Archive for January, 2015

The SPLC’s Sketchy Telemarketing Tricks

January 27, 2015

Southern Poverty Law Center founder Morris Dees claims on his company’s website that he is a sound financial steward of the millions of tax-free dollars his donors send him each year in the sincere belief that they are somehow “fighting hate” by doing so.

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Unbeknownst to tens of thousands of donors a year, however, is the fact that millions of their donation dollars never reach the SPLC’s coffers. Let’s look at the numbers:

First, the Good News: According to the SPLC’s tax returns, (shown below), over the past three fiscal years, third-party telemarketers raised $5,156,337 toward the SPLC’s worthy goal of “fighting hate” in America.

The Bad News: The SPLC actually paid $5,750,295 to the telemarketers over those three years, for a net loss of $593,958 donor-dollars!

One telemarketing firm, Grassroots Campaigns, of Boston, charged Mr. Dees an incredible $3,883,469 to raise $1,644,804, for an astonishing loss of $2,238,665.

Not only did Grassroots keep every dime they raised from well-meaning donors, they completely wiped out the $1,644,804 turned over to the SPLC by all of the other telemarketers combined AND scooped an additional $593,958 out of the existing SPLC donor pot!

The Other Good News: “Sound Steward” Morris Dees could not be happier with the results.

How can Mr. Dees condone this rampant hemorrhaging of desperately needed donor-dollars? To recycle the old vaudeville punchline: “He’ll make it up in volume.”

It’s simple. Dees isn’t hiring these telemarketers to “raise money” for the SPLC, regardless of what they say in their scripted telephone pitch. He’s paying them to identify new donors to feed into his own uber-efficient, in-house fundraising machine.

Think about it. As the SPLC’s IRS Schedule G returns indicate below, the measly $427,000 the SPLC received from the external telemarketers after expenses in 2010 represents a mere 1.3% of the $32 million Mr. Dees’ in-house fundraisers raked in that year.

That’s chump change, like a five-dollar bill you find in the pocket of a jacket you haven’t worn in a while.

The real money will come from future donations from these people over the coming years, of which the SPLC gets to keep 100%.

It’s a beautiful system when you think about it because it not only makes millions for the SPLC down the road, but it’s paid for entirely by the gullible donors themselves!

“Sound stewardship” doesn’t get any better than this.

The downside is that the tens of thousands of well-meaning donors who ponied up the $5.7 million donor-dollars to pay the telemarketers genuinely believed that their money was actually going toward “fighting hate,” rather than padding out Mr. Dees’ donor list.

To be fair, the SPLC isn’t the only one playing fast and loose with the donor-dollars. A 2012 news report in the Pittsburgh Tribune explains that even the best third party fundraisers only turn over about 45 cents on every dollar they raise but many others keep as much as 97% of the take.

Obviously, the donors have no idea how little of their money actually gets to the non-profits they support.

For smaller charities and non-profits even a paltry 3% return is better than nothing.

The Tribune article even interviews Grassroots’ own National Canvass Director, Wes Jones, who claims the donor-dollars paid to his company are justified because organizations like the SPLC are actually buying “a huge amount of visibility and new supportersand their contributions over the next few years will substantially exceed the cost of the effort.”
[Emphasis added]

Non-profits such as the ASPCA and Amnesty International are cited in the article as saying they were pleased with Grassroots’ work, even when it cost them millions out-of-pocket. They too are far more interested in the donor information Grassroots collects.

When you think about it, Morris Dees paid less than $600,000 for $5.1 million dollars worth of proven donor information. That’s less than 9 cents on the dollar. Not a bad return on investment, especially when it is the unwitting donors who are footing the bill and will continue to contribute for years or decades to come.

So how many trusting donors got absolutely nothing for their donations? At $100 apiece, which seems like an unusually high number for first-time donors, that “only” comes to 57,000 suckers. At $50 dollars a head, 114,000 donors were duped, and the more modest the donation the larger the number of people who were deceived.

The SPLC has a long history of making the most of Progressive altruism. Watching the Watchdogs reported back in 2009 on the SPLC’s laughable “Stand Strong Against Hate” map.

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In exchange for nothing more than your name, street and e-mail addresses, you too can “stand strong against hate.” In 2009, that personal information would earn you a digital pinhead on his map with your first name and last initial.

Mr. Dees doesn’t explain exactly how your personal information “fights hate,” but no doubt his formidable fundraising team makes very good use of the data and there’s nothing stopping them from selling it to other non-profits.

According to the map, thousands of Progressive pinheads have signed up for the cause.

It all sounds rather cynical to us.

So what do we make of Mr. Dees’ sketchy telemarketing deals? They’re not illegal, and apparently “everybody” in Non-Profit Land is doing it.

The donors are still getting a warm-and-fuzzy tingle and the fantasy that they are somehow “fighting hate,” which, after all, is pretty much all they would get if they delivered the money directly into Mr. Dees’ hands.

Maybe it’s a win-win-win situation after all.

Below are the SPLC’s telemarketing records from the past three available fiscal years. Look at the numbers for yourselves, do the math and come to your own conclusions as to whether the donors are getting a fair deal.

Fundraising2010

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Fundraising2011

Fundraising2012

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The Many (White) Faces of the SPLC

January 24, 2015

It’s always informative to peruse the Southern Poverty Law Center’s web site, as you never know what you’ll find. Here’s what the Senior Program Staff page of the Who We Are tab looks like:

Senior Staff1Senior Staff2Senior Staff3

We found it a bit odd that there were so many missing photos, as it sure left a lot of white space on the page. Just out of curiosity we simply Googled the names and found photos for everyone.

So here, in no particular order, are the missing faces of the SPLC’s Senior Program Staff, click on any image to enlarge it:

MissingStaff1MissingStaff2MissingStaff3

As it turns out, if the web designers at the SPLC actually had filled in all the missing photos there would still be a lot of white space on the page.

No doubt even the most die-hard donors would catch on if all of the photos were published.

Twenty-one of the SPLC’s Senior Staffers are white, or about 88% of the team. Seems a bit odd for “the nation’s leading civil rights organization,” especially since its headquarters are located LITERALLY in the back yard of Dr. Martin Luther King’s own Dexter Avenue Baptist Church in downtown Montgomery, Alabama, the birthplace of the American Civil Rights Movement.

When you account for the fact that four of the Senior Staffers, including two of the three blacks on the team, live out-of-state, the percentage of white staff in Montgomery jumps to 95%. The sole exception is Lecia Brooks, who works as a fundraiser. Ms. Brooks joined the SPLC in 2004 and has never broken into the ranks of highest paid officers, even when the list included salaries as paltry as $70,000 a year.

Still and all, as dismal as the diversity of the Senior Staff is, it’s better than the makeup of the SPLC’s executive officer team, which is composed 100% of white millionaires, just as it has been for every year since the SPLC opened for business in 1971.

Even the SPLC’s “Teaching Tolerance” program, which purports to promote diversity in the K-12 classroom, is led by whites, as it has been since its inception in 1991.

“Diversity,” like taxes, it seems, is for the little people. No hypocrisy here, SPLC.

SPLC — Feel the Love

January 22, 2015

Yesterday, the Southern Poverty Law Center re-posted a news item on its “Hatewatch” blog.

Man Described as ‘Doomsday Prepper’ Dies in Fiery Standoff with Police,” reads the lurid headline.

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The article describes a recent event where an apparently mentally unstable man allegedly went on a shooting spree from inside his mobile home after his girlfriend moved out on him earlier in the day.

Ted Lancer allegedly began shooting indiscriminately around 10:30 PM, police were called, and Lancer allegedly set his mobile home on fire and shot himself 45 minutes later.

A tragedy? Yes. A terrifying event for the neighborhood? Indisputably. A life-and-death situation for the police and other First Responders? Without a doubt.

A “hate incident” worthy of a place on the “Hatewatch” blog? Think about it.

There are no reports that Mr. Lancer made any racist remarks or threats against any groups, or that he was a Nazi, Skinhead or Klansman. His neighbors all appear to be white working class people in the news footage.

All we have is one neighbor claiming he was “a doomsday prepper,” which, if it is even true, is not a crime and certainly not a “hate crime.”

Another neighbor swears he heard “3,000 rounds of ammunition” cooking off in the subsequent fire. Shouldn’t law enforcement have an opportunity to examine the scene and present statements based on actual evidence?

“It’s not clear if the gunman, who was firing at his neighbors’ homes, actually fired at officers who responded, Michigan State Police Lt. Michael Dawson told Hatewatch.”

Despite author Bill Morlin’s hyperbolic claims of a “fiery siege,” it doesn’t look like the police even fired their weapons during the 45-minute standoff. They simply had to keep their heads down like everyone else until the fire consumed the last of the ammunition.

So where’s the “hate”?

We asked Mr. Morlin this question in the Comments section of his article, but apparently our post was found lacking by the moderators.

What’s really mind-blowing are the comments posted by the SPLC’s “anti-hate” preaching followers.

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At least one SPLC follower had the humanity to lament the loss of the man’s dog.

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According to the SPLC’s infamous “Hate Map” fundraising tool:

All hate groups have beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics.”

It seems pretty obvious to us that smarmy comments about “home-schooled” “chrischuns” are specifically designed malign entire classes of people, yet the moderators on the “Hatewatch” blog had no problem at all accepting this blatantly hate-filled vitriol.

Remember, every single comment on the blog is approved by the SPLC.

A sad, sick man is dead and, as usual, the fundraisers at the Southern Poverty Law Center want to peddle it to their “Progressive” donor base.

Vaya con dinero, SPLC. Whatever turns a dollar.

SPLC — Where the Money Goes, Part 2

January 5, 2015

As mentioned in an earlier post, the winter holidays have given us some downtime with which to reflect upon the Southern Poverty Law Center’s audited financial statements from 2006 to 2013. Having no accounting training beyond what we got as a college freshman years ago, we freely admit that spreadsheets, etc., are not our strong point, and so we ask our readers to look at the numbers and see what they think.

Is there a CPA in the house?

Obtaining the SPLC’s financial information is simple enough, as we described at the end of that previous post. Interpreting the numbers is the tricky part.

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Above is a breakdown of SPLC expenses through the end of Fiscal Year 2013. With the help of the Internet Archive’s cantankerous Wayback Machine, we were able to obtain the same information going back to 2006, and it is only after one compiles the numbers that patterns, and questions, begin to emerge.

For example, below is a compilation of postage costs claimed by the SPLC over the eight year period and using the same headings as the audited report.

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Looking at the numbers for 2013 in particular, we can almost justify Development (Read: “Fundraising”) spending the better part of a million dollars on postage, because many of the SPLC’s mostly elderly donors still prefer snail-mail, but we’re having a really tough time understanding how Legal Services could rack up more than $400,000 in postage, and that’s down $80 grand from the previous year! Have they never heard of e-mail?

And that $400k is just a little more than half of what Management spent in postage last year! Is the management of the SPLC still using stone tablets to communicate? What gives?

Given the high labor costs associated with producing hieroglyphics and cuneiform, that might explain the SPLC’s printing expenses.

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According to this, Management actually outspent both Legal Services and Fundraising, respectively, on printing costs. What the heck are the all-white managers at the SPLC printing with all of those tax-free donor dollars? And what, for that matter, is Legal Services printing to the tune of $422,000 dollars?

The SPLC doesn’t charge their clients for services rendered, so it can’t be for billing.

To make things even more confusing, Printing costs are a completely different category from Lettershop expenses?

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Finally, we see Fundraising, er, Development, getting the lion’s share.

“Well,” you might say, “Hate is on the rise and these are necessary expenses. Plus, it takes money to make money, so Development needs to spend these donor-dollars on fundraising.”

Business must be booming at the SPLC, which has nearly doubled in size since 2006, from 139 employees to 271 on the payroll in 2013, according to the IRS Form 990s.

If salaries are any indication of where the job growth occurred, it would have to be in the Legal Services sector, whose payroll jumped by a whopping 123% since 2006, compared to a rather anemic 39% for Fundraising.

Such an unprecedented bolstering of the legal team can only mean that the dedicated lawyers of the Southern Poverty Law Center are slogging it out in the courts more than ever, right?

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Oddly enough, Legal Case Costs have pretty much remained flat for the past eight years, as shown above, despite the more than doubling of Legal Services salaries.

So where is all that money going? How can SPLC Management justify $779,000 for postage in 2013?

At current First Class postage rates that would work out about 30,580 letters every week, and you know that the SPLC gets a greatly reduced nonprofit postage rate. Who could they possibly be writing to?

As with most SPLC mysteries, the answer is fairly simple.

The only plausible explanation is that the bookkeepers at the SPLC are probably engaging in an old accounting technique known as Joint Costs Allocation.

According to the American Institute of Certified Public Accountants (AICPA):

“[Joint Costs Allocation] focuses on expenses associated with certain joint activities, which in part serve a fund-raising function, but also have elements of program services or operations.

For instance, the expenses associated with an educational mailing that also includes an appeal for donations might be jointly allocated between program services and fundraising expenses.” [Emphasis added]

How does it work?

“Joint costs allocation is unfortunately an area where NPOs [Nonprofit Organizations] sometimes use questionable financial practices, such as arbitrarily dividing up and spreading most or all of their actual fundraising and/or operations costs in their financial reports among their various program services in order to make it appear that they have very low fundraising and overhead costs.” [Emphasis added]

And what’s the problem with it?

“That contrasts with legitimate accounting procedures for accurately assigning a particular program service (or fund or grant) its true share of the operations and overhead costs.” [Emphasis added]

And here’s what the American Institute of Philanthropy’s Charity Watch has to say about the procedure:

“In nonprofit financial reporting, the funds spent on telemarketing, direct mail, or other solicitation activities that also include an “action step” or “call to action” are referred to as “Joint Costs.” Charities often use joint costs as a way of inflating their reported charitable program spending and deflating their reported fundraising costs. [Emphasis added]

Although the use of this accounting “trick” is often perfectly in line with the accounting rules for the reporting of joint solicitation costs (AICPA SOP 98-2), these rules allow for many interpretations and judgments that can produce questionable results.[Emphasis added]

Questionable results. Perfectly legal. Inherently scuzzy.  Remember this the next time you write a check out to the SPLC.

You think this is a one-off aberration? Check out what the SPLC claims for “Office Equipment” expenses versus Legal Case Costs to see where your donor dollars really go.

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To those of you who believe your donor-dollars actually go toward “fighting hate” and “civil rights” law we only ask that if you have any legitimate explanation for the bizarre numbers we’ve cited, please share them with us.

If an average of $898,000 a year for office equipment and $711,000 for Management postage costs sound like legitimate expenses, we’d like to hear from you. As always, we remind our readers to never take our word for it. Look at the SPLC’s own documents and come to your own conclusions, and please share them with us.

If the Southern Poverty Law Center is actively obfuscating on such primary documents as their own audited financial reports, what else can they be “exaggerating”? You tell us.

UPDATE – 1/12/2015: In addition to exposing the SPLC’s all-white Executive Suite and Teaching Tolerance’s all-white leadership, Ken Silverstein’s landmark article in the November, 2000, Harper’s Magazine, “The Church of Morris Dees,” also noted the SPLC’s fast and loose fundraising figures.

You can find the full-text of “The Church of Morris Dees” on our home page. Just click the “Watching the Watchdogs” banner at the top of this page.

“In response to lobbying by charities, the American Institute of Certified Public Accountants in 1987 began allowing nonprofits to count part of their fundraising costs as “educational” so long as their solicitations contained an informational component.

On average, the SPLC classifies an estimated 4 7 percent of the fund-raising letters that it sends out every year as educational, including many that do little more than instruct potential donors on the many evils of “militant right-wing extremists” and the many splendid virtues of Morris Dees.

According to tax documents, of the $10.8 million in educational spending the SPLC reported in 1999, $4 million went to solicitations. Another $2.4 million paid for stamps.”

Book Review: “For the Kingdom and the Power”

January 3, 2015

We recently had the opportunity to read Dale Laackman’s debut book, For the Kingdom and the Power: The Big Money Swindle that Spread Hate Across America (June, 2014, S. Woodhouse Books), which deals with the phenomenal growth of the “new” Ku Klux Klan in America during the 1920s.

Two things drew our attention to this title. First was Mr. Laackman’s recent appearance on CSPAN’s “Book TV” and the second was a glowing endorsement by the Southern Poverty Law Center’s own PR Guru, Mark Potok, which appears on the Amazon.com link cited above.

Most of us have seen dated photos of thousands of Klansmen marching through Washington, DC, in  1925, and read about a Klan membership in the millions during that time, but Mr. Laackman goes beyond the simple knee-jerk visuals and gives a more in-depth review of the actual events on the ground.

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The opening line of Laackman’s book reads: “This is not a book about the Klan,” and indeed, it is not. This is a book about a pair of shrewd Public Relations experts who saw an opportunity to glom onto a growing movement and make a ton of money, regardless of the racist messages and criminal activities committed by many of that group’s members.

The Modern Ku Klux Klan was founded in Georgia in 1915 by one William Joseph Simmons, who described his group as a modern day successor to the organization created by Nathan Beford Forrest immediately after the Civil War. Forrest’s Klan was designed to terrorize blacks and deny them their civil rights by any expedient means, including murder. Simmons’ Klan wrapped itself in a patina of honor, duty and patriotism, and sought to continue Forrest’s war on blacks, as well as Jews, Catholics and all other “aliens.”

Simmons created his organization completely from scratch, including the bylaws, rules and rituals for the governance of each Klan unit. What Simmons possessed in creativity, however, he completely lacked in business acumen. By 1920, Simmons was nearly broke and membership in his KKK was somewhere in the 3,000 range.

Enter Edward Young Clarke and Elizabeth “Bessie” Tyler, two natural-born promoters who had recently joined forces to create their own, rather successful Southern Publicity Association in Atlanta. Tyler’s son-in-law had joined the Klan and had mentioned Simmon’s business difficulties to Clarke and Tyler, who immediately saw an opportunity to apply modern public relations techniques and skim off a large slice of the profits for themselves. They met with Simmons and struck a deal whereby the Southern Publicity Association would undertake the promotion of the KKK in exchange for 80% of all new member fees. To Simmons, who was on the verge of losing everything for which he had worked, even a paltry $2 dollars a head for new members sounded like the deal of a lifetime.

To make a long story short, the PR partners produced amazing results almost immediately. Within a year, Klan membership had swelled to over a million and would peak at nearly 5 million three years later. The movement had spread far beyond the South into all corners of the country and boasted important members from local police and government officials to governors, congressmen and senators. Clarke and Tyler became fabulously wealthy overnight, not only from membership fees but from a monopoly on the production of Klan regalia and supplies.

Laackman provides key insights into the popularity of the Klan, especially in the early 1920s, when membership in all kinds of fraternal organizations was at an all time high. It is important to remember that these groups, including the Elks, Freemasons, Odd Fellows, Knights of Pythias, Eagles, Moose, Ruritans, Grange, etc., served as important networks in the days long before Linkdin and Facebook. These groups provided a venue for men to meet and interact in ways that they rarely would in the course of their day-to-day careers and lives. They all promoted patriotism and religious values, as well as the advantages of the Capitalist way of life.

Most of the members of the new Klan held membership in more than one fraternal organization, and most were unaware of the violence underlying this latest group. To most, the Ku Klux Klan was just another organization, as shown by the equally rapid decline in membership after a series of highly publicized newspapers stories broke on the criminal and financial workings of the Klan, especially the roles played by Clarke and Tyler. Laackman gives membership numbers of 3,000 in 1920, 5,000,000 by 1925, back down to 5,000 by 1930.

While some, like the SPLC’s Potok, point in their fundraising propaganda to the Klan’s peak membership in 1925 as proof positive of the natural racism inherent in all white Protestant men, the numbers show that most of the membership did not agree with the Klan’s violent tendencies and abandoned the group as quickly as they had joined.

We won’t give away the fascinating details of this rapid rise and fall, or the many intrigues surrounding the key players. Laackman’s book does a very good job describing the events and is worth the read. We recommend it.

The one complaint we do have with For the Kingdom and the Power is a tendency to be unnecessarily verbose in sections, which often have only tangential connections to the main story.

For example, no recounting of the modern KKK would be complete without mentioning the famous/infamous 1915 film, Birth of a Nation, which painted the original Klan in an extremely favorable light. Laackman gives a good accounting of the film, including its use of many groundbreaking cinematic techniques, but not before giving us two paragraphs on Thomas Edison’s invention of the film camera and projector, followed by two pages on the early life of director D.W. Griffith.

A discussion of anti-Catholicism in 20th century America is preceded by a chapter on Henry VIII, Anne Boleyn  and the Reformation.

In recounting the life of Bessie Tyler, Laackman gives us the address of the home where she was born, as cited by the US Census Bureau (“Militia District 469, Cooks (east part), Fulton, Georgia, enumeration district 0028, household ID-114”). Even in historical non-fiction there is such a thing as too much information.

In these cases, we suspect the padding has less to do with any pedantic inclinations on the part of the author and more to do with a minimum page or word count requirement set by the publisher. It is a minor irritant in the course of the book as a whole.

Another fascinating aspect of the book is how easily one could take Laackman’s recounting of the PR techniques practiced by the Southern Publicity Association in promoting the savagely racist KKK and compare them to those used by alleged anti-racist organizations today.

It’s little wonder that the SPLC’s Mark Potok calls For the Kingdom and the Power “a splendid book,” noting that “Dale Laackman shows how the group’s exponential growth was driven almost entirely by an unlikely pair of public relations experts who turned out to be consummate swindlers.” Mr. Potok, no doubt, recognizes many of his organization’s own PR ploys in the course of the text.

If Mr. Laackman is looking for material for his next splendid tome, we can provide him with a trove of data on how groups like the Southern Poverty Law Center and the Center for the Study of Hate and Extremism routinely exploit the fears of good people to further their own aims.

Given that Mr. Laackman has received an endorsement from Mr. Potok, and has cited the SPLC’s dubious numbers in his first book, the odds of such a follow-up tale are remote at best.

If you change your mind, Mr. Laackman, you know how to reach us!


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