Where Does $100 to Challenge Aspen Go?

Challenge Aspen is a 501 (c)(3) based in Snowmass, Colorado. Established in 1995 by Houston Cowan (who retired May 31, 2017) and Amanda Boxtel, Challenge Aspen is a non-profit focused on people with cognitive and physical disabilities to have access to a wide variety of recreational and cultural activities through their “strong working relationship with Aspen Skiing Company, that includes access to the area’s four ski mountains, a dedicated staff, and a committed volunteer force.”

According to the IRS Form 990’s over the past three years (ending May 31st of 2017, 2016, and 2015), Challenge Aspen has been reporting total revenue of about $3.5 million annually with about $1.5 million coming from non-cash donations described as lift tickets and ski lessons. On the expense side, Challenge Aspen has been expensing the exact same amount as the non-cash donation for ski company instructors. What this appears to mean is that the organization donating the lift ticket and ski lessons (appears to be Aspen Ski Company) gets a charitable donation for making the donation to Challenge Aspen and then Challenge Aspen turns around and spends the exact same amount on Aspen Ski Company instructors.

If the above matching non-cash revenue and expense (since the two numbers are exactly the same) are not considered, then the question becomes:  How does Challenge Aspen spend the remaining $2 million raised annually?

In 2017, Challenge Aspen raised $3.4 million. After deducting $1.4 million in non-cash contributions of ski tickets and ski lessons, revenue was $2 million which primarily came from fundraising events, contributions and program fees.

Expenses totaled $3.3 million. After deducting $1.4 million in other expenses (Fees for services:  primarily Aspen Ski Company instructors), expenses were $1.9 million, categorized as follows:

• $917,000(46% of $2 million):  Compensation
• $293,000 (15% of $2 million):  Office-related Expenses
• $ 64,000 (3% of $2 million):  Fees for Services (Accounting, Fundraising)
• $ 51,000 (3% of $2 million):  Other Expenses (Interest, etc)
• $ 46,000 (2% of $2 million):  Advertising and Promotion
• $ 21,000 (1% of $2 million):  Travel and Conferences
• $326,000 (16% of $2 million):  Participant Lessons
• $163,000 (8% of $2 million):  Programs, Program Food and Travel

As illustrated above, $1,392,000 (70% of $2 million) was spent on staff compensation and administrative expenses while $489,000 (25% of $2 million)was spent on participant lessons and program and program related expenses.

Staff compensation for the 42 employees totaled $917,000 which equates to an average compensation of $22,000. However, the CEO, Houston Cowan received total compensation of $246,670 (note: in previous years: 2016 and 2015, he received $245,261 and $246,442, respectively). Information on the 990 indicates the organization paid him a bonus of approximately $128,000 annually so that he could save and have a theoretical $100,000 retirement income when he left the organization.  They basically paid him $250,000 a year which appears to be very high for a small non-profit that raises about $2 million in cash revenue annually.

Using the above information, $100 in cash revenue was spent as follows:

 $100:  Cash Revenue

-$ 46:  Staff Compensation

-$ 15:  Office-related Expenses

-$  3:  Fees for Services

-$  3:  Other Expenses

-$  2:  Advertising and Promotion

-$  1:  Travel and Conferences

-$70:  Subtotal Administrative Expenses

$ 30: Cash Revenue Remaining

-$ 25: Programs and Program Food and Travel

$  5:  Cash Revenue Remaining:  To Fund Balance

As illustrated above, cash donations are primarily used to pay the staff costs including the $250,000 compensation paid to the CEO.  $70 out of every $100 in revenue are used for these expenses. $25 out of every $100 are used for programs and program food and travel. $5 out of every $100 was not spent and added to the fund assets.

To read the IRS Form 990 (2016) of the year ending May 31, 2017, click here.