Is The Fairholme Foundation Legit? —…

Red Flags

Consistent and significant deficits (expenses far exceeding revenue) in recent years, e.g., 2022 expenses of $12.7M vs. revenue of $1.2M.
Negative revenue reported in 2020 ($-1,180,605), indicating substantial losses.
Declining asset base from $382.5M in 2015 to $244.3M currently, raising questions about long-term financial stability.
High expense-to-revenue ratio in multiple periods, suggesting reliance on asset drawdowns or significant investment losses.

Spending Breakdown

How The Fairholme Foundation allocates its funds across programs, administration, and fundraising.

90%

Program Spending

Healthy — majority goes to mission

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 The Fairholme Foundation

Is The Fairholme Foundation a legitimate charity?

Based on AI analysis of IRS 990 filings, The Fairholme Foundation (EIN: 10718240) appears trustworthy. Mission Score: 70/100. 4 red flags identified, 3 strengths noted.

Is The Fairholme Foundation a good charity to donate to?

The Fairholme Foundation has a Mission Score of 70/100. Revenue: $1.9M. Assets: $244.3M. Review the full transparency report for detailed spending breakdown and executive compensation analysis.

What is the EIN for The Fairholme Foundation?

The Employer Identification Number (EIN) for The Fairholme Foundation is 10718240. 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 The Fairholme Foundation spend its money?

The Fairholme Foundation allocates 90% to programs, 5% to administration, and 5% to fundraising. Healthy nonprofits typically spend 75%+ on programs.

How can I verify The Fairholme Foundation's tax-exempt status?

You can verify The Fairholme Foundation's tax-exempt status using EIN 10718240 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

The Fairholme Foundation exhibits a complex financial profile, primarily functioning as a grant-making private foundation given its NTEE code T21 (Private Grantmaking Foundations) and substantial assets. Over the past few years, the organization has consistently reported zero officer compensation, which is a positive indicator of efficient governance and resource allocation towards its mission. However, the foundation has shown significant fluctuations in revenue and expenses. For instance, in 2022, expenses were $12,745,925 against revenue of $1,279,606, indicating substantial grantmaking or investment losses. This trend of expenses significantly exceeding revenue is also evident in 2021 ($7,305,591 expenses vs. $285,369 revenue) and 2019 ($14,050,063 expenses vs. $2,182,584 revenue). 

The foundation's assets have seen a decline from a high of $382,553,098 in 2015 to $244,340,479 currently, which warrants further investigation into its investment strategies and grantmaking impact. While the lack of officer compensation suggests good internal financial practices, the consistent and large deficits (expenses exceeding revenue) in recent years, particularly the negative revenue reported in 2020 ($-1,180,605), raise questions about the sustainability of its operational model or the nature of its revenue streams, which may include investment gains/losses. The organization's transparency is generally good through its 990 filings, but the financial trends suggest a need for deeper analysis into its investment performance and grant distribution strategy.

Is The Fairholme Foundation Legit?

Verdict: The Fairholme Foundation appears trustworthy