Action Against Hunger -- USA Is a Term Paper

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Action Against Hunger -- USA is a not-for-profit charity based in New York City. This international, non-governmental, humanitarian relief organization's stated purpose, as stated on the nonprofit Internet directory of Guidestar.com, is to lead the fight against hunger and malnutrition worldwide. Founded in 1979, Action Against Hunger states that its efforts saved over 4 million people a year in the year 2000 in 40 countries. This is indeed an admirable and impressive statistic, although verifying its accuracy is not possible with the parameters of this paper.

What are feasible questions to pose within the parameters of this paper, however, are questions about whether the grants and contributions made to Action Against Hunger are being used appropriately by the organization. A donor to this organization might wish to know how much in need this relief organization is in terms of funds -- does the organization need the donor's money. A federal government oversight body might wish to know how in need this organization is of government grants in terms of the considerable labor costs used by the organization. A member of the public at large might wish to know if the majority of funds of the company are being used to fight hunger. In other words, are the funds being used for the organization's work instead for less immediate (though still, to a certain extent, necessary) aspects of the organization such as advertising, legal costs, accounting costs and employee salaries of the board of directors and employees.

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Before examining these issues, it is important to note that while budgeting for a nonprofit organization is just as important as it is for profit-oriented organizations, the budget process for non-profit organizations is different than for profit organizations. Not-for-profit organizations such as Action Against Hunger budget on the basis of cash flows rather than on a revenue and expense basis. In other words, Action Against Hunger budgets on the basis of expenditures and receipts, rather than with the purpose of accruing revenue. Thus the starting point from an accountant's point-of-view are the expenditures of the organization, not how much money is received, and the primary goal of the organization is to find revenue to support the expenditures.

In examining Action Against Hunger's I 990 form for the year 2000, it becomes quite clear that the organization is very much in need of contributions from individual donors. For an internationally-based organization, its revenue from individual contributions is relatively low, at 4, 205, 210. This sum is relatively insignificant for an international organization with relief efforts that stretch as far as Africa, Asia, Russia, Eastern Europe, and South and Central America. The organization does not merely attempt to provide food to these countries; rather it attempts to make changes in the infrastructure of impoverished and developing nations so that these nations may learn to feed themselves on a permanent and self-enclosed basis.

The majority of funds received by the organization come in the form of.....

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