Monday, October 19, 2009

Caveat emptor

Are you getting what you pay for?

All you folks lining up with your open checkbooks to rub elbows with former President Bill Clinton at the Trenton First “fundraiser” might want to check this out first.

Seems the Trenton First initiative ran a $1300 deficit last year according to the report filed with the State of NJ Charitable Registration Directory.

While a non-profit running a loss in this economy is not such a big deal…and the loss is not a huge amount (about 3% of the reported operating budget) a look at the rest of the numbers tells an interesting story.

Trenton First reported $43, 280 in direct public contributions and $44,583.00 in total expenses. However, only a little more than $5,138.00 was spent on program expenses (the “good works” of the non-profit). That is only 12% of the operating budget spent delivering on the organization’s mission. The other 88% of expenses came in two chunks: $8,875 (20%) for management and a whopping $30,570 (68%) in fundraising expenses.

So remember folks, as you write your checks tomorrow night, only 12 cents of every dollar you give to Trenton First goes towards it alleged purpose. Twenty cents of each dollar you give goes to “management” and the rest goes to cover the costs of convincing you to hand over your hard-earned bucks.

Edited after posting to remove a broken link.

8 comments:

Guy on the canal said...

That's our mayor's administrative philosophy in a nut shell. No more needs be said..

Marc said...

A $50,000 budget hardly puts the foundation in a realm of being able to dump a lot of cash into programming. Now, if the annual budget was $500,000, 88% on administration would be criminal.

Old Mill Hill said...

We're not talking quantities here (at the moment) but ratios; the various line items (programming, management, fundraising) as a portion of the total budget.

Last we checked, the rule of thumb was a charity should be looking at no more than 25% of it's budget going for management plus fundraising. In the example provided here, the management portion is 20%.

You don't find that improper?

Marc said...

So, if the foundation had $5, you'd want to see $4 go to programming? If they spent all $5 trying to raise more funds that would be inappropriate to you?

The ratio rule of thumb doesn't work when you apply it to such a small budget. The birth of any nonprofit or foundation that doesn't start with a giant endowment is never pretty.

Old Mill Hill said...

If we were talking about a "new" foundation and the budget was exceedingly small, your assumption might be acceptable.

However, this "foundation" has been around for at least six years (and probably longer), so it does not count as a "start up."

And when you spend more than six times as much on fundraising as you do on programming, your ratios are out of balance. Similarly, considering the size of the organization and "volunteer" status of it's officers (Mr. Palmer's wife, Mr. Palmer's father, etc.), the management expenses seem to be out of whack as well.

Compare this to say, Corey Booker's Newark Now foundation. A seven digit budget with ratio's more in keeping with what the federal government and private funders look for.

Now, what do you think Tuesday's event is costing to put on?

Do you think President Clinton is speaking "gratis" out of some sorty of friendship with Mr. Palmer (we don't)?

Do you think the Marriott is putting on the spread for nothing?

It all points up to yet another one of the perpetual political scams being perpetrated on the public.

Marc said...

Six years really isn't that long. I'm still giving them startup status. Check the books over at MOCS and let me know what you find! You do raise a good point about the management fees though. They should be zero if there is no programming.

Old Mill Hill said...

I used the six year number because I have seen a copy of federal 990 form from 2003. My belief is that the foundation has been in existence for most if not all of Palmer's tenure as Mayor.

It is a fairly common setup, at least here in NJ. And I'm sure there are similar organizations with worse operating ratios.

Anonymous said...

The Joke Is On Us !
Trenton First (sick name) is just a phony front that provides funding for Palmer's Kool Aid Parties. This Clinton visit is really just a, "all expenses paid for" photo shoot for Palmer's re-election Liturature.