Charity Review

  • Issued: November 2016
  • Expires: November 2018

Population Services International

Standards Not Met

  • 1
  • 6
  • 7
  • 14
  • 16
  • 17

202-785-0072

1120 19th Street, NW, Suite 600
Washington, DC 20036

http://www.psi.org

202-785-0072

1120 19th Street, NW, Suite 600
Washington, DC 20036

http://www.psi.org

Standards Not Met

This organization does not meet one or more of the 20 Standards for Charity Accountability. Click the conclusions section below for more information.

Standards For Charity Accountability

Governance

  1. Board Oversight

    Oversight of Operations and Staff: Standard 1

    Description
    Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

    PSI does not meet this Standard because its board of directors does not:

    • Have a voting member of the board who is assigned the responsibility of serving as the treasurer. In general, the board’s treasurer helps provide independent oversight of the organization’s finances.

  2. Board Size

    Number of Board Members: Standard 2

    Description
    Soliciting organizations shall have a board of directors with a minimum of five voting members.

    The organization meets this standard.

  3. Board Meetings

    Frequency and Attendance of Board Meetings: Standard 3

    Description
    An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

    The organization meets this standard.

  4. Board Compensation

    Compensated Board Members: Standard 4

    Description
    Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

    The organization meets this standard.

  5. Conflict of Interest

    Conflict of Interest: Standard 5

    Description
    No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

    The organization meets this standard.

Measuring Effectiveness

  1. Effectiveness Policy

    Board Policy on Effectiveness: Standard 6

    Description
    Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

    PSI does not meet this Standard because:

    • The board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.

  2. Effectiveness Report

    Board Approval of Written Report on Effectiveness: Standard 7

    Description
    Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

    PSI does not meet this Standard because:

    • It has never completed an effectiveness assessment.

Finances

  1. Program Expenses

    Program Service Expense Ratio: Standard 8

    Description
    Spend at least 65% of its total expenses on program activities.

    The organization meets this standard.

  2. Fund Raising Expenses

    Fund Raising Expense Ratio: Standard 9

    Description
    Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

    The organization meets this standard.

  3. Accumulating Funds

    Ending Net Assets: Standard 10

    Description
    Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

    The organization meets this standard.

  4. Audit Report

    Financial Statements: Standard 11

    Description
    Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

    The organization meets this standard.

  5. Detailed Expense Breakdown

    Detailed Functional Breakdown of Expenses: Standard 12

    Description
    Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

    The organization meets this standard.

  6. Accurate Expense Reporting

    Accuracy of Expenses in Financial Statements: Standard 13

    Description
    Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

    The BBB is unable to verify if this organization meets this standard.

  7. Budget Plan

    Budget: Standard 14

    Description
    Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

    PSI does not meet this Standard because, when the organization provided 2016 budget information, it indicated that the budget:

    • Included total projected program service expenses, however, did not break these expenses down by major program category including HIV/family planning, malaria, and other services (child survival, malaria, and maternal health).

Fund Raising & Info

  1. Truthful Materials

    Misleading Appeals: Standard 15

    Description
    Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

    The BBB is unable to verify if this organization meets this standard.

  2. Annual Report

    Annual Report: Standard 16

    Description
    Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

    PSI does not meet this Standard because the organization's 2014 annual report did not include:

    • A roster of the board of directors.
    • Total income.
    • Total expenses for each program in the same categories that appear in the organization’s financial statements including HIV/family planning, malaria, and other services (child survival, malaria, and maternal health).
    • Total end of year net assets.

  3. Website Disclosures

    Web Site Disclosures: Standard 17

    Description
    Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

    PSI does not meet this Standard because the organization's website, www.psi.org, does not include all of the recommended information for those charity websites that solicit for donations. Specifically, it does not include:

    • Electronic access to the organization’s 2014 IRS Form 990.

  4. Donor Privacy

    Privacy for Written Appeals & Internet Privacy: Standard 18

    Description
    Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

    The organization meets this standard.

  5. Cause Marketing Disclosures

    Cause Related Marketing: Standard 19

    Description
    Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

    The organization meets this standard.

  6. Complaints

    Complaints: Standard 20

    Description
    Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.

    The organization meets this standard.

Conclusion

Population Services International does not meet the following 6 Standards for Charity Accountability:

Standard 1 - Oversight of Operations and Staff
Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

PSI does not meet this Standard because its board of directors does not:

  • Have a voting member of the board who is assigned the responsibility of serving as the treasurer. In general, the board’s treasurer helps provide independent oversight of the organization’s finances.

Standard 6 - Board Policy on Effectiveness
Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

PSI does not meet this Standard because:

  • The board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.

Standard 7 - Board Approval of Written Report on Effectiveness
Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

PSI does not meet this Standard because:

  • It has never completed an effectiveness assessment.

Standard 14 - Budget
Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

PSI does not meet this Standard because, when the organization provided 2016 budget information, it indicated that the budget:

  • Included total projected program service expenses, however, did not break these expenses down by major program category including HIV/family planning, malaria, and other services (child survival, malaria, and maternal health).

Standard 16 - Annual Report
Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

PSI does not meet this Standard because the organization's 2014 annual report did not include:

  • A roster of the board of directors.
  • Total income.
  • Total expenses for each program in the same categories that appear in the organization’s financial statements including HIV/family planning, malaria, and other services (child survival, malaria, and maternal health).
  • Total end of year net assets.

Standard 17 - Web Site Disclosures
Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

PSI does not meet this Standard because the organization's website, www.psi.org, does not include all of the recommended information for those charity websites that solicit for donations. Specifically, it does not include:

  • Electronic access to the organization’s 2014 IRS Form 990.

In addition, the BBB Wise Giving Alliance requested but did not receive complete information on the organization’s finances and solicitation materials and is unable to verify the organization's compliance with the following 2 Standards for Charity Accountability: 13 and 15.

Population Services International meets the remaining 12 Standards for Charity Accountability.

Purpose

  • Year, State Incorporated: 1971, North Carolina

  • Affiliates

    l'Agence pour le Développement du Marketing Social- Senegal
    Greenstar- Pakistan
    Population Services Kenya
    Population Services Khmer
    S.C. Social Marketing Solutions- Romania
    Social Marketing Company- Bangladesh
    Society for Family Health Nigeria

  • Stated Purpose

    "to make it easier for people in the developing world to lead healthier lives and plan the families they desire by marketing affordable products and services."

Programs

PSI is dedicated to improving the health of people in the developing world by focusing on serious challenges like a lack of family planning, HIV and AIDS, barriers to maternal health, and threats to children under five, including malaria, diarrhea, pneumonia and malnutrition. The organization works in partnership with local governments, ministries of health and local organizations to create health solutions that are sustainable within the countries it operates. In 2015, PSI reports that they saved the lives of 15,445 mothers, prevented 5,646,997 unintended pregnancies, stopped 254,792 new HIV infections, and avoided 273,740 deaths due to diseases like malaria, diarrhea and pneumonia that most threaten young children.

For the year ended December 31, 2014, PSI's program expenses were:

Malaria 193,076,913
HIV/family planning 295,592,915
Other services (child survival, malaria, and maternal health) 99,670,033
Total Program Expenses: $588,339,861

Governance & Staff

  • Chief Executive

    Karl Hofmann, Chief Executive Officer and President

  • Compensation*

    $461,188

  • Chair of the Board

    J. Brian Atwood

  • Chair's Profession / Business Affiliation

    Former Professor and Chair of Global Policy Studies, Humphrey School of Public Affairs, University of Minnesota

  • Board Size

    15

  • Paid Staff Size

    8500

*2014 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.

Fund Raising

Method(s) Used:

Special events, print advertisements, grant proposals, and Internet appeals.

Fund raising costs were less than 1% of related contributions. (Related contributions, which totaled $635,930,641, are donations received as a result of fund raising activities.)

Tax Status

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial

The following information is based on PSI's audited financial statements - consolidated - for the year ended December 31, 2014.

Source of Funds
U.S. government 232,675,904
Non-U.S. governments 169,447,106
International organizations 137,674,821
Foundations and corporations 67,862,692
Other 26,083,689
Contributions 2,186,429
Investment return 1,849,963
Net rental gain 729,093
Foreign currency transaction loss -66,640
Total Income $638,443,057
  • Programs: 94%
  • Fundraising: Less than 1%
  • Administrative: 6%
Total Income $638,443,057
Program expenses 588,339,861
Fundraising expenses $2,885,587
Administrative expenses $40,004,544
Other expenses $0
Total expenses: $631,229,992
Income in Excess of Expenses 7,213,065
Beginning Net Assets 60,497,607
Other Changes In Net Assets -4,565,470
Ending Net Assets 63,145,202
Total Liabilities 367,001,019
Total Assets 430,146,221

Note: According to the organization's audited financial statements for the year ended December 31, 2014, PSI received in-kind contributions totaling $79,453,839 in the form of donated commodities, equipment, and services. Note 2: In the above financial section, 'other changes in net assets' refers to foreign currency translation.

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This report is not to be used for fund raising or promotional purposes.