Refraction Inc

Nonprofit profile at a glance

EIN
831426812
IRS 990 coverage
2019–2024
Forms available
Form 990 2024, Form 990-N 2018
Location
McLean, VA, USA
Phone
7037127565
Rating
75
Verdict
SUPPORTED
Rating confidence
Moderate
Sector
Economic Development

Official website

Reported finances

Revenue
$646,643
Expenses
$670,926
Assets
$1,035,622
Liabilities
$262,814

Source: IRS Form 990. Selected filing: tax year 2024. Amounts in USD.

Leadership & pay

4 people listed

Executive titles in this filing

  • Rachael Stott (President & CEO)

Highest reported compensation

  • Rachael Stott (President & CEO): $131,235 total reported compensation
  • Esther Lee (Treasurer): $52,241 total reported compensation

Source: IRS Form 990. Selected filing: tax year 2024. Names and roles reflect this filing, not necessarily current officeholders.

Overview

Mission

Refraction is a nonprofit innovation hub, whose mission is to provide mentoring, programs, and workspace to startups and high-growth companies to help them grow and create jobs in the greater Washington, DC region.

What it reported doing in 2024

Provided mentoring, programs, and workspace to startups and high-growth companies to help them grow and create jobs in the greater Washington, DC region

Operating model

Revenue model
Earned-program. 95% of the money available for current operations came from fees and other program revenue.
Distribution model
Direct operator. The filing allocates 100% 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.

The verdict

SUPPORTED - A large share of available resources goes toward mission work and the filed numbers largely add up. Fundraising costs are high for each dollar raised and some filing-based governance responses are negative or unanswered.

Rating breakdown

  • Financial Efficiency: 77
  • Transparency & Controls: 90
  • Accountability: 62
  • Sustainability: 33
  • Growth: 60

Detailed rating inputs

Financial Efficiency

  • Mission deployment rate: 86.1%; rating input score 86
  • Program expense ratio: 86.2%; rating input score 86
  • Fundraising efficiency: $1.07 raised per $1 spent on fundraising; rating input score 3; 3rd percentile among comparable filings

Transparency & Controls

  • Consistency checks: 100%; rating input score 100; 63rd percentile among comparable filings
  • Pay-setting controls: Limited
  • Foreign activity oversight: Limited
  • Grant itemization coverage: Limited
  • Major donor itemization: Limited
  • Related-party transparency: Limited

Accountability

  • Independent voting board: 75%; rating input score 75; 16th percentile among comparable filings
  • Governance controls: 4 of 9 controls in place; rating input score 44
    • Conflict-of-interest policy: Pass
    • Whistleblower policy: Fail
    • Document-retention policy: Fail
    • CEO compensation review process: Pass
    • Other executive compensation review process: Fail
    • Form 990 shared with the board: Pass
    • Board meeting minutes documented: Pass
    • Audit committee oversight: Missing
    • Independent financial-statement audit: Fail

Sustainability

  • Operating margin: -3.8%; rating input score 26; 26th percentile among comparable filings
  • Total-asset coverage ratio: 1.54; rating input score 57; 57th percentile among comparable filings
  • Liabilities to assets ratio: 0.25; rating input score 27; 27th percentile among comparable filings
  • Officer compensation ratio: 27.3%; rating input score 8; 8th percentile among comparable filings

Growth

  • Program expense growth: 3.1% per year; rating input score 100; 32nd percentile among comparable filings
  • Revenue growth: -4.7% per year; rating input score 0; 5th percentile among comparable filings
  • Asset growth: 11.2% per year; rating input score 100; 62nd percentile among comparable filings

Details

  • Where the money goes: 86.1% of revenue deployed · 86.2% of spending went to programs
  • Governance: 3 of 4 board members independent · 4 of 9 filing controls reported
  • Programs: 1 filed program accomplishment · $579K in reported program spending
  • Leadership: top reported pay $131K · 4 people listed
  • Consistency: 26 of 26 current checks pass
  • Schedules: 3 filed schedules
  • Filing history: 5 filing years from 2019 to 2024
  • Contacts: How to reach this organization
  • Money network: 2 filed money-flow records
  • 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.

  • High — Financial Efficiency: Fundraising efficiency scored 3/100.
  • Moderate — Accountability: Governance controls: 4 of 8 not reported.
  • High — Growth: Revenue growth scored 0/100.
  • High — Sustainability: Operating margin scored 26/100.
  • Review — Sustainability: Total-asset coverage ratio scored 57/100.
  • High — Sustainability: Officer compensation ratio scored 8/100.
  • High — Sustainability: Liabilities to assets ratio scored 27/100.