Thursday, August 28, 2008

OC Register misrepresent Boy Scouts

Ten (10) Blogs in the last five days regarding the Boy Scouts - What is the agenda?

You really have to question the agenda of the OC Register and Teri Sforza as she continues to add more limited articles regarding one organization in such a short period of time.

Further, with her most recent blog (article) she places an extremely bias point of view in her “Vote” by presenting the interest of non-profit security holdings in one of two manners: (a) Use them for good deeds, or (b) hoard them because you got them.

Instead of talking in person with a Certified Public Accountant (Community Based Journalism) who specializes in non-profit accounting she seeks the counsel of the general public while further driving their response by presenting only numbers without fully understanding the purpose of these assets.

The (almost) million-dollar Boy Scout. Thrifty, indeed!)
In her first article (blog) she criticizes the Messrs. Ross II, Connelly, Williams and Baron salary while including in these figures reimbursed expenses and further not making any attempt to determine the amount of these compensation figures that are just on paper (healthcare benefits, employer wage expenses and so forth) and the actual pay being received by these executives. Also she does no research or intentionally omits critical information, within the same documents that show the salary, on Mr. Connelly or Ross to find out that the fact that after 43 years of service to the Scouting Organization, Mr. Connelly was in the process of retiring along with Mr. Ross after 39 years. Now that might be the reason you have three executives with high salaries and in the end you are left with one.

Further Mr. Williams actual “Management” salary was a mere $152K of the $13M spent on management of their operations.

The most insulting aspect of her first article is the implication that executives in the Boy Scouts should work for FREE by including reference to the Scout Law on Helpfulness, which states in part, “He does things willingly for others without pay or reward”.

I think that is enough said on the first article as for one I think I do good deeds through my work and I make a fair living.

Big Bucks for Boy Scout contractors
In her next article, she once again uses compensation figures that include reimbursed expenses and other amounts never seen by the employee.

She also places the amounts earned by their legal counsel, accounting and investment contractors that defend the organization and help ensure their investments are secured, audited and provided the highest rate of return.

I do not think we need to question why these things are important to an organization and the financial stability to function. Yes, some us might think that attorneys and accountants get paid too much; however, without them nobody would defend and protect their assets and then we would need to concern ourselves with fraud and exposure to greater loss of holdings. $3M is a pretty fair deal to protect $629M from greedy or uneducated hands.

The half-billion-dollar Boy Scout stash
Then we move the story regarding the securities held by the Boy Scouts. She points out that $528M is unrestricted holdings in securities WITHOUT reference the revenue generated from these holdings ($30M+) that support ongoing operations of the organization for more then just one year.

She further implies that these monies should be spent by stating, “Scouts can spend the money however they like.”. I would guess that if Boy Scouts did spend their principal holdings they would have nothing to fall back on nor do they have any revenue earnings that help keep the Scouting Program alive as has been they have for nearly 100 years. They must be doing something right.

Also she fails to note that the Boy Scouts of America are self-insured and these same funds would be used to pay claims against the organization and further result in an ongoing decrease in revenue when such losses are incurred.

Another insulting attack from the article is in the midst of her numbers she references about how $3,000 in grant money went to five Orange County Scouts without even referencing the fact that a combined total of $3.6M was given to grantees. This again only gives the reader very restricted and biased information leading one to think that very little was given in grants.

Another fact missing is the fact that $135M was spent on programs and only $13M was spent on management while still having an excess that exceeded the security dividends resulting in the ability to place additional funds in more long term stable sources in the wake of decrease funding.

The “smear campaign” against the Boy Scouts
Then came my email to Ms. Sforza regarding my concern regarding the lack of full disclosure of the detail and suggested prior to her publishing my email that “True Journalism requires True Involvement in the Community”.

OC Scouts leader’s pay rose while revenue fell
After her limited review of the Boy Scouts of America in Irving, TX she moved her interest a little closer to home in pulling numbers on the Orange County Council.

Instead of researching the growth of revenue throughout the current Scout Executive’s tenure she pulls only two years and compared them by percentage, instead of showing overall revenue growth under the current leadership.

Further, she pulls a 61% increase in management costs without looking closely enough or providing the reader the information to determine the underline causes for such an increase. This item I stated needed a little review to see what happened. Ms. Sforza never gives the reader the details in her four follow up articles so far this week.

All of this should become clear when their return for the entire year 2007 is filed here within the next month or so (past filings were in August with the latest in November). However, Ms. Sforza implies in her writings (2006-7) that the 2006 filing available on GuideStar actually represents figures including 2007 and yet it was filed in November of 2007 for calendar year 2006. I guess my 2007 tax returned filed last month represents part of or all of my earnings for 2008. A better representation here would be stated, “…throughout 2006” to help ensure clarity. The use of 2007 can be misleading and some will reference that as being more current then it actually is on paper.

She ends this article by comparing Les Baron’s salary to the national average for non-profit executives to show his compensation, including again reimbursed expenses among other things is more then twice the figure. Now a better comparison would have been based on the size of the organization (available from the exact same reference page she found the National Average), which shows organizations a little smaller then our local Boy Scouts Council receive an average compensation of $266K based on $13.5M in expenses (Boy Scouts of Orange County two-year average is roughly $15M). Les Baron’s compensation was $260K, not including reimbursed expenses and so forth.

Again, true representation of the facts with correct comparisons is critical if your true intent is to inform the public and not smear the facts with irrelevant figures.

OC Boy Scouts, by the numbers
An actual post other then the use of 2007 has summary numbers that are directly from year and not a through time figure as implied. The problem is that the average reader is presented with summary data only and not given guidance on how to analysis the numbers. This leads the reader to assume certain factual details.

I somewhat liked this post as a good starting point in my own research. It shows a steady increase in assets and an overall growth in revenue from 2004 to the end of 2006. However, how much of this revenue is program related, public contributions, membership dues, security sales, gain/loss from assets and so forth.

Now we need to address the question on the $1M increase in management. Again the detail behind the numbers is not presented and leads to assumptions.

Here are some of the items that increased
$210,000 Salaries (new hires > non-directors)
$120,000 Depreciation
$ 60,000 Recognitions to Scouts & Community
$ 60,000 Supplies
$ 40,000 Professional Fees

Yes, some of those new hires likely were released in 2007 as the Council made corrections to respond to the economic slowdown.

OC Boy Scouts wrestle the economic downturn
This leads us to Ms. Fisher’s response about an $8.4M reduction. After hiring new staff and predicting only a short economic slowdown OC Council was faced with the fact that the economy was not going to recover as fast and had to make major choices.

Due note that these changes are not reflected anywhere in the current available financial numbers as these will not show until next year when they file their 2008 tax return. With such a major hit from the economy the only statement I do not agree with from Ms. Fisher is, “Cutbacks will not affect service to the county’s scouting community.”

Her comment is strictly out of love and dedication for her services to the Community. Any cutbacks limit the services, time and resources personal have available to the members the organization serves.

Now we can argue over 8% increase in overall compensation from 2 years ago (2006) or address the situation that is happening today. What happened last year will be interesting to review and if they can limit compensation increase to near 5% (remember medical, reimbursed expenses, along with deferred payments are combined together.

Ms. Sforza continues to grind the mere 8% without detail and from two years ago. Further, she fails to represent the true comparison of Mr. Baron’s salary and the average of other non-profits the same size.

She also throws 61% on the table without providing the reader with any detail on that percentage, including the fact that a major portion was new hires. You are only left with the question why she is spoon feeding the audience and misrepresenting the comparisons.

National Boy Scouts respond: ‘We do a good job’
Now this reply I love, “[Boy Scouts of America] (is) very disappointed in the angle that you took in your stories/blog postings.”

The angle has been to drive public opinion with the least amount of information, guidance and statements that give misleading facts to the Community.

Vote! Cap the cash nonprofits can amass?
The perfect example of her desire to place Boy Scouts in a negative light with very limited understanding of non-profit financial management and their cash flow is her own personal assessment that security holdings do only one thing, prevent organizations from doing “good works, [by] hoard(ing) it”.

I think now the readers can clearly see the guided campaign against an organization that serves the youth in our Community and we will see what hidden agenda lies next for the OC Witchhunt against the Boy Scouts.

1 comment:

JohnB said...

Alan, I would be in favor of cutting off some of our foreign aide to other countries and giving afew hundred million to the scouts. We should be helping our own!!!