Business or Organization

[OldGreyEagle]

Ok, I never could let a gauntlet lay around unattended. So, is the BSA a business or organization? Just to make things interesting, I ask if you argue that the BSA is a business, please give examples of what IS an organization.

[tjhammer]

Well, my position on this underlying issue should be consistent and clear to all readers by now, but just to recap: 1) I love Scouting and 2) I support the Supreme Court decision and 3) I deplore Scouting's homophobic position (in other words, I think we should change the policy, but we should do it on our own terms instead of being compelled by outside forces to do so).

 

That being said, the distinction I alluded to in the post that spun this thread ( thanks OGE) is how fortunate (at least fortunate for those running BSA that support the policy, and probably fortunate for Scouting as a whole) that it was that the lawyers that sued BSA (and the activist groups who continue to attack BSA) brought (bring) a weak argument, and overlook a better position which most likely would hold more merit.

 

BSA was being sued in Dale v BSA and the argument put forth was that the BSA was a "place of public accommodation", similar to a park. I always thought that was a bit absurd, and showed the naivete of those bringing the suit. Of course BSA could easily defend against that position... they successfully argued that they were in fact a private organization, not a "park" or "public accommodation". The only real evidence that the Dale side (and when saying Dale, I'm really referring to most of the different cases that have been brought and just summarizing them as one) tried to bring to the court to "prove" their "public accommodation" position were things like the BSA's charter from Congress and the fact that BSA units were meeting in public places (schools, firehouses, etc). I thought at the time it was a weak argument at best.

 

But instead of arguing to the courts that BSA should be measured not as a "private organization" but a "place of public accommodation", how do you believe the rulings (and resulting instructions to the BSA) would have differed if those bringing the suit framed the argument differently. What if they had argued that the BSA is a "business"... a business not at all dissimilar to a local diner, or a convenience store, or a tire warehouse?

 

[Rooster7]

First, just for the record, I hate the term homophobic. Gays and their liberal supporters created this term to portray their opposition as fearful bigots as opposed to religiously principled people. So, if you want to continue an intelligent discourse, refrain from labels and try logic.

 

As to BSA being a business, please demonstrate to me who is making a financial profit. Aside from those folks that earn salaries (which is perfectly acceptable for a non-profit organization), who else is making money?

[Bob White]

Court cases in the past have tried to claim that THE BSA was a business. They were all dismissed. The federal government through an act of congress recognizes the BSA as a private not for profit organization. Every state government recognizes local scouting councils as 501C not for profit charitable organizations.

 

Organizations must meet stringent guidelines in order to be recognized as a 501C. To try and say that the BSA is a business when the government says it is not, is a lost cause.

 

As Rooster points out, if you understand what makes a business a business then it is easy to see that the BSA is not one. The fact that we have employed a few people to administrate our program does not make us a business. No one makes or loses income based on the profitability of the organization. That, along with following strict governmental guidelines how money can be made and spent and assets used and property owned, makes us a not for profit group.

 

How would the Dale case been different if they had claimed we were a business? It would have ended sooner.

 

Bob White(This message has been edited by Bob White)

[Bob White]

(This message has been edited by Bob White)

[berkshirescouter]

Is National Public Radio or your local public TV or radio station a business or Non-profit Organization? I think BSA is an organization based on an assumption that all non-profits are organizations.

[eisely]

The question of whether BSA is a business or organization matters because businesses fall under the sway of employment laws and other laws prohibiting discrimination more fully. Many states and local jurisdictions prohibit businesses from discriminating on the basis of sexual orientation, and discrimination based on sexual orientation is elevated to the same level as discrimination based on race, religion, etc. There was a case litigated all the way to the California Supreme Court in the last decade on this very question. I forget the citation. The California Supreme Court held that scouts are not a business within the meaning of the relevant California law.

 

Non profit organizations can employ people and run business enterprises (scout shops) that are ancillary to their principal activities without becoming businesses or losing their tax exempt status. Thus you see souvenir shops in cathedrals and food vending at Mt. Vernon, without the entities owning and operating those facilities becoming businesses.

 

As an aside, there was an ironic application of the fair housing laws in Los Angeles several years ago. LA had brought sexual orientation into its laws as a class protected against discrimination. One of the early cases was brought be a heterosexual couple, that is a man and a woman, neither transgendered, who litigated against their homosexual landlord. They had been living together sharing an apartment. The building was acquired by a homosexual male investor who immediately began favoring males of his orientation. He tried to force this couple out and break their lease. They took him to court and won.

[Scoutmaster Ron]

Sounds like this question is Proffesional Baseball a business or a sport? is there really one answer?

[tjhammer]

Hmmm... anyone ever seen one of the different Federal Tax filings the BSA makes (reporting with multiple TAX IDs as a few separate entities at the national level, which certainly makes it difficult to research and know the true financial statements of the "organization")? Since this "non-profit's" tax statements (all of them) should be available from the IRS (and for that matter, offered up by the "organization"), can someone find a copy of the recent ones?

 

Two points... several more to come later, if necessary...

 

1 BSA is in the merchandising business... their catalog, which supplies far more than just uniforms and patches, is operated as a profit center, with profits going to the BSA professional retirement fund. And it goes far beyond the souvenir shop analogy mentioned before. The supply division business is predatory, protective and competitive with other businesses.

 

2. BSA retirement funds contained so much money a few years ago, and were drawing so much profit in the strong markets, that the BSA was compelled by the IRS (under threat of losing their non-profit status on that business) to introduce an early retirement program. (Recall three or four years ago when this was implemented? Many people cheered the BSA for what seemed like good employee management, making room in the ranks for young, up-and-coming staff by clearing out older, near retirement folks.) They, like a lot of forward thinking corporations offered very lucrative early retirement packages, but in reality they were compelled to do so because of the profitability of the retirement funds).

 

 

Bob White, in typical matter of fact style, says this is an old argument that's been debunked by the courts already... not really, and the argument's never been brought armed with inside, detailed information.

 

[OldGreyEagle]

"The supply division business is predatory, protective and competitive with other businesses."

 

Are you talking about the catalog and scout shops? With the myriad threads blasting the price and quality of everything from venture long pants to scout shorts, I am hardly sure predatory is a word I would use. The Scout merchandising wing of the organizaiton is hardly a threat to REI, Coleman, Columbia or even Wal-mart with its gear.

 

That being said, I used to work at a not-for-profit hospital. The hospital was in an urban community and was the largest employer. To help pay for a new high school (so the story goes) the school district sued the hospital regarding its not for profit status for a period of 7 years. The judge did find that in 6 of the years the hospital met Pennsylvania's requirements for not for profit status, and one year it didnt. Then the hospital had to pay taxes on that one year. We employees couldnt understand how we could be not for profit, for profit and then not for profit in the matter of a few years.

 

I guess the same thing could be done to the BSA, but all that would prove was sloppy accounting. I maybe overly Pollyannaish, but the goal of Boy Scouts really is for the boys. Maybe some of you are choking as you read that, but I dont think anyone in BSA is in it for the money. With all that was made of Jimmy and Tammy Faye Baker a few years back, and the Enron scandal most recently if some reporter could make a case that the BSA was unwisely spending funds, or the funds were being spent for non "not for profit" items, I am sure it would be headlines on some cable news show somewhere.

 

I have to admit when I read John D's characterization of the legal profession in the A "plug" for safe scouting guide" thread I was a little taken back, but if the arguments presented is the best that may be presented, I may have to back up John D

 

(This message has been edited by OldGreyEagle)

[Bob White]

Ron wrote Sounds like this question is Proffesional Baseball a business or a sport? is there really one answer?

 

Ron, Baseball as a game is a sport. A professional baseball team however is a business. There is a person or persons who loses or makes money depending on the profitability of the business. There are assets whose sales would contribute to the income of specific inividalus. In scouting no one person's wealth rises or falls as money is generated or spent. So yes there is an answer, there are organizations who se goal is to increase profits for personal gain and those that are not for profit agencies that use funds to expand services to others. Scouting is a non for profit organization.

 

I had never heard of the BSA supplies profits going to the professionals retirement fund so I called three scouting professionals from different councils and none were aware of such a practice either. They all contribute personally to their own retirement fund. I'm not saying you are wrong, I'm just saying I would think that the pros I talked with would know how their retirement plan worked.

 

As far as the the supply division being a business, you have to go back to the definition of a business compared to a not for profit. No person or persons wealth is tied to the profitability of the supply division. If it loses money no individual or group of stock holders loses money. If it makes a profit no individual or group of stock holders see their personal wealth increase. No individual group of investors profit from the sale of assets.

 

"The supply division business is predatory, protective and competitive with other businesses."

I have no idea what your point is. As far as predatory in what way, all products are fair market priced. Individual businesses can carry scout items as well as local service centers. All pay the same cost and all sell for the same price.

 

Protective, the BSA holds copyright and trademark to its name, image and materials. so does the Girl Scouts, the YMCA, the Salvation Army, Pop Warner football. Image anbd property protection is not only for Pepsi, Microsoft and the NFL.

Competitive, what business do we compete with? Do you think all those uniform and equipment pieces are made by BSA employees. We deal with a myriad of manufactures in the private (profit) sector for the products the BSA supply division is a warehousing and distribution service not a manufacturing plant.

 

As before, you seem to be chasing conspiracies that only exist in your imagination.

 

Bob White(This message has been edited by Bob White)

[eisely]

I have no idea what tjhammer is talking about, but scandals and conflicts of interest in major non profits are not unheard of. The only thing that BSA has a monopoly on is those items imprinted with its copyrighted logos and uniforms. The camping gear they offer is competitively priced. In rural areas of the country the scout catalogue may be the only source for some items for some people. I have no idea how profitable the supply division is, but I find it hard to believe it would support the kind of thing tjhammer describes.

 

Coming back to the larger question of scandal however...

 

The San Diego chapter of the Red Cross, and the Red Cross generally, has come under criticism for raising large sums of money after 9 11 that were represented as disaster relief for 9 11. A large portion of those funds were initially placed in general accounts for other purposes. While the red cross does good things and still deserves support, it was less than honest to raise funds this way.

 

I think it was in the 80's that the national United Way organization was revealed to be run by its president as a personal business. The United Way was contracting for services on a sole source procurement basis with businesses owned and operated by family members of the president. This had gone on for several years before it came to light.

 

In another thread a discussion regarding diversion of funds for personal use from a Cub Scout Pack treasury we learned how a pack treasurer apparently had stolen funds.

 

In my mind the larger problem with non profits generally, as with the government, is that funds and financial matters generally are not treated with the same level of diligence that people devote to their own check books or corporations to their accounts. Of course the Enron board of directors signed off on waivers for Enron's own internal rules to set up the partnerships run by the CFO for his own benefit and facilitated cooking the books. This guy, and some board members, have substantial civil liability, if not criminal liability.

 

There is a lot off sloppiness out there that creates opportunity. The example of Jim Baker and Tammy Faye was cited. That is a classic example that probably would not have come to light had not the greed of the beneficiaries of the fraud pushed the larger organizations into bankruptcy.

 

What is the lesson for us? BSA national and local councils would be well advised to not merely comply with the law, but proactively disclose the financial side of the operations. Income statements and balance sheets should be posted on the internet for all to see.

[ScouterPaul]

Here is something to ponder. There is no question the BSA is non profit organization. However I believe the BSA still falls under all goverment employment laws. I wonder what would happen if the BSA refused to employ a person because of their sexual preference (assuming that the Council in question is in an area that has sexual orientation as part of their discrimination laws).

[eisely]

I am not an attorney, much less a labor lawyer, but I think the answer is that non-profits enjoy some lattitude here that ordinary businesses do not enjoy. Churches and educational institutions affiliated with specific denominations are allowed to discriminate in their employment and set standards and criteria that probably would not be permissible to others. If BSA is a values based organization, could it not make similar employment decisions? This is not to say that BSA would be exempt of other employment laws such as laws governing hours, wages, and child labor.

[Bob White]

All BSA employees are registered members of the BSA and must meet the joining requirements.

 

Bob White