SPLC — Crunching the Numbers — 2018

Have you received a donation request from the Southern Poverty Law Center recently? Do you ever wonder how your donations are spent? Thanks to ProPublica, you can review the SPLC’s IRS Form 990 tax returns all the way back to 2001.

With the exception of 2009 and 2012, the company has always taken in significantly more money than was needed to keep the doors open. Some may recall that 2009 was the year after Bernie Madoff’s investment scam was exposed, costing investors and many nonprofit organizations billions of dollars in losses.

To date, there is no evidence that the SPLC was involved with Madoff. It seems that 2009 was simply a bad year all around.

Legal Case Costs 2000-2017

While the SPLC claims that “During the last fiscal year, approximately 68% of our total expenses were spent on program services,” a closer look at the numbers raises some questions to the accuracy of that statement.

One of the biggest red flags is the annual fundraising costs. Each year the SPLC declares a sum directly spent on fundraising outright for the year, $12,626,830 for 2017, as well as a sum spent on “joint costs.” These came to $12,147,345 last year.

The SPLC’s auditor describes “joint costs” as “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.”

In short, “joint costs” are fundraising costs (“development”) attributed to other departments. As the auditor notes: “The Center incurred joint costs of $12,147,345 for educational materials and activities as part of fund-raising appeals during the year ended October 31, 2017.”

For example, SPLC “Management” spent $1,022,000 on postage last year. Since the business of management is arguably to “manage” the company’s 302 employees, that works out nine pieces of first class mail to every employee every single day of FY 2017.

As the graphic above indicates, the SPLC spent 41% of its budget on outright fundraising and “joint costs” last year.

While joint costs accounting is not illegal, and is practiced by many of the largest nonprofits and charities in the country, it is ethically ambiguous, according to Charity Navigator, one of the leading industry watchdogs:

“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.”

The graphic also indicates that the Southern Poverty Law Center has never spent more than 6% of its budget on legal case costs this century (and only in one single year, at that), something that the average donor might find surprising, and possibly quite alarming.

After all, shouldn’t the main business of a law center be the practice of actual poverty law?

Mark Potok, the SPLC’s Intelligence Director for 20 years, explained this confusing situation several years ago:

In the 70’s … “poverty law” was actually the phrase … it was a phrase used that just applied to … essentially … civil rights law … to kind of human rights legal actions. I know a couple years ago there was a big discussion internally [at the SPLC], ‘Should we change our name to something else?’

People think, you know, that it’s all about, sort of, defending poor people, and that’s not really, exactly what our mission is. By that time, people knew the name so well that, you know, we made, I think, the obviously right decision not to change the name (Holiday, Track 1).

While the SPLC never did change its name, it did change its mission. In 2014, the company quietly removed the “non-profit civil rights organization” descriptor from its website, press releases and other fundraising materials,  replacing it with “civil rights advocacy group.”

While the two phrases sound similar, they are in no way the same thing. The National Rifle Association is an “advocacy group” for the gun lobby and few, if any, SPLC donors would ever accuse the NRA of being a “civil rights organization.”

It may be simple coincidence, but according to the graphic above, the SPLC has enjoyed some of its most profitable years since making the switch.

You can lead a horse to water, as they say, but putting the SPLC’s financial information in an easy-to-read graphic will probably do very little to dissuade the company’s millions of loyal donors, who believe they are getting great value for their money.

To them, getting the SPLC bumper sticker or lapel pin, or whatever thank you tchotchkies the company sends the faithful is what it’s all about.

Virtue signaling is far more important than doing actual work for civil rights.

Advertisements

Tags: , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: