Animal Cancer Foundation | SAVING THE LIFE OF A LOVED ONE | | Comprehensive analysis of ACF’s mission, organization and financial performance. | | Martha Morales | 11/29/2011 | |

Animal Cancer Foundation’s Mission Statement To fund and develop research focused on the biologic similarity of cancer in pets and people that will expedite therapeutic and preventive benefits for both.
To educate the public and scientific community about the biologic similarity of cancer in pets and people; also, to communicate the ways in which comparative oncology is accelerating the treatment, prevention and ultimate eradication of cancer.
Financial Analysis Based on the form 990 from 2009, Animal Cancer Foundation uses the cash method, therefore, does not include accounts receivable and other accrual items of income under the income section or accounts payable or other accrual items of expenses under the expenses section. The total revenue for the year ending June 30, 2010 was for $64,186 and the total expenses were $89,867. These numbers led me to conclude that the company has a deficit of $25,681, meaning that the organization may suggest future financial difficulty. Analyzing revenues and expenses figures for the last 5 years from the forms 990 (please see Graph No. 1 Revenues vs. Expenses), I can support the idea that the organization’s ability to generate income has decreased and their expenses should be higher. This could be due several reasons such as economic crisis, competence, advertising, marketing, strategy, technology. Based on the form 990, most of the revenue is obtained from contributions. Nowadays we all know how the economy has gone down making a big struggle for donors to make significant contributions. Therefore, nonprofit organizations might be affected by this economic down fall. Another important hypothesis on why they are struggling to increase income, can be due to contributors losing faith in the organization. The year ending June 30, 2010, was the year where ACF had the lowest amount of contributions, gifts and grants ($73,921) compared to the last 5 years (Shown on the Form 990 under Support Schedule for Organizations – Section A. Public Support).
Revenues vs. Expenses
Graph No. 1 The current deficit they are experiencing may reflect something unusual for the year being reported on and may have little bearing on the future. According to Graph No. 1 Revenues vs. Expenses, in 2006 the revenues were $98,510 and expenses for $39,030 having an excess of $59,480. But in 2007, the deficit reached a significantly higher mark of $91,926. While in 2008, revenues and expenses were balanced having excess of $33,773. Having deficit over time, the organization may have their financial score decreased.
Under Statement of Program Service Accomplishments, the company provides a fairly good idea of its activities. The organization’s financial statement shows that $67,714 was used to study and fund novel therapies aimed at eliminating cancer as a health problem in pets and people through education, prevention and research. This is descriptive data and it’s helpful to know if ACF is doing work effectively and efficiently. However, this information cannot reveal if the organization is really achieving satisfactory goals.
Financial Efficiency Performance Metrics
In order to analyze a nonprofit’s date to date finances we must compute its performance metrics. A good charity spends less money to raise more money. Keeping administrative costs at a minimum are of the upmost importance. A good nonprofit concentrates a majority of their spending to the programs and services they provide. Below are the performance metrics which analyze the efficiency standing of the Animal Cancer Foundation: * Program Expenses – Program expenses consist of the costs an organization incurs when providing its programs and services. Approximately 75.34% ($67,714 Program expenses/$89,867 Functional expenses = 75.34%) of the ACF’s total expenses are spent on its programs and services. From 2006 to 2009 the ACF’s combined deficit was $24,354 and the average was $6,088.50, or 6.77% of $89,867 in total functional expenses. Deducting the 6.77% from the organization’s program expenses score, adjusting it to 68.57%. The score will be 6.8.

* Administrative Expenses – Administrative expenses are the percent of total functional expenses spent on management and administration. The percent of total functional expenses is expressed by dividing administrative expenses by the total of functional expenses ($30,000 administrative expenses/$89,867 functional expenses = 33.38%). Based on the rating table, the converted score is 0. This is due to fact that 33.38% of the functional expenses are spent toward salaries.

* Fundraising Expenses – fundraising expenses are the percent of total functional expenses spent on fundraising. Therefore, $10,551 of fundraising expenses divided by $89,867 of functional expenses equals to 11.74%, resulting in a converted score of 7.5. The score is relatively high; however, the meaning of this figure might be misinterpreted. An organization that spends more on fundraising may have more profit. For example, the Animal Cancer Foundation spent $10,551 on fundraising events in 2010 and raised $14,874, resulting in a net income of $4,323.

* Fundraising Efficiency – Fundraising efficiency is the amount the nonprofit organization spends to raise $1.00. As a result, the general converted score obtained is 2.5 ($10,551 fundraising expense/$14,874 contributions received = $0.70). This figure may make me say that the ACF, in instance, may be accomplishing their mission and their efforts are being recognized as useful and beneficial.
Financial Capacity Performance Metrics Financial capacity performance metrics is used to determine if the organization is consistent in growing and maintaining financial stability and if it’s able to continue to provide services for the years to come. Below are the performance metrics which analyze the efficiency standing of the Animal Cancer Foundation: * Primary Revenue Growth and Program Expenses Growth – Primary revenue growth and program expenses growth are measured with an standard formula which uses the value measured at the end of the interval analyzed and the value measured in the first year of the interval analyzed.
[(Yn/Y0)(1/n)]-1 Revenue Growth: [(64,186/98,510)(1/3)]-1 = -0.78, based on the conversion score table, the score is 2.22%.
Expenses Growth: [(89,867/39,030)(1/3)]-1 = -0.24, based on the conversion score table, the score is less than 0 (0 Score). * Working Capital Ratio- Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In this case, Animal Cancer Foundation doesn’t have any liabilities, based on their Form 990. Therefore, their working capital is $63,641. To calculate the working capital ratio, we divide $63,128 working capital by total expenses of $89,867 = .70 years. This result gives us a score of 7.5; meaning that this is how long the organization can sustain its level of spending using only its net available assets.

Financial Health Score Adding all the figures, the result of the financial health score is 26.5, issuing only one star to the organization
Accountability and Transparency Ratings Table Starting with 70 points for Accountability and Transparency, various deductions are applied to determine if the organization is meeting the individual performance metrics. The following score is not 100% accurate as some of the deduction statements do not apply to the ACF. The Accountability & Transparency score is 29, issuing only one star to the organization.
Overall Score and Star Rating The Overall Score and Star Rating is a measurement of the distance between the organization’s Financial Heath and its Accountability and Transparency scores. After measuring the overall score with the standard formula, our results indicate that the organization only has one star with a score for 27.73.
Conclusion
In conclusion, the Animal Cancer Foundation’s future appears to be uncertain. Over the last 4 years the foundation’s revenue to expense ratio has been inconsistent. One year revenues are up and the next year revenues are down. This trend has been consistent over the last 4 years. Also, their financial efficiency performance metrics in 2010 have been less than favorable.
Another hypothesis I came up with was to imagine that the Animal Cancer Foundation was a publically traded company and I was an investor. If I was considering investing in this company I would be hesitant based on the small amount of capital, inconsistent figures over the last 4 years, and the fact that they have only been in operation for 12 years. On the flip side, if I were the type of investor that liked to gamble it could be safe to say that every other year will be profitable. However, nonprofit organizations are not meant to create profit; but having a deficit is not a good condition either. Optimum conditions could be found were the Revenues and Expenses breaking even.
In the end I’m a firm believer in the Animal Cancer Foundation’s cause and existence. Unfortunately, this organization was founded during a time when the economy was strong and now appears to be struggling to stay above water as a result of the current economic crisis. After considering all of this information, it is my opinion that the Animal Cancer Foundation has been now surviving for almost 13 years and could be doing so for many more years to come.