What would you think of a charity group that lost over 99% of its cash assets in one year? In 1998, the Shriners Hospitals for Children started the year with a cash asset balance of $354 million. By the end of the year, they were down by $351 million. They lost 99.1% of what they started with. If you had started the year with, say, $30,000, you’d have lost $29,730 and be left with only $270.
Let’s talk about money.
According to Guidestar.org, an online non profit resource, Shriners Hospitals for Children’s assets are valued at $9,500,000,000. That’s over $9.5 billion. Melissa Data also lists Shriners trusts and affiliated organizations whose assets are dedicated to Shriners hospitals. This adds up to $10,000,917,629 or over $10 billion dollars.
How can we wrap our heads around these numbers?
Let’s compare the $10 billion figure to the Gross National Product of some countries. The GNP is a measure of a country’s economic performance, or what its citizens produced like goods and services and whether they produced these items within its borders.
Angola has a GNP of $10.1 billion. Ivory Coast has a GNP of $10.1 billion. Tanzania has a GNP of $9.87 billion. The combined GNP of Afghanistan, $4.63 billion, and Zimbabwe, $5.53 billion, comes to $10.1 billion.
Let’s look at it another way.
If the Shriners assets were distributed per capita:
•Each of China’s 1.3 billion people would get $7.95.
•Each of the United States’ 298 million people would get $34.70.
•Each of the U.K.’s 60 million people would get $172.34.
•Each of Australia’s 20 million people would get $517.
•Each of Palau’s 20,500 people would get $504,428.
Guidestar also offers non profit financial data for the years 1998 to 2004. This is sorted according to what is taken in as revenue, what is spent as expenses and what is left over at the end of the year as net gain/loss. The data also tracks areas such as investments and cash assets.
Net Gains/Losses -
For the years 1998, 1999 and 2000, the Shriners Hospitals for Children had net gains of $233 million, $246 million and $317 million. The next three years, though, they lost a lot of money. In 2001, the Shriners lost or spent $183 million more than they took in. In 2002, they lost or spent $406 million more than what they took in. And in 2003, they lost or spent $40 million more than they took in.
For the years 1998 and 1999, the Shriners saw investment gains of $1.274 billion and $545 million. However, in 2000, they lost $234 million in investments. In 2001, they lost $614 million in investments. And in 2002, the Shriners lost nearly 16% of their investments, down by over a whopping $1+ billion dollars or $1,045,760,830. If you have a monthly income of $2,500, this would be like losing $430 a month or like losing $5,160 a year.
Cash Assets -
In 1998, the Shriners had a beginning cash balance of $354 million. By the end of the year, they lost over $351 million or 99.1% of what they started with. Again, if you started the year with $30,000 cash, you’d have lost $29,730 and be left with only $270. In 1999, they posted an $8 million cash gain. In 2000, they lost nearly $2.5 million in cash assets. In 2001, they lost $1.1 million. And in 2002, they lost $5.5 million in cash assets.
Why should anyone wrap their head around these numbers? Once the public understands these gains and losses, questions such as these can be asked:
•Why was so much money lost in 2000, 2001 and 2002?
•Why did 99.1% or $351 million in cash assets disappear in 1998?
•Why did cash assets disappear for four out of seven years and where did this money go?
•What caused the Shriners to overspend in 2001, 2002 and 2003?
•What happened in 2002 to cause Shriners to lose $1.1 billion in investments, to lose over $1.1
billion in the fund balance and to lose $5.5 million in their cash assets?
In this day and age, non profit transparency and accountability matter to the American public. A recent Harris poll revealed that 30% of Americans think that charity groups are headed in the wrong direction. This is why financial disclosure is so important. If it looks like a charity isn’t doing right by their volunteers and donors, they, and everyone else, has the right to know.
To their credit, the rank and file Shriners pay over $2 million a year in dues, volunteer their time and work hard to raise money to help support the hospitals that provide free medical care to sick and needy children. Many trusting donors include the Shriners in their wills to pass on their estates, establish trusts and make bequests to also support the much needed free medical services. Both the Shriners and the donors trust that their time, energy and donations will be well managed instead of mismanaged as some of the data seems to indicate.
The Shriners have been criticized by non profit watch dog groups such as Give.org and the American Institute of Philanthropy for “hoarding” more than three times their operating costs. This is a standard bench mark used by Give.org they include in their standards for charity accountability.
The Shriners are sitting on $9.5 billion. Plus that which is dedicated by the trusts. In 2004, their expenses for program services was reported as $456 million, so the Shriners assets are twenty times more than what is needed to operate their hospitals. For this reason, in 2004, KOBTV reported that the Shriners Hospitals for Children took second place on the world’s worst charity list.
Back to the importance of non profit groups making their finances public, especially when today, they can post their tax returns and associated financial documents online so everyone can see how they are managing their finances.
The Shriners do not do this.
Remember what Deep throat told Woodward and Bernstein.
Follow the money.
Especially if it looks like it’s going down the drain.
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