Where Does $100 to the Boy Scouts Go (2020)?

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.

In 2019, the Boy Scouts sold a large block of securities presumably to offset a $135 million insurance expense and $85 million in insurance claims, both of which contributed to a deterioration in net assets from $532 million  to $408 million.

The most recent Form 990 (2020) reports the following key financial information about the Boy Scouts:

Total revenue was $275 million in 2020 (compared to $409 in 2019 and $285 million in 2018), which primarily came from 5 sources:

• $109  million:  Seminars, Training, Conferences, and Other Program Revenue
• $ 93  million:  Membership Dues
• $ 54  million:  Local Council Assessments and National Eagle Association
• $ 10 million:  Contributions, Gifts, and Grants
• $  9  million:  High Adventure Bases

As illustrated above, the largest source of revenue is from seminars, training, conferences and other program revenue.

Expenses totaled $317 million (not including $8 million in depreciation) and can be categorized as follows:

• $ 72 million (26% of revenue):  Insurance
• $ 36  million (13% of revenue):  Insurance Claims
• $ 65 million (23% of revenue):  Compensation
• $ 58 million (21% of revenue):  Bankruptcy Expenses
• $ 38 million (14% of revenue):  Other, Interest, A/P, Payments to Affiliates
• $ 25  million (9% of revenue):  Office-Related Expenses
• $ 19   million (7% of revenue):  Fees for Services
• $  2  million (1% of revenue):  Travel and Conferences
• $  2   million (1% of revenue):  Grants

As illustrated above, the Boy Scouts had a $72 million insurance expense  in 2020. In addition, the Boy Scouts had $36 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 $408 million in net assets. After adjustments for the $50 million in excess expenses (over revenue), unrealized gains on investments ($11 million) and adjustments (write off of pledges) to assets (-$20 million), net assets was reduced to $350 million at year-end.

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

 $100:  Revenue

-$ 26: Insurance

-$ 21:  Bankruptcy Expenses

-$ 13:  Insurance Claims

-$ 60: Subtotal:  Insurance, Insurance Claims, and Bankruptcy Expenses

  $ 40:  Remaining Revenue

-$ 23:  Compensation

-$  9:  Office-Related Expenses

-$ 14:  Other, A/P, Interest, Payments to Affiliates

-$  1:  Travel and Conferences

-$  7:  Fees for Services

-$  1:  Grants

-$ 55: Subtotal Organization Expenses

-$115: Total Expenses

-$  15:  Amount Overspent

As illustrated above, 60% of revenue ($60 out of every $100) was spent on insurance,insurance claims, and bankruptcy expenses 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, grants, other expensesetc).  The Boy Scouts actually spent $115 out of every $100 received with the deficit covered by the net assets.

To read the IRS Form 990 (2020), click here.