Is Arete Preparatory Academy Legit?

Quick charity verification for Arete Preparatory Academy (EIN: 205332933)

Verdict: Arete Preparatory Academy appears trustworthy

85/100Mission Score

$6.8MRevenue

$10.3MAssets

2Red Flags

4Strengths

Red Flags

Dramatic increase in liabilities in 202306 without clear explanation in summary data
Consistent 0% officer compensation for an organization of this size, which is atypical and may obscure actual executive remuneration.

Strengths

Consistent revenue growth over the past decade, from $3.55M in 201406 to $6.77M in 202306.
Maintains an operating surplus in most periods, indicating sound financial management.
Significant asset growth to over $10 million in 202306, suggesting substantial investment in its mission.
No reported officer compensation, indicating a potential commitment to minimizing administrative overhead.

Spending Breakdown

How Arete Preparatory Academy allocates its funds across programs, administration, and fundraising.

85%

Program Spending

Healthy — majority goes to mission

10%

Admin Costs

Reasonable — admin costs in check

Fundraising

Within typical range

How to read this: Well-run charities typically spend 75% or more on programs, keep admin under 25%, and fundraising under 15%. A high program ratio means more of every dollar goes directly to the mission.

How to Interpret This Report

What Red Flags Mean

Red flags are potential warning signs identified by AI analysis of IRS 990 filings. They may indicate issues like declining revenue, high executive pay relative to program spending, lack of transparency, or governance concerns. A single red flag does not necessarily mean an organization is untrustworthy, but multiple flags warrant further investigation before donating.

What Mission Score Measures

The Mission Score (0-100) evaluates how effectively a nonprofit fulfills its stated purpose. It combines multiple factors: program spending efficiency (how much goes to programs vs. overhead), financial health and sustainability, governance quality, transparency in reporting, and consistency of operations over time. A score of 70+ indicates strong alignment with the organization’s mission.

Using This Data for Donation Decisions

Use this report as one input in your decision. Look at the overall Mission Score for a quick assessment, review red flags and strengths for specific concerns, check the spending breakdown to see where money goes, and compare executive compensation to the organization’s size. Consider viewing the full transparency report for deeper analysis, and always verify tax-exempt status with the IRS before making large donations.

Frequently Asked Questions about Arete Preparatory Academy

Is Arete Preparatory Academy a legitimate charity?

Based on AI analysis of IRS 990 filings, Arete Preparatory Academy (EIN: 205332933) appears trustworthy. Mission Score: 85/100. 2 red flags identified, 4 strengths noted.

Is Arete Preparatory Academy a good charity to donate to?

Arete Preparatory Academy has a Mission Score of 85/100. Revenue: $6.8M. Assets: $10.3M. Review the full transparency report for detailed spending breakdown and executive compensation analysis.

What is the EIN for Arete Preparatory Academy?

The Employer Identification Number (EIN) for Arete Preparatory Academy is 205332933. This is the unique tax ID assigned by the IRS.

What is a Mission Score?

The Mission Score is a 0-100 rating that measures how effectively a nonprofit fulfills its stated mission. It factors in program spending efficiency, financial transparency, governance practices, and outcome reporting. Scores above 70 indicate strong mission alignment, 40-69 suggest mixed performance, and below 40 signals potential concerns.

How does Arete Preparatory Academy spend its money?

Arete Preparatory Academy allocates 85% to programs, 10% to administration, and 5% to fundraising. Healthy nonprofits typically spend 75%+ on programs.

How can I verify Arete Preparatory Academy's tax-exempt status?

You can verify Arete Preparatory Academy's tax-exempt status using EIN 205332933 on the IRS Tax Exempt Organization Search (TEOS) at apps.irs.gov/app/eos. You can also request copies of their Form 990 directly from the organization, as they are required by law to provide them upon request.

AI Transparency Report

Arete Preparatory Academy demonstrates consistent financial growth and appears to be in a stable financial position. In the latest filing period (202306), the organization reported revenue of $6,772,885 against expenses of $6,491,735, resulting in a surplus. A significant increase in assets from $1,776,122 in 202206 to $10,317,735 in 202306, alongside a corresponding rise in liabilities to $8,534,669, suggests a major capital investment or expansion, likely related to facilities given its NTEE code for elementary/secondary education. This substantial asset growth warrants further investigation to understand its nature and long-term implications.

The organization consistently operates with a modest surplus, indicating sound financial management and an ability to cover its operational costs. The reported 0% officer compensation across all available filings is a notable positive for transparency and efficiency, suggesting that leadership is either unpaid or compensated through other means not categorized as officer compensation on the 990, which is unusual for an organization of this size. The consistent growth in revenue over the past decade, from $3,550,429 in 201406 to $6,772,885 in 202306, reflects a growing and sustainable operation.

While the 990 data indicates strong financial health and growth, the dramatic increase in liabilities in the latest period, coupled with the 0% officer compensation, are areas that would benefit from more detailed disclosure to fully assess the organization's financial strategy and potential long-term debt obligations. Overall, the academy appears to be a well-managed entity focused on its educational mission, with a strong track record of revenue growth and efficient spending.

View Full Transparency Report →

Disclaimer

AI-generated analysis based on IRS public records. Not financial or legal advice. Verify information directly with the organization.