Minecraft
Preparation
Lesson Narrative
Students evaluate the financial efficiency of non-profit organizations by analyzing overhead ratios, 501(c)(3) mechanics, Form 990 data, and utilizing charity watchdog organizations.
Learning Goals
• Evaluate the efficiency of a non-profit using overhead ratios.
• Analyze public Form 990 tax documents.
• Utilize watchdog organizations to vet global aid groups.
Student Facing Learning Goals
Let's learn how to investigate charities so we know our money is actually helping people, not just paying the CEO.
Student Facing Learning Targets
• I can calculate a charity's overhead ratio.
• I can explain the purpose of a 501(c)(3).
• I know how to look up a charity on a watchdog website.
Required Academic Standards
National Jump$tart Standards:
• Financial Responsibility and Decision Making (Standard 1): Take responsibility for personal financial decisions.
Glossary Entries
501(c)(3): A specific tax category for non-profit organizations that exempts them from federal income tax.
Overhead Ratio: The percentage of a charity's expenses that go toward administrative costs and fundraising rather than the actual program.
Form 990: A public tax document that non-profits must file with the IRS detailing their revenues, expenses, and executive salaries.
Watchdog Organization: Independent groups (like Charity Navigator) that evaluate and rate the efficiency of non-profits.
Lesson
Warm Up
7.2.1: The CEO Salary
Launch: Have students stand in randomized groups of 3 at vertical whiteboards. Present the prompt verbally. Give them 4 minutes.
Synthesis: Select two groups to share. Establish the baseline: Non-profits are massive corporations. They have to pay competitive salaries to get competent leaders, but excessive administrative costs mean less money for the actual cause.
Student Facing Task
You donate $100 to a charity that provides clean water. Later, you find out the CEO of the charity makes an $800,000 salary.
1. Is it legal for a "non-profit" to pay its employees a salary?
2. Does the CEO's salary change how you feel about your $100 donation? Why?
Activity 1
7.2.2: Overhead Math
Launch: Keep students at whiteboards. Project the charity expense breakdown. Give groups 8 minutes to run the calculations.
Synthesis: Have the class observe the boards. (Teacher Key: Divide Program Expenses by Total Expenses to find the Program Ratio. The higher the program ratio, the more efficient the charity).
Student Facing Task
Charity A raises $1,000,000. They spend $800,000 on medical supplies and $200,000 on office rent and advertising.
Charity B raises $1,000,000. They spend $400,000 on medical supplies and $600,000 on salaries and advertising.
1. Calculate the "Overhead Ratio" (Admin / Total) for both charities.
2. If you give $10 to Charity B, exactly how much of your money actually buys medical supplies?
Activity 2
7.2.3: The Form 990 Investigation
Launch: Project an actual excerpt from a Form 990. Give groups 8 minutes to extract the data.
Synthesis: Facilitate a class debate. (Key: Transparency is required by law. If a charity obscures its 990 or is flagged by a watchdog organization, do not give them money).
Student Facing Task
The IRS requires every 501(c)(3) to publicly post a "Form 990" so anyone can see exactly how they spend their money.
1. Why does the U.S. government force charities to make their financial documents public?
2. If a charity refuses to share its Form 990 with a charity watchdog organization, what should you assume about its overhead ratio?
Lesson Synthesis
Narrative: Bring the class back to their seats. Review the learning targets. Summarize: "Trust, but verify. Emotional marketing is powerful, but you must look past the commercials. Use Form 990s and watchdog groups to ensure your hard-earned money has maximum impact."
Cool Down
7.2.4: The Watchdog Defense
Narrative: This exit ticket serves as a formative assessment on charity vetting. Teacher Rubric: A successful response must articulate that overhead ratios prove mathematical efficiency, ensuring the majority of the donation funds the actual mission rather than administrative bloat.
Student Facing Task
When evaluating two charities that fight the same disease, mathematically why should you always check their overhead ratios on a watchdog organization's website before donating?