If you look at the Freedom Alliance website, it also appears that scholarships are not the only thing they do. So looking only at payout for scholarships, while ignoring the other missions, would skew the results also.
Schlussel takes that into account.
The way you find out what they are doing is read their IRS Form 990, where all their outlays and income flows are detailed. In 2007, for instance, they laid out $895,000 as grants. That was one part of their “program expenses,” namely the part that actually, really, tangibly, reached the targeted needy population. The rest of their program expenses were salaries, postage, printing, office supplies, etc.
The only other program expense that might be of interest as reaching the target needy group would be “postage”. We might assume that it is so high, because of a program to deliver “care packages” overseas. That would be reaching the targeted population.
One other point, they put aside $2.4 million into “investments” in 2007. This could be an endowment for scholarships. There is some evidence that it is. But if any of the interest/dividends were distributed, say as scholarships, it would come under “cash grants.” Again, that was $895,000
Finally, with investment income, donations, and all, FA income for 2007 was $12.4 million.
If you combine $895,000 in grants and $1.2 million in postage (ALL for care packages!) you get a total outlay to the target charity population of $2.1 million on income of $12.4 million. That is an outlay of 2.1/12.4 x 100 = 16.9%.
So, for every dollar in, $0.17 went to the targeted charity, and $0.83 went somewhere else. That somewhere else is salaries, fundraising, printing, travel, etc. etc. Also, some went for advertising and instruction encouraging military service, and similar things, according to their website.
Since I have run a nonprofit since 1992, I can run the same analysis on my own IRS forms. In our case, for every dollar in, $0.86 goes to the targeted charity and $0.16 goes somewhere else.
Analyzing both public charities by the same criteria.