Saturday, August 30, 2008

Boy Scout green sprouts outside Orange County

The group’s U.S. leaders take home more than the local chief’s six figure pay.

Written by: Teri Sforza, The Orange County Register
Corrected by: Alan, Unpaid Local Community Volunteer

Just when it seemed that Orange County’s Boy Scout executive was earning a pretty penny - $317,804 in total compensation for Les Baron - we see that his salary wilts in comparison with what the Big Cheeses at the Boy Scouts of America National Council in Texas earn.
  • FACT: Actual compensation NOT salary was: $260,608 and is the lowest among the other five (5) non-profit organizations of the same size within a twenty-five (25) mile radius of Santa Ana. (Source)
  • FACT: National Average Compensation is: $266,439 based on the size of the organization - which places Les Baron in line with competitive compensation (Source).
  • FACT: Compensation includes employer taxes, health insurance, and so forth.
  • FACT: Orange County Register includes even reimbursed expenses in their figure.
David J. Ross II, assistant chief scout executive; Kenneth L. Connelly, same title; Roy Williams, chief scout executive.
  • FACT: Yes, all three (3) were serving at the same time
  • FACT: Two (2) of them were in the process of retiring after a combined 80+ plus years of service.
  • FACT: They could of both left without training a replacement to carry on the Organization.
  • FACT: Mr. Williams actual “Management” salary was a mere $152K and LESS then even Les Baron.
Nonprofit watchdog Charity Navigator recently singled out the Boy Scouts National Council as having the nation’s highest-paid executive in the human services field. Which, of course, whetted The Watchdog’s appetite to exam the charity’s most recent tax returns.
  • FACT: Charity Navigator is NOT a Watchdog and is merely a Charity Evaluator.
  • FACT: It was not Charity Navigator that dug into the return it was Teri Sforza AND Tony Saavedra, OC Register.
  • FACT: OC Register NEVER sought the professional opinion of a non-profit CPA or other professional in their analysis.
More remarkable, perhaps, than a Scouting exec earning nearly $900,000 a year is the $648.6 million the Scouts have managed to accumulate in net assets. That includes $629 million invested in publicly traded securities.
  • FACT: These securities return $34.4M in dividends.
  • FACT: 32% of their support comes from these investments.
  • FACT: 1.8% of their revenue comes from public support.
  • FACT: ALL Public support was returned to local Communities through Grants.
WHOA!

Why does a nonprofit that collects money from little boys for camping trips and asks them to sell popcorn outside local supermarkets need more than half-a-billion dollars in the bank?
  • FACT: Camping Trip revenue does NOT support National Council.
  • FACT: Over 30% of the revenue from popcorn support the neighborhood kids.
  • FACT: Good Journalism seek out the answers through educated professionals NOT the general public before going to print.
  • FACT: Long Term Investment provides ongoing Program Support for more then a year.
And that $11.1 million spent on travel and conferences? And the $189,000 spent on lobbying legislative bodies?
  • FACT: $813,266 (0.54% of expenses) in Travel was spent for management.
  • FACT: $315,979 (0.21% of expenses) in Conferences was spent for management.
  • FACT: Non-Profits cannot spend more than 20% of their expenses on lobbying.
  • FACT: Boy Scouts spent 0.1% of expenses on lobbying. - Whoa?
Boy Scout spokesman Deron Smith did not answer questions directly, saying: “The BSA is one of the largest youth-serving organizations in America, with more than 4 million youth members and adult volunteers. When it comes to travel expenses, net assets or executive compensation, the BSA and our executive compensation, the BSA and our volunteer National Executive Board strives to be good stewards of its financial resources.”
  • FACT: 72 Board Members oversee their operations.
  • FACT: Nearly 100 years of successful operations.
He went on to about how the BSA builds the character and integrity of America’s youth.

To be fair, the National Council does give grants every year to needy Scouts. A total of $3,000 went to five Orange County Scouts ($600 each), according to the most recent tax returns.
  • FACT: To be fair $3,606,095 were given to Scouts in ONE YEAR.
  • FACT: More then every dollar received by National in public support was returned to the Community through Grants.
The Boy Scouts National Council earned a mediocre two of four possible stars from Charity Navigator. Revenue was down nearly 10 percent over four years, and spending was down nearly 4 percent. Still, it was ranked as one of America’s most trusted charities by “high net-worth consumers” in a survey released this week by the Luxury Institute in New York.
  • FACT: It takes $0.54 to raise $1.00 for the Scouts (decreases rating).
  • FACT: Program Capacity has lowered due to less public support (decreases rating).
  • FACT: Program Capacity was ONLY cut by less then a 1/3 of the revenue decline (decreases rating).
  • FACT: Boy Scouts is showing commitment in their financial resources during our recession (decreases rating).
  • FACT: Boy Scouts was ranked 5th Most Trusted Organization.

FEWER O.C. SCOUTING DOLLARS

Here at home, the Boy Scouts of America Orange County Council saw revenues drop by nearly 24 percent between 2006 and 2007, according to its (their) most recent tax returns.
  • FACT: Revenue drop was only in one calendar year, 2006.
  • FACT: Revenue has increased 18.32% between 2004 - 2006
At the same time, expenses rose by nearly 11 percent. The cost of management rose more then 61 percent. The top manager’s compensation rose nearly 8 percent.
  • FACT: Depreciation rose 152.4%.
  • FACT: Occupancy Expense rose 75.6% as agencies rose meeting rental charges.
  • FACT: Payroll Expenses for non-directors rose 44.6%.
  • FACT: Payroll Compensation for non-directors, which includes Health Insurance, rose 44.2%.
  • FACT: Employment Tax Expense rose 36.1%.
The local Scouts’ net assets, however, were up more then 15 percent.
  • FACT: Pledges Receivable (Accounts Receivables) were up 98.8%.
  • FACT: Receivables are considered an asset holding.
  • FACT: In time of economic difficulties Pledges are not always collectible.
Nearly 70 percent of Orange County Scouts’ spending is on programs, the camping/character-building activities that form the core mission of the group (down from more than 77 percent in the two prior years). About 21.5 percent was spent on management (up from 14.7 percent in the two prior years). And 11.4 percent was spent on fundraising (up 9.5 percent in the two prior years).
  • FACT: Over 70 percent was spent on programs (70.4%).
  • FACT: Program Spending in 2004, $7.14M; 2005, $7.48M; 2006, $7.50M (up 4.8% from the two prior years).
  • FACT: Only 8% was spent on Fundraising.
  • FACT: Management Increase mostly relate to taxes, payroll expenses, occupancy, benefits for staff and a major hit on Depreciation (152.4%)!

EXECUTIVE RAISE, WORKER LAYOFFS

Scouts spokeswoman Lara Fisher didn’t get into the large increase in management spending or the executive raise as revenues dropped
  • FACT: Management Increase mostly relates to taxes, payroll expenses, occupancy, benefits for staff and a major hit on Depreciation (152.4%)!
  • FACT: Lara Fisher would not know this information immediately until their CPA and accountants review the actual request, costing even more management expenses and time at the request of the OC Register.
Here is what she had to say: “We responded to a downturn in the economic market by lowering our budget 7 percent, to $8.4 million. ... The primary reason for the budget reduction was due to shortfalls in fundraising events involving donors in the construction and real estate industries. To cope with this downturn, we reduced our workforce and eliminated 11 staff positions. An additional two full-time positions will end at the close of 2008. These positions will remain open into 2009.”
  • FACT: Everyone hurts in a recessions and Boys Scouts are not exempt.
  • FACT: OC Boy Scouts elected NOT to reduce Program Spending.
  • FACT: OC Boy Scouts just like National are dedicated financially to the Program.
  • FACT: 2 out of 3 of Senior Scouting Executives had Compensation DECREASE.
  • FACT: Les Baron Compensation rose a mere 2.38%.
  • FACT: Cost of Living in Orange County rose 4.26%
  • FACT: An Outdoor Education, Outreach and Development Director were add to the 5 Highest Paid, equaling $239,311 in Compensation.
  • FACT: Overall Compensation actually DROPPED 0.83%.
  • OPINION: Outdoor, Outreach and Development all sound like Program Management not Operations?
  • OPINION: Appears to be a simple misclassification of roles.
An extra $300,000 of expenses was cut as well, she said.

(end)

Correcter's Opinion:
In summary, Boy Scouts along with numerous non-profits have seen and continue to see decreases in revenue when the economy was hit with a recession. The upside is what we can all help organizations that help our children, including the Girl Scouts.

Please support your local Scouting Programs. Thanks for listening to the real facts.

DISCLOSURE: I do not work for the Boy Scouts of America and obtain the information in my analysis solely from the same sources as the author of this article in the Orange County Register on August 30, 2008. Referenced here to correct the statements and add detail beyond the angle taken by Teri Sforza and The Orange County Register.

3 comments:

Anonymous said...

I nearly fell on the floor laughing this weekend when I read the article in the Orange County Register.

Nearly 70 percent of spending is on programs.

About 21.5 percent was spent on management.

And 11.4 percent was spent on fundraising.

That equals ~ 103%

Mark Sanderon said...

Hey Alan

Do not take the article seriously. As you can tell from the Orange County register's attack on now the Sheriff Union they really do not understand financial accounting.

Thank you for showing us the truth.

Mark

Chino Blanco said...

Hi Alan,

I'm an Eagle Scout. If you're trying to help Scouting, then more power to you.

You seem to be someone in the know. What's your take on what's being reported about the California Family Council?