Hearts of Stone

Nonprofit profile at a glance

EIN
861029709
IRS 990 coverage
2013–2016
Forms available
Form 990 2016, Form 990-N 2012
Location
Phoenix, AZ, USA
Rating
49
Verdict
MIXED
Rating confidence
Moderate
Sector
Housing Development, Construction, Management

Official website

Reported finances

Revenue
$1,322,153
Expenses
$79,195
Assets
$1,116,504
Liabilities
$13,863

Source: IRS Form 990. Selected filing: tax year 2016. Amounts in USD.

Leadership & pay

1 person listed

Executive titles in this filing

  • STEVE SANCHEZ (PRESIDENT)

Highest reported compensation

  • STEVE SANCHEZ (PRESIDENT): $45,956 total reported compensation

Source: IRS Form 990. Selected filing: tax year 2016. Names and roles reflect this filing, not necessarily current officeholders.

Overview

Mission

To develop the enterpreneurialism in at-risk children and to transform the organizations that support them, by providing opportunities for children to gain experience with leadership and decision making.

What it reported doing in 2016

The organization focus is the receipt of donated structures for demolition and resale, the proceeds of which will be used for our exempt purposes. As of the end of the year we had not sold all of the components of the structures donated. However the cash received from sales during 2016 was used for a summer camp for approximately 52 underpriveledged children in costa rica, and funding for a local school for after school activities.

Operating model

Revenue model
Donor-supported. 100% of the money available for current operations came from contributions and gifts.
Distribution model
Direct operator. The filing allocates 85% of reported program-service expenses outside its grant, affiliate-payment, and member-benefit lines. This expense classification does not rule out separately announced grant awards.
  • Includes noncash contributions: Reported contributions include donated property or goods.

The verdict

MIXED - The filed numbers largely add up and revenue comfortably covers expenses. A relatively small share of available resources goes toward mission work and the filing reports few safeguards for money sent abroad.

Rating breakdown

  • Financial Efficiency: 28
  • Transparency & Controls: 65
  • Accountability: 50
  • Sustainability: 83
  • Growth: 80

Detailed rating inputs

Financial Efficiency

  • Mission deployment rate: 4.6%; rating input score 5
  • Program expense ratio: 76%; rating input score 76
  • Fundraising efficiency: Limited

Transparency & Controls

  • Consistency checks: 92.3%; rating input score 92; 12th percentile among comparable filings
  • Pay-setting controls: Limited
  • Foreign activity oversight: 0 of 8 controls in place; rating input score 0
    • Claims monitoring procedures: Fail
    • Requires narrative reports: Fail
    • Conducts field audits: Fail
    • May suspend future funding: Fail
    • Requires financial reports: Fail
    • Conducts site visits: Fail
    • Requires grant agreements: Fail
    • May require repayment: Fail
  • Grant itemization coverage: 50%; rating input score 50; 24th percentile among comparable filings
  • Major donor itemization: Yes; rating input score 100
  • Related-party transparency: Limited

Accountability

  • Independent voting board: 50%; rating input score 50; 9th percentile among comparable filings
  • Governance controls: 4 of 8 controls in place; rating input score 50
    • Conflict-of-interest policy: Pass
    • Whistleblower policy: Fail
    • Document-retention policy: Fail
    • CEO compensation review process: Pass
    • Other executive compensation review process: NotApplicable
    • Form 990 shared with the board: Pass
    • Board meeting minutes documented: Pass
    • Audit committee oversight: Missing
    • Independent financial-statement audit: Fail

Sustainability

  • Operating margin: 94%; rating input score 99; 99th percentile among comparable filings
  • Total-asset coverage ratio: 14.1; rating input score 94; 94th percentile among comparable filings
  • Liabilities to assets ratio: 0.01; rating input score 76; 76th percentile among comparable filings
  • Officer compensation ratio: 58%; rating input score 1; 1st percentile among comparable filings

Growth

  • Program expense growth: 48.5% per year; rating input score 100; 96th percentile among comparable filings
  • Revenue growth: 14.5% per year; rating input score 100; 81st percentile among comparable filings
  • Asset growth: -16.5% per year; rating input score 0; 5th percentile among comparable filings

Details

  • Where the money goes: 4.6% of revenue deployed · 76% of spending went to programs
  • Governance: 1 of 2 board members independent · 4 of 8 filing controls reported
  • Programs: 1 filed program accomplishment · $60K in reported program spending
  • Leadership: top reported pay $46K · 1 people listed
  • Consistency: 24 of 25 current checks pass · 1 finding to review
  • Schedules: 8 filed schedules · includes major donors and foreign activity
  • Filing history: 4 filing years from 2013 to 2016
  • Contacts: How to reach this organization
  • Money network: 3 filed money-flow records
  • Related organizations: 1 filed related-organization link
  • Grant readiness: Federal tax and exclusion status, award history, and grant-maker relationships.
  • People: Everyone the filings name, and which of them the filings identify by more than a name.

Key Signals

Signals prioritize questions for review. They are not findings of misconduct.

Grant-readiness screening is separate from the live rating, not a measure of program quality. Review the source records before making a grant decision.

  • High — Financial Efficiency: Mission deployment rate scored 5/100.
  • High — Transparency & Controls: Foreign activity oversight: 8 of 8 not reported.
  • Review — Accountability: Independent voting board scored 50/100.
  • Review — Accountability: Governance controls: 3 of 7 not reported.
  • Review — Transparency & Controls: Grant itemization coverage scored 50/100.
  • High — Growth: Asset growth scored 0/100.
  • High — Sustainability: Officer compensation ratio scored 1/100.
  • Moderate — Transparency & Controls: Schedule M noncash within contributions did not reconcile in the filed values.
  • High — Grant Readiness: Automatic revocation: this organization had its federal tax-exempt status automatically revoked.