FARGO — The almost 500 charities that participate in the annual Giving Hearts Day online fundraiser are screened to determine their eligibility as suitable nonprofits.

Dakota Medical Foundation, which sponsors the fundraiser and assists with its organization, has a list of requirements and preferences for charities to meet in order to qualify.

To be eligible, all nonprofits must be recognized by the Internal Revenue Service and be in good standing, said Jennifer Offerman, executive manager of the Impact Institute, an affiliate of Dakota Medical Foundation.

Giving Hearts Day, which this year will be Thursday, Feb. 13, has grown steadily in donors and contributions, and organizers expect this year will set another fundraising record.

Last year, more than 30,000 people donated $16.3 million. More than $71 million has been raised since it launched in 2008.

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“Any charity in the region can apply,” Offerman said, adding that 50 applications were received this year from nonprofits that haven’t participated previously.

“With screening, it all starts with the application,” she said. Once applications are in hand, the review committee schedules a call with the charity to review the application.

Screeners also review recent disclosure forms that nonprofits must file with the IRS, listing revenues and expenses including executive compensation and any payments to professional fundraisers among other “functional expenses.”

Giving Hearts Day sponsors prefer organizations have an annual board of directors review of the organization’s strategic plan, executive director’s performance review and independent financial audit that is available for public inspection.

Qualifying charities then participate in coaching on fundraising strategies. Qualifying charities also must be able to raise at least $4,000 in matching funds. Participating charities must pay a subscription, which helps to cover training, coaching, marketing and website costs, Offerman said.

Executive pay

According to Charity Navigator, which rates charities and provides access to IRS disclosure forms for nonprofits, average CEO compensation is “in the low to mid six figures” among the charities it rates.

Nonprofits are required to list the CEO’s pay and any current officers earning more than $100,000 per year.

Among the top 10 Giving Hearts charity recipients in 2019, Fraser Ltd. reported the highest executive compensation, $371,955, including $180,000 for the CEO. Board chairwoman Brenda Kaspari said the total reflects pay for three executives with combined experience of 42 years, and comprises a small fraction of the organization’s $16 million budget. She said Fraser’s administrative costs range from 8% to 11% of total expenses.

Most charities listed by Charity Navigator spend at least 75% of their expenses on programs, leaving no more than 25% for administrative or fundraising costs.

Professional fundraisers

Charity Navigator describes professional fundraisers as "not necessarily a bad thing."

“Professional fundraisers can be more efficient and effective,” but if a charity is spending more than is going toward the charitable mission, it should reconsider, the site said.

Among the top Giving Hearts recipients in 2019, one, Great Plains Food Bank, reported using a professional fundraiser. The food bank paid a professional fundraiser $375,454, yielding contributions of $1.1 million, netting $891,647.

Jared Slinde, a spokesman for Great Plains, said “working with a fundraising firm is extremely common for food banks in the U.S. and all their efforts are independent of everything that we do for Giving Hearts Day. … We work with a firm to help us share, in the most efficient way possible, stories of people living with hunger and the impact our donors are making on their lives. Together with their support, we served 97,000 people annually.”