Tuesday, November 12, 2013

Finances at the Scouts

It is hard not to notice the different ways the Girl Scouts of America and the Boy Scouts of America are viewed publicly.  Much has been written about the financial woes at the Girl Scouts.  While the Boy Scouts face their own controversies outside of the financial realm, their financial situation seems far less dire.  There is good reason for this – the Boy Scouts routinely outperform the Girl Scouts in terms of financial performance, despite  their similar sizes (approx. 2.3 million Girl Scouts compared to approx. 2.6 million Boy Scouts).  The last two years are instructive:

Annual Change in Net Assets
The interesting thing about this is that people routinely chalk the Girl Scouts woes up as being due to inefficiency, waste, and recent membership declines.  As it turns out, the difference between the performance among the two organizations is more about performance in the past than it is the present.

Comparing their most recent financial statements, the Girl Scouts of America pays salaries and benefits that amount to $14.83 per member, whereas the figure for the Boy Scouts is $28.39.  In terms of total expenses, the Girl Scouts' expenses amount to $37.72 per member, whereas the cost for the Boy Scouts is $81.69 (these reflect the national office financials and exclude contributed advertising).  In other words, it's hard to paint the Girl Scouts problems as being solely rooted in waste and excess.

Revenues, on the other hand, lag substantially for the Girl Scouts.  As seen below, profit from sales is the only item  for which the two are comparable (thanks to the ever-present Girl Scout cookies).

Revenues per Member (2012)
One thing that can explain the difference is if the Boy Scouts has more centralized financials (leaving less money and discretion to local chapters) or if they just do more per member.  Since the national office per-member expenses for the Boy Scouts are roughly twice that of the Girl Scouts, we may not be surprised to see that fees and contributions recognized by the national office are also roughly twice that amount.  The most glaring difference, though, is in the investments, where the Boy Scouts recognize almost five times the investment returns per member as the Girl Scouts.  In other words, it may be that the primary reason the Girl Scouts are facing financial troubles that the Boy Scouts seem to be avoiding is that the Boy Scouts have an investment pool that permits a substantial cushion.  This is underscored by the fact that the net assets per member are $54.54 for the Girl Scouts and $333.61 for the Boy Scouts.

Thus, the issue may not be that the Girl Scouts have been notably inefficient in recent years, but they have not had the good fortune of stockpiling a financial cushion over many previous years.  Why they were unable or unwilling to build a financial cushion over the years, then, is a key question.

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