Where Does $100 to the Boy Scouts Go (2021)?
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 (a Chapter 11 reorganization) in 2020. With a recent settlement of an estimated $2.4 billion (to be put into a trust) for the thousands of sexual abuse victims (estimated at 80,000), 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.
In 2020, total revenue was $275 million in 2020 (compared to $409 in 2019 and $285 million in 2018), which primarily came from 3 sources:
- $109 million: Seminars, Training, Conferences, and Other Program Revenue
- $ 93 million: Membership Dues
- $ 54 million: Local Council Assessments and National Eagle Association
During that same period, 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 were reduced to $350 million at year-end.
In 2021, total revenue was $271 million (virtually the same as in 2020) but with four (4) primary sources of revenue:
- $101 million: Seminars, Training, Conferences, and Other Program Revenue
- $ 84 million: Membership Dues
- $ 45 million: Investment Income, Royalties, Rental Income, Inventory Sales, and Gains on Sale of Assets
- $ 24 million: Local Council Assessments and National Eagle Association
Expenses totaled $359 million in 2021 (not including $7 million in depreciation) – $88 million more than the Boy Scouts raised – and can be categorized as follows:
- $122 million (45% of revenue): Bankruptcy Expenses
- $ 66 million (24% of revenue): Insurance Claims
- $ 58 million (22% of revenue): Compensation
- $ 55 million (20% of revenue): Insurance
- $ 22 million (8% of revenue): Travel and Conferences
- $ 21 million (8% of revenue): Office-Related Expenses
- $ 12 million (4% of revenue): Other Expenses (Dues, A&P, Interest, Etc)
- $ 2 million (1% of revenue): Fees for Services
- $ 1 million (less than 1% of revenue): Grants
Using the above information, every $100 in revenue was spent as follows:
-$ 20: Insurance
-$ 45: Bankruptcy Expenses
-$ 24: Insurance Claims
-$ 89: Subtotal: Insurance, Insurance Claims, and Bankruptcy Expenses
$ 11: Remaining Revenue
-$ 22: Compensation
-$ 8: Office-Related Expenses
-$ 4: Other, A/P, Interest, Payments to Affiliates
-$ 8: Travel and Conferences
-$ 1: Fees for Services and Grants
-$ 43: Subtotal Organization Expenses
-$132: Total Expenses
-$ 32: Amount Overspent
As illustrated above, 79% of revenue ($89 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 $132 out of every $100 received with the deficit covered by the net assets. At the beginning of the year, net assets were $350 million. After spending nearly $100 million more than the Boy Scouts collected, net assets were reduced to $255 million at year-end.
In summary, the Boy Scouts spent $132 for every $100 raised which in actual dollars amounted to nearly $100 million dollars more than the organization collected. Bankruptcy expenses, insurance claims, and insurance accounted for $89 out of every $100 spent. In essence, more revenue was spent on bankruptcy, insurance claims, and insurance than on Boy Scout programs.
To read the IRS Form 990 (2021), click here.