in Paris, but there are currently 19 national offices and 9 branch offices around the world, with no “main” office. Governing body: MSF has an International General Assembly (IGA), which is comprised of two representatives from each MSF partner section as well as two representatives per MSF Association. Size: In 2012, MSF sent 376 US-based aid workers on assignments overseas.

333 7th Avenue 2nd Floor

New York, NY10001-5004 USA

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HC Sub-industry: nonprofit sector, refers to federal tax-exempt organizations that have 5019C)(3) public charity status.

100% donor dependency, unlike charity organizations such as the Salvation Army (58%).

60th largest U.S. Charity, http://www.forbes.com/top-charities/list/

Major Issues since 2012:

1.) Straying from roots- MSF is an A-political organization

2.) Restricted vs Unrestricted/ Condition (10% of budget) A. Condition vs Restricted

B. Temporarily Restricted vs Temporarily Restricted

The majority of funds raised are unrestricted, meaning funds are directed to priority. medical projects first and foremost, not to specific project envelopes (such as vaccinations).

3.) Reputation of solving the symptom and not the disease.

Operational Overview

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HC Sub-industry: nonprofit sector, refers to federal tax-exempt organizations that have 5019C)(3) public charity status.

100% donor dependency, unlike charity organizations such as the Salvation Army (58%).

60th largest U.S. Charity, http://www.forbes.com/top-charities/list/

Major Issues since 2012:

1.) Straying from roots- MSF is an A-political organization

2.) Restricted vs Unrestricted/ Condition (10% of budget) A. Condition vs Restricted

B. Temporarily Restricted vs Temporarily Restricted

The majority of funds raised are unrestricted, meaning funds are directed to priority. medical projects first and foremost, not to specific project envelopes (such as vaccinations).

3.) Reputation of solving the symptom and not the disease.

Operational Overview

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• Doctors Without Borders USA, Inc., is recognized as tax exempt under section 501(c)(3) of the Internal Revenue Code. EIN: 13-3433452

• MSF strives to operate efficiently and to minimize fundraising and administrative costs. From 1995 through 2013, MSF-USA allocated more than 85 percent of its expenditures to MSF's social mission–programs and public education activities. Maintaining this standard is a high priority for MSF. – 2005 Afghanistan

• http://www.doctorswithoutborders.org/about-us/financial-information

Financial Overview

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• Top financial concerns – Securing predictable and sustainable funding during

an uncertain economic climate. – Maintaining and improving the quality of our

programs, especially those that also rely on international funding from large global institutions for such things as drugs, vaccines, and emergency food aid.

– Having the necessary reserves to allow us to respond to new emergencies as they occur.

• http://www.doctorswithoutborders.org/about-us/financial-information

Financial Overview

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Fundraising Efficiency Ratio:

The amount spent to raise $1 in charitable contributions. To calculate a charity's fundraising efficiency, we divide its fundraising expenses by the total contributions it receives.

2013: MSF spends $0.129 for every $1.00 raised through charitable contributions. 2012:MSF spends $0.117 for every $1.00 raised through charitable contributions. 2011:MSF spends $0.125 for every $1.00 raised through charitable contributions. Doctors without Borders: $189,249,536

Mercy Corps total contributions: $231,572,182 Fundraising Efficiency : $.04 National Peace Corps total contributions: 1,232,763 Fundraising Efficiency : $.04

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Fundraising Efficiency Ratio:

= .125 or $.125

spent for every dollar raised

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Fundraising Efficiency Ratio:

Fundraising Efficiency Ratio: 2011 Total Public Support 2011 ($180,794,798.00) Total Fundraising Expenses 2011 ($24,517,940.00)

= .125 or $.125

spent for every dollar raised

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Program Expenses Ratio:

Program Expenses:

This measure reflects what percent of its total budget a charity spends on the programs and services it exists to deliver. Dividing a charity's program expenses by its total functional expenses yields this percentage.

2013: 87% of MSF’s total budget is spent on programs and services.

2012: 86% of MSF’s total budget is spent on programs and services.

2011: 86% of MSF’s total budget is spent on programs and services. Doctors without Borders: $189,249,536

Mercy Corps total contributions: $231,572,182 Program Expenses: 83.4 National Peace Corps total contributions: 1,232,763 Program Expenses: 84.8% 14

Program Expenses Ratio:

Program Expense Ratio: 2013 Total Program Expenses ($189,259,642) Total Expenses ($216,641,398)

= 87% of total budget is

spent on programs and services

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Return on Equity: 2013 ROE

Net Income: $4,938,777

Net Assets:$165,876,600 = 3.0%

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DOCTORS WITHOUT BORDERS USA, INC. , FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, DECEMBER 31, 2013 AND 2012

Return on Assets: 2013 ROA

Net Income: $4,938,777

Total Assets:$176,861,938 = 2.8%

Higher ROAs are favorable for most companies but too high of an ROA for a nonprofit charitable organization is not good.

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DOCTORS WITHOUT BORDERS USA, INC. , FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, DECEMBER 31, 2013 AND 2012

Recommendations

1. Working Capital ration Having the necessary reserves to allow MSF to respond to new emergencies as they occur. 0.77 years

2. Securing Sustainable Funding Securing predictable and sustainable funding during an uncertain economic climate.

Oxymoron in the charity world.

3. NYC Office Lease

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Recommendations

1. Working Capital ration Having the necessary reserves to allow MSF to respond to new emergencies as they occur. 0.77 years

2. Securing Sustainable Funding Securing predictable and sustainable funding during an uncertain economic climate.

Oxymoron in the charity world.

3. NYC Office Lease

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