DonorsChoose.org (DC) is an online platform that connects public school teachers to donors to fund classroom projects. Since 2000, DC has raised $90 million for over 220,000 projects benefiting 5 million students. Donors fund materials that DC purchases and delivers. DC provides detailed impact statistics and financials are transparent, though processing expenses are considered program costs. DC has grown significantly through successful partnerships and campaigns. While self-sufficient, continued optional donations help cover operating costs as DC works to improve efficiencies and scale its model to more communities.

1. NONPROFIT INVESTOR
INDEPENDENT RESEARCH FOR PHILANTHROPY
DonorsChoose.org SUMMARY
Created in 2000 by Charles Best, a former public high school teacher in the
Nonprofit Investor Rating: Bronx, DonorsChoose.org (“DC”) is an online funding website that connects
U.S. public school teachers to donors that wish to support their specific
BUY classroom project or supply needs. Once a project reaches its fundraising
goal, DC purchases the materials and delivers them to the school.
Mission Statement
STRENGTHS
Donors Choose engages the public in public
schools by giving people a simple, accountable Integrity ensured via e-procurement system. When a project becomes fully
and personal way to address educational funded, instead of sending the school funds, materials are bought through
inequity. It envisions a nation where children DC’s e-procurement system (“eSchoolMall”), ensuring accountability.
in every community has the tools and
experiences needed for an excellent Successfully creating public awareness. DC has established partnerships
education. with well-known companies, charitable foundations, and public figures such
as Bing, Crate & Barrel, Bill & Melinda Gates Foundation, and Oprah. These
Financial Overview partnerships, as well as DC gift cards, corporate matching, facebook “Likes”
$ in MM, Fiscal Year Ended December 31, campaigns have improved public awareness of DC and its mission.
Improving efficiencies. Previously, much of the procurement process was
2008 2009 2010
handled manually; DC continues to work on automating and improving
Revenue and Support $18.6 $17.3 $24.5
Operating Expenses $15.6 $17.0 $24.5
internal processes. Classroom processing expenses have declined from 17%
to 12% as a percent of total classroom project expenses from 2008 to 2010.
% of Total:
CAUTIONS
Program Expenses 59% 63% 73%
G&A 37% 32% 24% Not self-sufficient (yet). In addition to classroom project contributions,
Fundraising 5% 5% 3% donors are asked to include an additional (optional) contribution towards
DC operating expenses. These contributions have improved yearly, but the
% Self Sustaining 22% 38% 56% remaining shortfall is still being covered by expansion funds raised during
2007 and 2008 through a small group of donors and the Board of Directors.
Information sharing could be broadened. While DC’s website provides a
Contact Details detailed statistics of dollars raised, number of students helped, and its
DonorsChoose.org impact across subject, grade, and resource, beyond this, there are no
213 West 35th Street, 2nd Floor East studies showing how such information has been shared with other
New York, NY 10001 organizations or influenced policy to improve educational resources.
http://www.donorschoose.org RECOMMENDATION: BUY
EIN: 13-4129457 Through many successful publicity campaigns, DonorsChoose.org has
gained popularity. As a result, contributions to DC have increased
Analyst dramatically in the past few years, helping more classrooms in need. As
Emily Wang scalability is reached, there has been evidence of improved processing
efficiencies and reduction in costs. In addition to contributing to the
Publication Date classroom projects themselves, we would recommend donors to make the
October 12, 2011 optional contribution of 12-19% to support DC’s operating expenses.
Nonprofit Investor.org

2. OVERVIEW OF DONORS CHOOSE
Created in 2000 by Charles Best, a former public high school teacher in the Bronx, DonorsChoose.org (“DC”) is an online funding
website that connects U.S. public school teachers to individual or corporate donors that wish to support their specific classroom
project or supply needs. Once a project reaches its fundraising goal, DC purchases the materials and delivers them to the school.
The average public school teacher spends $500 annually in out-of-pocket expenses to acquire basic classroom materials. Since
inception, DC has raised $90 million, supporting close to 220,000 projects, and helping over 5.0 million students. Roughly 50% of
resources provided are books and technology, 38% towards classroom supplies, and 10% to other resources.
FINANCIAL OVERVIEW
Revenue Recognition. Contributions for classroom projects include project materials, donor thank you package and delivery costs,
and third party credit card fees. Contributions for operating expenses is a suggest optional contribution that helps pay for operating
expenses such as classroom project processing, project advocacy expenses, general and administrative expenses, and fundraising
expenses.
Expenses. DC defines program services expenses as classroom project expenses, class project processing expenses, and project
advocacy expenses. This definition seems too broad, as processing expenses and advocacy expenses should be considered operating
expenses, as the expenses are not directly beneficial to the project itself, but rather are integral parts of operating the non-profit.
Taking all this into account, program expenses comprise only 73% - instead of 94% - of total 2010 expenses.
Previously, much of the procurement process was handled manually; DC continues to work on – and has publicly admitted efforts
toward –automating and improving internal processes and further reducing costs. Classroom processing expenses have declined
from 17% to 12% as a percent of total classroom project expenses from 2008 to 2010. Furthermore, as a result of widespread
popularity of partnership campaigns, advocacy costs have declined yearly since 2008, both as a percent of total expenses and
absolute dollar.
2010 2009 2008
Re venue
Contributi ons for cl a ss room projects $ 17,776,627 $ 13,274,332 $ 8,557,127
Contributi ons for opera ting expens es 3,708,410 2,360,924 1,439,517
Contributi ons for progra m s ervi ces a nd supporti ng s ervi ces 2,418,473 1,043,793 2,651,540
Contributi ons for expa ns i on - - 5,800,000
Provi si on for uncol l ecti bl e uncondi ti ona l promi s es to gi ve (500,000)
Dona ted s ervi ces , fa ci li ti es a nd equi pme nt 524,388 353,623 262,842
Interes t income 89,819 262,355 351,263
Net a s se ts rel ea s ed from res tri cti ons - - -
Total Revenue 24,517,717 17,295,027 18,562,289
Expenses
Cl a ss room projects 17,899,879 10,739,446 9,145,333
Opera ting expens es
Cl a s s room project process i ng 2,131,357 1,792,598 1,586,334
Cl a s s room projects a dvoca cy 2,960,326 2,980,298 3,166,531
Gene ra l & Admi ni s tra ti ve 817,831 697,733 963,516
Fundra is i ng 666,332 774,839 712,923
Opera ti ng expe nses , subtota l 6,575,846 6,245,468 6,429,304
Total Expenses 24,475,725 16,984,914 15,574,637
Cha nge in As sets 41,992 310,113 2,987,652
Progra m Expenses a s % of Tota l Expens es 73% 63% 59%
Opera ti ng Expens es a s % of Tota l Expe nse s 24% 32% 37%
Fundra i s i ng Expens es a s % of Tota l Expe nses 3% 5% 5%
Sel f Sus ta i ni ng* (2,867,436) (3,884,544) (4,989,787)
% Sel f-Susta i ni ng 56% 38% 22%
*Cont ributions for operating expenses less operat ing expenses. Operating expenses are def ined as tot al expenses plus capital expneditures, less classroom project
expense, donated services included in expenses and depreciat ion
DonorsChoose.org | Nonprofit Investor Research 2

3. RESULTS AND TRANSPARENCY
Donors Choose provides the required financial information from 2008 to 2010 in its financial statements and Form 990s.
DC’s website provides a detailed overview of dollars raised, number of students helped, and its impact across subject, grade, and
resource. These statistics are updated on a daily basis.
GROWTH
The multi-user funding model where donors can choose by state, subject, grade level, resource the project that most appeals to
them can be replicated to other community and social agendas such as police officers, medical needs, etc. While DC has had several
project requests for such agendas, the organization plans to further strengthen its model specifically in the United States, in public
schools, on low-income communities, prior to expanding its model to efforts.
NPI RECOMMENDATION VS. CHARITY NAVIGATOR
DC is positively reviewed by Charity Navigator, receiving four-stars (out of four-stars), reflecting high accountability and transparency
scores, as well as strong financial scores. The primary difference in NPI’s analysis and Charity Navigator’s analysis is in reference to
program expenses. Charity Navigator takes DC’s definition of program expenses at face value versus NPI analysis which separates
processing and advocacy expenses from the definition. Charity Navigator calculates program expenses, as a percent total expenses,
at 95% versus NPI at 73%.
DISCLOSURES
Emily does not have any affiliation with DC and has made one donation to DC prior to the writing of this report.
DonorsChoose.org | Nonprofit Investor Research 3