EDITOR’S NOTE: We have updated this article with a statement from Arizona Christian School Tuition Organization, who explained there was a mistake on their Form 990 regarding its fundraising numbers. The ministry is working to get the tax forms corrected. You can read the full statement below.
Arizona Christian School Tuition Organization’s (ACSTO) most recent financial information has impacted its ratings in the MinistryWatch database. Based on its Form 990 covering fiscal year 2024, its financial efficiency rating dropped from 5 stars to 1 star.
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ACSTO “exists to give Arizona students the opportunity to attend a Christian School.” Providing scholarships through the Private School Tax Credit Program, ACSTO aims to “see a future when no Arizona family will say, ‘We wish we could put our children in a Christian School, but we just can’t afford it.’”
Since 1998, ACSTO has worked to “operate on biblical principles, exercise transparency, and go to great lengths to protect a parent‘s right to choose the best educational option for their student.”
ACSTO was the first school tuition organization (STO) in the U.S. Transforming “dollar-for-dollar tax credit donations made by Arizona taxpayers into valuable tuition scholarships,” ACSTO partners with over 130 Christian schools in the state to provide affordable education to Arizona students.
Its Form 990 for fiscal year 2023 earned ACSTO a 5-star rating in the MinistryWatch database, indicating that it was among the top 20% for financial efficiency compared with its peers in the K-12 Schools/Academies sector.
But a number of changes from fiscal year 2024 prompted its rating to plummet to 1 star, due mostly to an analysis of its fund acquisition and resource allocation. The drop in financial efficiency also decreased its Donor Confidence Score by 20 points.
In 2024, its fundraising expense ratio (total fundraising costs compared with donor contributions) was 31%, a huge increase compared with years prior where its fundraising expense ratio ranged from 2% to 3%. The sector median is 2%.
Also, its program expense ratio, which calculates the percentage of its total expenses used toward its core mission, was 65%. Looking back at 2019-2023, that number was consistently in the 90s. The sector media is 84%.
ACSTO’s cash assets also grew, from $14,756,613 in 2019 to $34,910,727 in 2024, a nearly 136% increase in five years.
ACSTO earns a D Transparency Grade because it is not a member of the ECFA, and it does not post audited financials on its website. Without membership in the ECFA, ACSTO is not required to make audited financial statements public. ACSTO posts links to a recent Form 990, and says it files a signed copy of audited financials with the Arizona Department of Revenue.
Its Donor Confidence Score is now a 54 out of 100—an “Exercise Caution” designation.
After publication, ACSTO provided us with the following statement:
Our long-time CPA did retire, which led us to hiring a new CPA for FY 23/24. We did not make any significant changes in our fundraising efforts in FY 2023 compared to previous years, Unfortunately, we did not notice on our 2023 990s, that our CPA added $11+ million miscellaneous spending into the fundraising column. This is not accurate and we are in the process of amending our taxes, which we plan to have completed by May 15th.
ACSTO can assure you, there is absolutely no way we could have spent an additional $11+ million on fundraising. Per state law, we are allowed to keep 10% of each contribution for administrative/operating expenses (which would include fundraising). We strive to operate on an 8% budget so we can get as much back to students in scholarships. Every year we have an audit and file a report with the Arizona Department of Revenue, which does indicate that we are awarding at minimum 90% of all our contributions in scholarships.
MinistryWatch Donor Confidence Score: 54 (out of a possible 100) “Exercise Caution”
MinistryWatch Financial Efficiency Rating: 1 Star (out of a possible 5 Stars)
MinistryWatch Transparency Grade: D
ECFA Member? No
Revenue in Most Recent Year Available: $45,393,310
Five-Year Revenue Trend: Increasing (by about 90%)
Percent of Revenue Spent on Fundraising: 31%
Percent of Revenue Peer Group Spends on Fundraising: 2%
CEO/President: Steve Yarbrough
President’s Salary and Other Compensation: $125,310
A complete MinistryWatch profile for Arizona Christian School Tuition Organization can be found here.
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