8 A SIUSLAW NEWS ❚ WEDNESDAY, FEBRUARY 14, 2018 Boys & Girls from 7A This uncertainty could make those who donate skittish, partic- ularly those whose primary income relies on the stock mar- ket, namely retirees, a large demographic of the Siuslaw region. And while BGC has seen unprecedented giving in the past few years, statistically, it’s not the norm. The Great Recession of the 2000s has made individuals reti- cent to donate. As reported by The Atlantic in 2016, Texas A&M University released a study showing that people are donating a smaller portion of their income than they did before the recession. Between 2000 and 2008, charitable giving increased annually by one or two percentage points until 2008, when the market crashed, and donations understandably dried up. But by 2012, when the econ- omy was beginning to see a par- tial recovery, donations were still falling, declining by six percent- age points compared to 2000. “It could be that the uncertain- ty from the recession has had a lingering effect,” the article stat- ed. “Giving tends to be habit forming.” The article pointed out that the Great Depression of the 1930s made people more frugal long after the economy had recovered. Because of these reasons, BGC, along with other nonprofits in the region, could see a consid- erable drop in donations this year. This is particularly difficult with such a small donor base. “There’s so much competition in this town for the dollars from sponsors,” Kinney said. “And we have some fantastic sponsors, but we just want to be careful we don’t go after them over and over again. That’s a big concern.” The club is already seeing this come into play. Rolling in cash During last year’s annual Fraudville fundraising event, an evening where members of the community engage in a lip sync battle, the bottom line was boost- ed by a generous matching grant from John Hardison. “Last year we were challenged to bring Fraudville from $26,000 the previous year up to $35,000,” Pearson said. “If we could bring it up to $35,000, they would match it. And that’s what we did. So Fraudville last year was $70,000.” But this year, nobody has offered a matching grant. “Nobody’s putting up an extra $35,000,” Pearson said. “So, we expect $25,000 from Fraudville, compared to $70,000, which we won’t be having from last year from that one event.” According to Davis, the matching grant was unexpected, and it helped save the club finan- cially that year. It had been plan- ning a shortfall in funds by the end of the year. As of right now, the club is in the same position — it’s down $40,000, an amount the board hopes to raise throughout the year. This is not to say that the board feels that Fraudville, which is held every February, is a failure. Year over year, the club’s fundraisers have seen an increase in donations. “Without the continued sup- port of our many sponsors who continue to help us with smaller donations, we could not exist,” Kinney said. Traditionally, nonprofit rev- enue primarily relies on earned income, i.e. selling services or, in the case of BGC, program fees. Last week, financial website The Balance reported that 70-75 percent of nonprofit revenue comes from earned income, with the remaining coming from char- itable giving or grants. But the BGC’s income model is the complete opposite of the norm. The club’s 2016 statement showed a total of $683,806 in support, revenues and program receipts were received. Of that, only $72,510 was received through program fees. The rest of the money came though grants, contributions, special events and miscellaneous. Davis described how the pro- gram fees break down: The cost to provide services averages almost $1,500 per stu- dent, per year, he reported. The membership fee for the entire year is $25 per month. The charge for the school year pro- gram is $25 per month ($1.25 per day) for elementary students. For the Teen Center, it’s $25 a month and an additional $50 per year. But only a small percentage of these costs go to traditional oper- ational costs like payroll. Instead, the money goes to amenities that are given to the students, like art supplies or the daily meals that each student receives. In addition, many of the youth can’t afford the tuition. Instead, they’re funded by scholarships, which in turn are funded by dona- tions. When donations go to scholarships, they don’t go to unrestricted funds like payroll and utilities. Another major problem the club is going through is the per- ception that the club is “rolling in cash.” The board stated the club works hard to recognize those who give, but by doing so, the board fears it may have given the impression that the organization is not in need of funds. “It’s a double-edged sword,” Pearson said. “You talk about how much money that has been given, and people say ‘Ah, they don’t need my money.’ But yet, it’s an ongoing thing. You’ve got these expenses continually. In order to be sustainable, you’ve got to have continual income.” For example, much has been said about the generous donations of John and Patricia Hardison, Nan Osborne and others when the club was revisioning its place in the community. Close to $800,000 was given to the pro- gram during that period. But the club was $120,000 in debt and owed $30,000 in back taxes. Another large portion of the donations went to moving QCCF. $70,000 was put aside for operational costs, but that was used up last year. The majority of those funds, around $444,000, went to perma- nently restricted funds that help bankroll operational funds and scholarships. $357,000 was placed into an account that would fund opera- tional costs, like payroll, for the rest of the club’s existence. But the money cannot be touched, only the interest it accrues. At 4.5 percent interest, the account pulls in $16,000 annually. “On paper, we look great,” Davis said. “We have $357,000 sitting there, but we can’t touch it, except once a year we get a divi- dend check from it. Those funds are not ours. We couldn’t access those funds if the club fell apart tomorrow.” The rest of the money is set aside for a scholarship fund that generates $4,000 a year through interest. The 2016 financial statement shows high income because the club received a number of contri- butions to help the program get on its feet. In fact, $544,934 was given to the club through charita- ble donations, much of which was placed in restricted funds. For unrestricted funds, the 2016 report stated a total of $205,757 was generated. The majority of that was received through contributions, fundrais- ers, grants and miscellaneous: $133,247. The board also points out that the club receives little financial help from the national Boys and Girls Club foundation. Local club organizations are akin to fast food franchises. While Boys and Girls Club helps with name recogni- tion, training, regulations and program guidelines, the organiza- tion does not provide funding. Local clubs are tasked with find- ing funding on their own. itself off contributions. While the community quickly rallied around the club, organiza- tions like the Ford Family Foundation and United Way, which could help fund opera- tional costs like payroll, are only recently getting on board since the club found its financial foot- ing. “They’re not in the business of bailing out programs,” Davis said. “They want to build things.” But since the club has built up its programs and reputation, BGC has been able to begin cultivating relationships with donors, most recently with United Way, which provided several volunteers to help with landscaping. But these relationships take time to build and, as of now, the club has yet to find permanent funding through these organiza- tions. Another way the club is look- ing to raise funds is through planned giving. “Planned giving is an opportu- nity to bequest or leave in their will a part of their estate to the club, whether it’s an insurance policy, whether it’s part of their assets, whether it’s stocks or bonds,” Davis said. “They are planning ahead to give this to the club once their gone.” “We have 10 percent of what we need in restricted funds to be self-sufficient right now,” Nivilinszky said. “The more peo- ple we get continually contribut- ing, ten years from now we could potentially say this club doesn’t need that help anymore.” But planned giving takes time to reap the benefits. For example, if an individual decides to will their estate to the program, the funds won’t be released to the club until the individual passes away. If the individual requests the estate be placed into a perma- nently restricted endowment, like the Hardisons, it could take a year for the funds to appreciate inter- est to be released to the club. However, BGC has only recently been making a push for planned giving, the benefits of which won’t be seen for some time. While the club is currently developing long-term solutions like planned giving, reliable short-term funding is still an ongoing challenge to the club, according to Davis. The financial uncertainty that the BGC faces is not unique to the club. Recent stories of social service nonprofits show that these programs constantly walk a tightrope between staying open and insolvency. But as economic and political winds begin to change, these programs may find themselves in a more precarious situation, which is particularly difficult for programs like the Boys and Girls Club, which the board feels is only now hitting its stride. The club’s next big fundrais- er, Fraudville, will be held on Saturday, Feb. 24, at 6 p.m. at Three Rivers Casino Resort. For more information, visit threeriverscasino.com/events. in Our Community. Thank You. www.edwardjones.com Member SIPC Planned giving The club is working to wean Buying or Selling? I can help. Tim Sapp Owner / Principal Broker 541 999-8230 85158 Hemlock St – End of the road pri- vacy on almost half an acre! 2 bdrm, 2 bath home with an open fl oor plan and a wood stove. 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