Impact & Accountability

Financial Stewardship

“The earth is the Lord’s and all that is in it” (Psalm 24:1).

Lutheran World Relief’s core value of Stewardship calls us to employ the highest standards of responsible planning and management of resources.

To that end, LWR wisely and prudently invests our financial resources for growth, so that we may develop sustainable programs that make a lasting impact in the lives of more and more people experiencing poverty and marginalization around the world.

Good Stewardship = Spending Donations Wisely
Good Stewardship = Investment
Knowing when to invest resources to grow
Good Investment = Impact
Growing LWR’s capacity to help more people

View LWR’s financial reports, such as Finance Form 990 and Audited Financial Reports.

Ratings from External Charity Watchdogs

LWR’s Efficiency: 84.9%*

*Program Efficiency Ratio = (Total Program Expenses) / (Total Expenses)
Program Work - 84.9%
Fundraising - 8.5%
General/Admin - 6.6%

What makes a healthy efficiency ratio?

Charity watchdog organizations, such as those listed above, use financial efficiency as one measure among many of a nonprofit’s health and accountability. What’s a healthy range?

  • Charity Navigator recommendation: 75% or higher
  • Better Business Bureau recommendation: 65% or higher

An efficiency ratio that is too high may indicate that an organization is under-investing in necessary management infrastructure.

What are non-program expenses?

Non-program expenses, often referred to as “overhead,” include many of the basic costs of doing business, including:

  • Stewardship and accountability, including oversight, budgeting, general record keeping and financing
  • Leadership and governance
  • Staff hiring, retention and development

Interested in learning more about LWR’s financial stewardship? We publish all official tax documents and financial audits on our website.

What are others saying about efficiency?

The Overhead Myth

In a historic move, the leaders of the country’s three leading sources of information on nonprofits — GuideStar, Charity Navigator, and BBB Wise Giving Alliance — penned an open letter to the donors of America denouncing the “overhead ratio” as a valid indicator of nonprofit performance.

The Way We Think About Charity is Dead Wrong

At TED2013, activist and fundraiser Dan Pallotta calls out the double standard that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend — not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses). In this bold talk, he says: Let’s change the way we think about changing the world.

Charity Ratings Based on Administration Costs can do More Harm Than Good

Based on Saundra Schimmelpfennig’s own experience tracking aid in Thailand after the 2004 Indian Ocean tsunami, she reflects on examples where an emphasis on low administration costs did more harm than good.

Evaluating Charities

Lauren Schmidt, at effectivism.net discusses three of the oldest and best known charity evaluators, all of which grade organizations in large part according to financial metrics. She also discusses the controversy over using such metrics, and the pros and cons of these sites.