Literacy Action Inc

Nonprofit profile at a glance

EIN
581053728
IRS 990 coverage
2009–2023
Forms available
Form 990 2023
Location
Duluth, GA, USA
Rating
75
Verdict
SUPPORTED
Rating confidence
Moderate
Sector
Remedial Reading, Reading Encouragement

Official website

Reported finances

Revenue
$187,479
Expenses
$1,219,644
Assets
$0
Liabilities
$0

Source: IRS Form 990. Selected filing: tax year 2023. Amounts in USD.

Leadership & pay

22 people listed

Executive titles in this filing

  • SARA TOTONCHI (INTERIM EXECUTIVE DIRECTOR)

Highest reported compensation

  • SARA TOTONCHI (INTERIM EXECUTIVE DIRECTOR): $26,000 total reported compensation

Source: IRS Form 990. Selected filing: tax year 2023. Names and roles reflect this filing, not necessarily current officeholders.

Overview

Mission

To build better futures by empowering individuals with literacy, life and work skills and our vision is to break the intergenerational cycle of low literacy and poverty.

What it reported doing in 2023

Literacy action was the oldest and largest adult basic education nonprofit in the southeast, with classes offered at its main campus in downtown atlanta as well as at several community-based locations throughout the metro area. Literacy action provided tuition-free and stigma-free classes in adult basic education, which included reading and language arts, writing, mathematics, hse preparation, family literacy, digital literacy, english as a second language (esl), and workforce literacy. The organization ceased operations in 2023, with the final adult education classes ending july 21, 2023.

Operating model

Revenue model
Earned-program. 79% of the money available for current operations came from fees and other program revenue.
Distribution model
Hybrid. The nonprofit split its reported program spending across 58% for direct work, and 42% for grants.
  • Includes noncash contributions: Reported contributions include donated property or goods.

The verdict

SUPPORTED - A large share of available resources goes toward mission work and the filed numbers largely add up. A relatively small share of total spending goes to programs and fundraising costs are high for each dollar raised.

Rating breakdown

  • Financial Efficiency: 75
  • Transparency & Controls: 84
  • Accountability: 84
  • Sustainability: 5
  • Growth: 60

Detailed rating inputs

Financial Efficiency

  • Mission deployment rate: 100%; rating input score 100
  • Program expense ratio: 56.9%; rating input score 57
  • Fundraising efficiency: $0.36 raised per $1 spent on fundraising; rating input score 4; 4th percentile among comparable filings

Transparency & Controls

  • Consistency checks: 100%; rating input score 100; 63rd percentile among comparable filings
  • Pay-setting controls: 3 of 6 controls in place; rating input score 50
    • Compensation committee: Missing
    • Independent consultant: Missing
    • Other Form 990s reviewed: Missing
    • Written employment contract: Pass
    • Compensation survey or study: Pass
    • Board or committee approval: Pass
  • Foreign activity oversight: Limited
  • Grant itemization coverage: Limited
  • Major donor itemization: Yes; rating input score 100
  • Related-party transparency: Limited

Accountability

  • Independent voting board: 100%; rating input score 100; 63rd percentile among comparable filings
  • Governance controls: 5 of 8 controls in place; rating input score 62
    • Conflict-of-interest policy: Pass
    • Whistleblower policy: Pass
    • Document-retention policy: Pass
    • CEO compensation review process: Pass
    • Other executive compensation review process: NotApplicable
    • Form 990 shared with the board: Fail
    • Board meeting minutes documented: Pass
    • Audit committee oversight: Missing
    • Independent financial-statement audit: Fail

Sustainability

  • Operating margin: -550.5%; rating input score 0; 0th percentile among comparable filings
  • Total-asset coverage ratio: 0; rating input score 1; 1st percentile among comparable filings
  • Liabilities to assets ratio: Limited
  • Officer compensation ratio: 2.1%; rating input score 36; 36th percentile among comparable filings

Growth

  • Program expense growth: -3.4% per year; rating input score 0; 22nd percentile among comparable filings
  • Revenue growth: 1.5% per year; rating input score 100; 35th percentile among comparable filings
  • Asset growth: 4.6% per year; rating input score 100; 46th percentile among comparable filings

Details

  • Where the money goes: 100% of revenue deployed · 56.9% of spending went to programs
  • Governance: 21 of 21 board members independent · 5 of 8 filing controls reported
  • Programs: 1 filed program accomplishment · $694K in reported program spending
  • Leadership: top reported pay $26K · 22 people listed · 3 of 6 pay-setting controls reported
  • Consistency: 24 of 25 current checks pass · 1 finding to review
  • Schedules: 6 filed schedules · includes major donors and executive pay
  • Filing history: 14 filing years from 2009 to 2023
  • Contacts: How to reach this organization
  • Money network: 5 filed money-flow records
  • Related organizations: 4 filed related-organization links
  • 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.

  • Review — Financial Efficiency: Program expense ratio scored 57/100.
  • High — Financial Efficiency: Fundraising efficiency scored 4/100.
  • High — Sustainability: Operating margin scored 0/100.
  • Review — Accountability: Governance controls: 2 of 7 not reported.
  • High — Growth: Program expense growth scored 0/100.
  • High — Sustainability: Total-asset coverage ratio scored 1/100.
  • Moderate — Transparency & Controls: Schedule A contributions reconciliation did not reconcile in the filed values.
  • Moderate — Sustainability: Officer compensation ratio scored 36/100.