How Boy Scouts of America Spends Revenue

The Boy Scouts of America (Boy Scouts) is a tax-exempt, non-profit 501 (c) (3) organization headquartered in Irving, Texas.  As one of the largest youth organizations in the US, the Boy Scouts has gone through some tough times the past few years with allegations of child sexual abuse by scoutmasters and other leaders that triggered a bankruptcy filing in 2020. With a recent settlement of $850 million for the thousands of sexual abuse victims, one has to wonder about the financial details of the organization.

The most recent Form 990 (2019) reports the following key financial information about the Boy Scouts:

Total revenue was $409 million in 2019 (compared to $285 million in 2018), which primarily came from 6 sources:

• $172 million:  Investment Income, Net Rents, Royalties, Sales, and Gains
• $ 84 million:  Membership Dues
• $ 58 million:  Local Council Assessments and National Eagle Association
• $ 51 million:  High Adventure Bases
• $ 30 million:  Contributions, Gifts, and Grants
• $ 14 million:  Seminars, Training, Conferences, and Other Program Revenue

As illustrated above, the largest source of revenue is from Gains on the sale of assets.  In 2019, the Boy Scouts sold a large block of securities that resulted in a $135 million gain.

Expenses totaled $421 million (not including $9 million in depreciation) and can be categorized as follows:

• $135 million (33% of revenue):  Insurance
• $ 85 million (21% of revenue):  Insurance Claims
• $ 79 million (19% of revenue):  Compensation
• $ 34 million (8% of revenue):  Office-Related Expenses
• $ 30 million (7% of revenue):  Payments to Affiliates
• $ 25 million (6% of revenue):  Other, Interest, Advertising and Promotion
• $ 20 million (5% of revenue):  Travel and Conferences
• $  8 million (2% of revenue):  Fees for Services
• $  5 million (1% of revenue):  Grants

As illustrated above, the Boy Scouts had a $135 million insurance expense which appears to be why the organization sold the large block of securities.  In addition, the Boy Scouts had $85 million in insurance claims, which is an expense (and not revenue from insurance ) which means the Boy Scouts paid the claims expensed. It is also important to note the Boy Scouts started the year with $532 million in net assets. With the recognition of $85 million in net unrealized losses and the write off of $17 million in pledges receivable, net assets fell to $408 million at year-end.

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

 $100:  Revenue

-$ 33: Insurance

-$ 21:  Insurance Claims

-$ 54: Subtotal:  Insurance and Insurance Claims

 $ 46:  Remaining Revenue

-$ 19:  Compensation

-$  8:  Office-Related Expenses

-$  7:  Payments to Affiliates

-$  6:  Other, Advertising, Promotion, Interest

-$  5:  Travel and Conferences

-$  2:  Fees for Services

-$  1:  Grants

-$ 49: Subtotal Organisation Expenses

-$  3:  Amount Overspent

As illustrated above, more than half of revenue ($54 out of every $100) was spent on insurance and insurance claims, which appears to be due to the lawsuits filed against the Boy Scouts.  The remaining revenue was used to cover the organization’s expenses (i.e.compensation, office, advertising, travel, fees, grant, etc).  The Boy Scouts actually spent $103 out of every $100 received with the deficit covered by the net assets.

To read the IRS Form 990 (2019), click here.