Bankruptcy, everything but the legalese

[David CO]

1 hour ago, Eagle94-A1 said:

Sadly the professional's focus is on the  "3 M's: Membership, Manpower, and Money."

Which is really the same thing, since their only reason for having membership and manpower is to make money.  

[PeterHopkins]

11 hours ago, fred8033 said:

So ... "program expenses" ... I'm not sure we're comparing apples to apples.  What is a program expense and what is not?  of the 49% salaries, what is program expense versus overhead. 

All expenses are categorized on Form 990 into one of three categories: (1)Program, (2) Management and General, and (3) Fundraising.

Program expenses are costs associated with the organization's efforts to serve its constituents and accomplish its purpose(s). A clear and obvious example would be the salary paid to a summer camp staffer.

Fundraising expenses are costs incurred in connection with soliciting donations. One of these would be the printing and mailing costs for requests to sponsor a Scout at summer camp. Another would be the costs to produce special Friends of Scouting CSPs.

Management and general expenses is the catch-all category. If it has nothing to do with program delivery or fundraising, it is management and general. An example would be fees paid to a bankruptcy attorney representing the organization.

Organizations can use either of two approaches in classifying their expenses. The first is recording at source. This is nearly impossible and rarely done. For instance, if a DE is paid monthly, the De would report to the accounting department the percentage of time s/he spent that month in each category, and that would be captured in the organization's books and records as three different types of salary. If the DE later gets a bonus, you would look first to the reason the bonus was earned for an indication as to which category should absorb it. Any amount that could not be traced to a specific function would be allocated base don the time the DE spent on each function over the period to which the bonus relates.

The second, more common approach is to record specific functional expenses (for instance, the salary paid to an employe whose responsibilities are exclusively fundraising or that camp staffer whose salary is explusively program) and then record other expenses as mixed-function expenses. At the end of the financial reporting period, the mixed-use expenses are allocated among functions using some reasonable method, sometimes based in part on past history.

The allocation of expenses by function is rarely an exact science, but it does need to be reasonable. For instance, if a DE spends 52% of his time on program delivery, 34% on fundraising and 14% on general matters, then, in a perfect world most things associated with that DE should be allocated based on those percentages. When you drill deep down, that means the rent associated with the square footage taken up by the DE's cubicle needs to be allocated. Once you have everybody's cubicle and office space allocated, you then need to allocate the common areas of the office. Even the cost of paper for the photocopier can be something difficult to allocate, unless you require employees to enter a code each time they make a copy. If 45% of staff salaries are allocated to the fundraising function, it is likely that a larger percentage of the copy paper expense is allocable there, since fundraising simply uses more paper than program.

The quality of the functional expense allocations depends on the effort put into getting it right. Usually, a practical approach to expense allocations is taken, provided it is demonstrably reasonable.

In the real world, organizations tend to allocate as little expense as possible to the fundraising function and as much as possible to program, since that helps them in soliciting more donations.

[fred8033]

52 minutes ago, PeterHopkins said:

All expenses are categorized on Form 990 into one of three categories: (1)Program, (2) Management and General, and (3) Fundraising.

Program expenses are costs associated with the organization's efforts to serve its constituents and accomplish its purpose(s). A clear and obvious example would be the salary paid to a summer camp staffer.

Fundraising expenses are costs incurred in connection with soliciting donations. One of these would be the printing and mailing costs for requests to sponsor a Scout at summer camp. Another would be the costs to produce special Friends of Scouting CSPs.

Management and general expenses is the catch-all category. If it has nothing to do with program delivery or fundraising, it is management and general. An example would be fees paid to a bankruptcy attorney representing the organization.

Organizations can use either of two approaches in classifying their expenses. The first is recording at source. This is nearly impossible and rarely done. For instance, if a DE is paid monthly, the De would report to the accounting department the percentage of time s/he spent that month in each category, and that would be captured in the organization's books and records as three different types of salary. If the DE later gets a bonus, you would look first to the reason the bonus was earned for an indication as to which category should absorb it. Any amount that could not be traced to a specific function would be allocated base don the time the DE spent on each function over the period to which the bonus relates.

The second, more common approach is to record specific functional expenses (for instance, the salary paid to an employe whose responsibilities are exclusively fundraising or that camp staffer whose salary is explusively program) and then record other expenses as mixed-function expenses. At the end of the financial reporting period, the mixed-use expenses are allocated among functions using some reasonable method, sometimes based in part on past history.

The allocation of expenses by function is rarely an exact science, but it does need to be reasonable. For instance, if a DE spends 52% of his time on program delivery, 34% on fundraising and 14% on general matters, then, in a perfect world most things associated with that DE should be allocated based on those percentages. When you drill deep down, that means the rent associated with the square footage taken up by the DE's cubicle needs to be allocated. Once you have everybody's cubicle and office space allocated, you then need to allocate the common areas of the office. Even the cost of paper for the photocopier can be something difficult to allocate, unless you require employees to enter a code each time they make a copy. If 45% of staff salaries are allocated to the fundraising function, it is likely that a larger percentage of the copy paper expense is allocable there, since fundraising simply uses more paper than program.

The quality of the functional expense allocations depends on the effort put into getting it right. Usually, a practical approach to expense allocations is taken, provided it is demonstrably reasonable.

In the real world, organizations tend to allocate as little expense as possible to the fundraising function and as much as possible to program, since that helps them in soliciting more donations.

Outstanding write-up.  THANK YOU !!!!  

I'm still slightly confused on how you allocate salaries by program or not in an organization such as scouting.  To be more precise, salary of directory of training?  IMHO, that's program.  Training oversight / coordination is a major focus of the council and a big contributor to program quality.  Front desk receptionist.  Most front desks deal with mostly scout leaders and new parents wanting to find the scout shop or individual signing up for things.  So, I'd allocate front desk to program.  Essentially, I'd allocate most roles (DE, advancement, training, etc) to program as that's how scouting works.  "Management" is nebulous.  Is that finances, marketing, etc? 

It must be an art to decide which is which or done per some generally accepted accounting principles. 

 

Edited September 2, 2021 by fred8033

[Eagle94-A1]

6 hours ago, David CO said:

Which is really the same thing, since their only reason for having membership and manpower is to make money.  

Not all pros are in it to make money. There were many I encountered who wanted to give back to the program that gave them so much. Sadly we don't stay around too long.

[InquisitiveScouter]

12 hours ago, Eagle94-A1 said:

NOT TRUE!

In this interview https://dianerehm.org/shows/2019-08-20/a-moment-of-reckoning-for-the-boy-scouts-of-america-and-a-history-of-sexual-abuse  .

He stated he wanted the complete dissolution of the BSA and IF something like Scouting is still needed, it starts from scratch.

Again the IF it is still needed, from the tone of the response, he doesn't believe Scouting is needed. 

 

 

 

And here is the essence of Kosnoff's stance...see in his tweet, "BSA has forfeited the moral right to exist."  https://twitter.com/SexAbuseAttys/status/1359252870462205954

Has it??

Only individuals can be moral agents, not corporations.  But, when the collective decisions of those individuals in a corporation tend toward objectives that seem, much of the time, to be in opposition to the beliefs/mission/ideals of the program they exist to support, then does the corporation take on the embodiment (which is what incorporation means  ) of a moral agent? 

That's the question I struggle with, based on juxtaposing a heap of positive experiences in Scouting (which were 99% enabled or provided by volunteers), and a heap of negative experiences in dealing with professionals employed by the BSA at all levels.

As Scouts, we promise to be "morally straight."  And, ultimately, we ourselves must decide, under the tenets of our faith, what is "morally straight."  

I also often think it is time for the BSA corporation to go, but I continue to hold out hope that there is some way to scrub it clean of the service to Mammon...

The one place I see "true" Scouting is in the local units.  So that is where I focus, for now.

 

 

[vol_scouter]

7 hours ago, David CO said:

Which is really the same thing, since their only reason for having membership and manpower is to make money.  

That is simply not true.  Generating more money does not increase the professional salaries.  If you believe in the values of Scouting, then you want as many children to be in Scouting.  To have more children requires more manpower (volunteers) and to provide quality program requires money.  The idea of the three M's is to keep the needs of the Scouting in the minds of the professionals.

[Gilwell_1919]

13 hours ago, CynicalScouter said:

Again, and I do hate to repeat myself, but I will.

The role and function of an attorney is to maximize the amount/value their client receives as compensation.

It is NOT the role and function of Kosnoff, or Stang, or ANY attorney for ANYONE other than BSA to care one whit about BSA and the "current scouts".

I'll tell you what an attorney acting ethically would feel: "I feel bad for Johnny. I feel worse for my client who was [insert listing of sexual assault that took place] as part of a BSA program where the BSA, COs, and LCs were negligent. Maybe Johnny should ask BSA leadership why it failed both Johnny AND my client."

You do what we told my troop's Star and Life Scouts last spring: Get your Eagles quick and do NOT assume BSA survives past July.

But again, while you are talking to that 15-year old, why not have a conversation with the 51-year-old who, when he was 15, was sexually abused and had it swept under the rug by his local council? Why is he not worthy of your sympathy and concern?

Again, there are two sets of victims here: the sexually abused scouts of days gone by and the current scouts who will miss out on opportunities today. BOTH can blame BSA for operating in a manner that led to this point.

You know who is NOT to blame? The lawyers for the victims of child rape who are meeting their ethical duties to obtain the best possible settlement for their client(s).

You keep wanting to blame everyone BUT BSA.

The same applies to me. My role, as a leader, is to protect my scouts... be it from physical, mental, emotional, or sexual abuse... my number one priority is, as will always be, the youth under my care. If that means I have to question the motives of a rapacious lawyer or call out his behavior, which has real implications for my scouts, I will continue to do so. I accept his agenda is to represent his clients, whether that it is from financial motivation or because it's the right thing to do is moot... and my agenda is to protect my scouts; however, as a southern-reared gentleman, I believe in honor and that it matters how a person wins. My point is, a person can win without salting the earth.

I read, verbatim, Tim K.'s social media posts that have been entered into various motions, especial the motion from the insurers that asked the judge for disclosure of the AIS structure. IMHO, I did not think a lot of his public comments were appropriate or needed. Again, how a person wins... matters. I am glad this group of lawyers banded together and are holding BSA to account for the past... I say bravo. But the manner in which Tim K. is conducting himself... seems akin to kicking a person in the face once they are already on the ground - and then reaching into the person's pocket to take a year's worth of lunch money. They've already won... do they have to completely destroy an institution that so many kids still enjoy? Most of us have said repeatedly, BSA is not scouting. But, the point I am trying to make... is that there are still a lot of kids that want to be in "BSA's scouting program". I don't think "hurry up and make Eagle Scout" is the best answer. Granted, I am pushing scouts along the program a little faster these days... and, as an Eagle Scout myself, I will adapt and overcome whatever aftermath we have to confront once the dust settles... but... I will stand by the 12 principles in the scout law, which don't include a "ground-and-pound" continuation after a person (BSA) is already unconscious. 

Let me be clear, what BSA did for 100-years, is unfathomable and beyond the words in any language. I am empathetic towards the victims that had their innocence stolen and their lives ruined. I am not, and would never try to minimize how they feel or diminish their pursuit for justice. But, to not give a modicum of consideration to how this is affecting the current youth... seems a bit hypocritical from my perspective. I have never given much consideration towards BSA national... because they never gave much consideration for me or my scouts... it was always about the almighty dollar. So, my scouting... while it follows BSA's rules, policies, and guidance... is closely aligned with Baden Powell's vision of scouting. The only reason I am cleaving to BSA's version is because my scouts still feel pride from attaining the rank of Eagle Scout. Over the last few months I have had very real conversations with some of my older scouts because they are more than capable of reading the news and other posts on the internet. Some are beside themselves that they may no be able to make Eagle Scout before it is too late, others feel as if their accomplishment of making Eagle Scout has been severely diminished in the "court of public opinion".

We can certainly discuss the same points... over and over... but outside of divine intervention... nothing will sway me from protecting my scouts. Perhaps my anger and frustration should be directed solely at BSA, and it was at first, but when I read repugnant comments from Tim K.... it makes my blood boil. Why? Because, like it or not, our scouts still wear uniforms that say "BSA" on them. So calling BSA evil, pedophiles, and other choice words... affects my scouts that still wear the Boy Scouts of America uniform. If BSA doesn't make it out of this, you can believe I will start my own youth scouting program or support another program like Trail Life. But for now, I still have BSA Scouts under my care... and that means something to me. 

Hopefully that all makes sense to you.  

[SSScout]

Kosnoff is why the BSA has existed.  The "program", not the abuser....    One cannot legislate morality.  

The purpose of the BSA, of ANY Scout type organization (or school, or church)  cannot   be  the physical,  mental or , sexual abuse  of kids.  It is the depraved adult or previously abused kid that seeks to use the cover of the organization for their personal gratification that is the problem.  If the organization covers up, or corporately IGNORES the abusive person, , that is not reason for the organizations existence, but is a major problem in itself. THAT is why the BSA is where it is today.  The leadership of decades ago should be here to see the results of their corporate choices. 

Many , most of the abusers are now dead and gone.  They cannot be held to account. The BSA is still here and is being made to face and accept the responsibility of it's prior decisions.  Shame on the prior leadership for hoping the problem would go away if ignored and not criminally addressed. 

[vol_scouter]

It is interesting to me as I read so many criticisms of local councils (LCs) and professionals.  My ~25 LC executive board experience reveals a different look.  Professionals primarily recruit and support program.  Fundraising is a very small part of time for most professionals and, in those efforts, the professionals primarily are encouraging volunteers to make the contacts.  In program, volunteers are responsible for all program but what happens if the volunteer fails?  If the volunteer fails to do their job, then the professionals must do the job.  When it is time to hand out accolades, the professionals are told to attribute all success to the volunteers (who may have done very little or even totally bailed).  We volunteers seem to forget all of that hard work by the professionals.  

Without professionals, there would be many fewer Scouts, little if any program beyond the unit level, and less organization.  Many programs would fail because the volunteer planned to do their job but were not able to do so.

Scouting is all about delivering the mission while pursuing the vision.

[InquisitiveScouter]

@vol_scouter, very glad your experience, in general, has been positive...

But, help me please... on the one hand you say 

19 minutes ago, vol_scouter said:

volunteers are responsible for all program

and on the other, you say...

19 minutes ago, vol_scouter said:

Without professionals, there would be many fewer Scouts, little if any program beyond the unit level, and less organization.

Those two assertions seem to be at odds.

Our entire district program is planned and run by volunteers.  We haven't had a DE in I don't know how long...

Council program is non-existent, other than Summer Camp...there has not been a council program event here for units in over three years...

(But there are at least five council fundraisers per year...golf outings, skeet shoots, silent auctions, popcorn, camp cards, etc, etc, etc...)

And the last council program event??? It was organized and run by volunteers.

Professionals here are most involved in scrutinizing the budgets of these events in order to set a price which guarantees income for the council...  (I have been in many of those meetings  )

Edited September 2, 2021 by InquisitiveScouter

[Gilwell_1919]

15 hours ago, David CO said:

He is probably going to feel pretty much the same way that little Tommy felt when BSA acquired Lone Scouts of America.  BSA never gave a single thought to how hundreds of thousands of children felt as it was ruthlessly stomping out its competition in its quest to gain a monopoly on scouting.  

That is a valid point. 

[David CO]

25 minutes ago, SSScout said:

The leadership of decades ago should be here to see the results of their corporate choices. 

Many of them are still here.  The guys on the national and council boards often serve for 20 or 30 years.  They do see the results.  But instead of being apologetic for their decades of bad decisions, they blame everyone but themselves.  They will never accept responsibility.

 

Edited September 2, 2021 by David CO

[InquisitiveScouter]

21 minutes ago, vol_scouter said:

Without professionals, there would be many fewer Scouts, little if any program beyond the unit level, and less organization. 

Without volunteers, there would be NO Scouts

[vol_scouter]

4 minutes ago, InquisitiveScouter said:

Without volunteers, there would be NO Scouts

How very true!

Professionals and volunteers are all needed to provide a robust program and to maximize the number of youth in Scouting.  The 'we' versus 'they' that we see on this forum is sad and counter productive.  The same thing can be said of the national council versus local council.  All want to provide a quality Scouting program to as many youth as possible - to meet the mission and fulfill the vision.

[johnsch322]

35 minutes ago, SSScout said:

Shame on the prior leadership for hoping the problem would go away if ignored and not criminally addressed. 

It wasn't covered up because they thought it would go away...it was covered up because they did not want BSA's reputation tarnished which would have made it harder to raise money.  Funny how it always comes down to the money i.e. they sacrificed boys mental health and lives for the sake of the almighty dollar.