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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
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