Archive for September, 2015

SPLC — Confederate Commodification

September 12, 2015

The recent controversy surrounding the Confederate flag merely adds more evidence to the theory that the Southern Poverty Law Center has yet to meet a tragedy it could not somehow spin into gold. While the company is sticking to its tried-and-true methods of appealing to its largely progressive donor base’s sympathies, this most recent marketing campaign is part of a bigger shake-up that has been in the works for the past few years.

In the aftermath of the mindless murders of nine people in Charleston in June, a media frenzy ensued demanding the removal of the Confederate flag from all public property across the country.

Naturally, the professional fundraisers at the SPLC saw an opportunity to appeal to their largely progressive donor base by hopping on the media bandwagon.

One of the savvier moves was to set up an online “Erasing Hate” hot-line where people can report sightings of the flag, schools and streets named after Confederates, etc., so that, in the words of SPLC founder Morris Dees, the company could “put pressure on” local governments.

It comes as little surprise, though, that there is no option to report the offending sites anonymously. Just as with the company’s cynical “Stand Strong Against Hate” map, the ultimate goal is to add the names and addresses of potential donors into its enormous fundraising database.

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Otherwise, you could have all kinds of anonymous practical jokers submitting the names of locations that couldn’t possibly be verified, except, maybe, by Google…

The SPLC doesn’t need “tipsters” to compile a comprehensive list of Confederate-themed locations any more than they would for a list of Winn-Dixie grocery stores or MoonPie distributors, but the list isn’t the point of the exercise.

While this kind of marketing ploy is pretty standard by SPLC standards, the company appears to be undergoing a major re-branding in the hopes of mining new sources of revenue.

Watching the Watchdogs has previously documented the collapse of the bloated Hate Map “hate group” count, which simply could no longer stand up to close inspection in the Age of the Internet. Someone in the Head Office, (we surmise it was Heidi Beirich), began an ambitious campaign to thin out some of the more obvious “hate group” padding, reducing the spurious count by 27% over the past few years.

The company has even redesigned the layout of their lucrative Hate Map to further obfuscate their spurious numbers, but they still have a lot of fat left to trim. For example, of the 22 alleged chapters of the Loyal White Knights of the Ku Klux Klan listed, only four are affiliated with a known city or town. The rest merely float about in limbo, padding the count.

Perhaps the most astounding move occurred early in 2014, when the SPLC actually dropped the descriptor “non-profit civil rights organization” from its website and fundraising materials. It now refers to itself as “an advocacy group.”

This is a huge sea change for the company, which would no doubt alienate it from many of its traditional, blue-haired donors, (which is possibly why the SPLC has neglected to publicly announce the change), but the benefits going forward are manifold.

By re-branding as an advocacy group, the SPLC no longer has to tie any of its actions to actual civil rights. Now they can freely pursue such cut-and-dried civil suits as the copyright infringement case involving a gay couple’s engagement photo. No civil rights were violated, or even mentioned in the complaint, but the SPLC was able to lend publicity to the case as part of its ham-fisted marketing campaign aimed at the LGBT market.

The recent Confederate flag flap apparently got someone in the SPLC’s Advancement Office (read: Fundraising) to think more proactively. “Instead of passively waiting for the donor-dollars to roll in, what can we actually sell people?”

The answer was brilliant. On September 10, 2015, the SPLC issued a press release stating:

“Singer-songwriter Steve Earle has partnered with the Southern Poverty Law Center to take a stand against the Confederate battle flag and is urging Mississippi to remove the emblem from its state flag with the release of his new song, “Mississippi It’s Time.”

No doubt the term “has partnered with” actually means “was commissioned by,” which accounts for the next line in the release, which is obviously the most telling:

“The song is available for streaming here and for download on iTunes beginning Friday, September 11. All proceeds will go to the SPLC.”

And there you have it. The SPLC has found the perfect way to commodify, that is, to turn a buck from, the Confederate flag controversy.

If this scheme pans out, you can expect more commissioned songs, to be followed by t-shirts, books, smartphone apps and video games. “All profits will go to the SPLC.”

As we pointed out a week ago, the SPLC posted a $12 million dollar “non-profit” last year, over and above the $22 million in tax-free interest generated by its $302 million dollar cash endowment fund.

The SPLC needs more funding like a Mississippi catfish needs ugly lessons.

It’s probably no coincidence that the company chose to release its product on September 11, as they seldom miss an opportunity to cash in on symbolism.

Speaking of symbolism, however, nowhere in the actual text of the press release, (though there is a photo of the album cover), does the SPLC mention the name of Mr. Earle’s band… the Dukes.

No doubt the fundraisers wanted to avoid any potential association with former KKK leader David Duke, or more likely, those other, hate-filled, Icons of Evil…

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Whatever the reason, we’re obviously witnessing a major change in the way in which the Southern Poverty Law Center makes money. This bears watching and we at Watching the Watchdogs are more than happy to do so.

Stay tuned, y’all…

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SPLC — Crunching the Numbers

September 11, 2015

As another summer winds down to a close, it’s always worthwhile to have a look at the Southern Poverty Law Center’s financial numbers and compare them to the company’s fundraising rhetoric.

According to the financial records for the most recent fiscal year, ending October 31, 2014, the SPLC reported total operating expenses of $42,414,311 against total annual revenues of $54,420,509, leaving a tidy “non-profit” of $12,006,198 when all was said and done.

Remember, friends, “non-profit” is a tax status, not a mission statement.

While the financial records on the web site are up-to-date, there are a couple of errors in the text that will, no doubt, be corrected in the near future. The most glaring error states that:

“At the end of the fiscal year, our endowment – a special, board-designated fund established to support our future work – stood at $245.3 million.”

That figure is three years old. According to the SPLC’s most recent IRS Form 990, the company’s endowment fund closed 2014 at a record-breaking $302,825,586 dollars (Page 26). In 2000, Ken Silverstein reported in Harper’s Magazine that SPLC founder Morris Dees at one time announced that the SPLC would cease all fundraising activities once the Endowment Fund reached $55 million dollars. As that target drew nigh, Mr. Dees doubled his bet, saying that he could “live off the interest” of a $100 million dollar endowment.

The Endowment Fund reached that number by 2002, and yet, the fundraising continued. Five years later, the $200 million dollar mark was reached in 2007 and yet, the fundraising continued. Maybe Mr. Dees was misquoted and really had $300 million in mind the whole time.

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Speaking of fundraising, the second error on the financial information page states: “During the last fiscal year, approximately 68% of our total expenses were spent on program services.”

Like everything else to do with the SPLC, that statement is up for interpretation. According to the Form 990, the company spent $13,032,973 “seeking justice by supporting victims of civil rights abuses and hate crimes,” and another $13,939,793 in support of the company’s “public information and education efforts,” for a total program services outlay of $26,972,766, (p. 3), which only adds up to 63% of total expenses for the year, not 68%

But wait… there’s more! 

According to page 2 of the Form 990, the SPLC spent $9,674,637 on fundraising for the year, or 23% of its budget, putting it near the low end of Charity Navigator’s optimal fundraising expenses chart. However, the SPLC’s own auditors note that the company “incurred joint costs of $8,056,407 for educational materials and activities as part of fundraising appeals during the year ended October 31, 2014.”

“Joint costs,” the auditors explain, are “Activities and the production of materials which combine development, education, and management functions are allocated to the program and supporting services on the basis of the content of the material, the reason for its distribution, and the audience to whom it is delivered.”

For example, SPLC “management” spent more than $1,500,000 dollars in printing and postage costs last year, over and above what the education and fundraising wings spent. That makes no sense whatsoever until you realize that “Management” was merely holding that expense for “Development,” (pronounced: “Fundraising”). They’re not lying about spending the money, they’re just not excessively truthful over who spent it.

In short, “joint costs” are fundraising costs that are allocated to program service expenses. As long as the fundraising appeal contains an “action element,” it can technically be called something else. For example, when you receive a note from the SPLC saying “Hate groups are on the rise everywhere! Your financial support will help us fight hate,” you have received “educational materials” and a not fundraising letter. Get it?

When you add up the SPLC’s declared fundraising costs and its “joint” fundraising costs you come up with $17,731,044 dollars, or 42% of total expenses, which blows it completely off Charity Navigator’s charts.

So, if you deduct that $17 million in fundraising costs from the company’s annual expenses, as Mr. Dees promised he would when the Endowment Fund reached $100 million, it cost just under $25 million to keep the SPLC’s doors open last year.

At that rate, the Endowment Fund could support all programs for 12 years without raising another dime, but that doesn’t include the $22 million in tax-free interest generated by the fund, which would cover nearly everything without touching the principle. With a little of the “stewardship” the financial page brags about, the SPLC could carry on indefinitely without ever asking for another red cent.

Don’t hold your breath.


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