Boys & Girls Clubs’ Funding Fate Unknown

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The fate of a proposed $465 million federal authorization for the Boys & Girls Clubs of America (BGCA) is as shrouded in secrecy as the ongoing inquiry into the nonprofit’s finances by four Republican senators.

Although Sens. Chuck Grassley (R-Iowa), Tom Coburn (R-Okla.), Jon Kyl (R-Ariz.) and John Cornyn (R-Texas) have pursued their investigation through a series of requests for information and a June meeting with officers and several board members, the dealings have been behind closed doors. While BGCA has said it posted two responses of more than 50 pages each on its website, details about most aspects of the senators’ questions are in extensive exhibits that were sent with those responses, and neither the BGCA nor the senators will release them.

Jan Still-Lindeman, spokeswoman for BGCA, said the exhibits are being withheld because they contain “proprietary information” and any additional information about BGCA could be gleaned from its federal tax returns. The most recent return available is for tax year 2008, which ended Dec. 31 of that year.

The senators’ attention is focused primarily on new BGCA clubs that were opened over the past decade to serve youths in public housing and other “distressed” locations throughout the country, and why many of them closed. They want to know why clubs in needy areas were shuttered when the national organization has a hefty endowment and pays its officers significant salaries, including almost $1 million for President Roxanne Spillett.

Questions about BGCA’s finances were first raised in January, immediately after the Senate Judiciary Committee had moved to the Senate floor the Boys & Girls Clubs Centennial Reauthorization Act of 2009 (S. 2924). The bill, which has yet to appear on the full Senate calendar, provides for an annual appropriation of $85 million for the organization’s general operating expenses for five years, with an emphasis on preventing school dropouts. Previous allocations to BGCA have been for expansion into more needy neighborhoods and for mentoring at-risk youth through a major Department of Justice grant.

Coburn has said the Senate bill is “going nowhere” until his questions are resolved.

 

Quiet after the storm

The senators’ initial questions for BGCA ignited a firestorm of controversy, but releases of information this summer – first by Grassley, then through BGCA’s Web posting of its responses – have prompted almost no reaction.

Except for an initial spate of TV interviews and public statements in March, the senators and BGCA have said little. BGCA has declined to answer anything associated with the Senate inquiry since it began, and has made no statements except for narrative responses to the senators that were posted on its website in late July. Senators and their associates have been just as close-mouthed.

In an internal memo to club professionals, Senior Vice President Evan McElroy Sr. warned that “while there has been little related media activity since March, we must be prepared for the possibility of another round of coverage.” He told the professionals they would receive additional information to respond to questions: “We are planning a proactive communications strategy. … We will send you additional information, and tools you can use locally, in the days ahead.”

The BGCA’s responses to the senators’ questions included extensive explanations about the history and worth of Boys & Girls Clubs, repeated comments about how “engaged” the board is and references to the unreleased exhibits that are said to detail the information the senators are seeking.

In those responses, the BGCA does not say exactly how many clubs have closed, noting that the number is “about 1,000.” It says 388 closed because they lost the space where they were operating, such as public housing, schools or military bases; 123 sites closed because of consolidation; 149 closed because they failed to meet the minimum requirements as Boys & Girls clubs, and 363 closed for lack of funding. The BGCA did not respond to questions about whether that total of 1,023 is all of the clubs that closed in the past decade.

Most of the detailed information about BGCA’s endowment and investments is also in the exhibits, although the organization said 51 percent of its endowment funds are restricted and cannot be used for general operating expenses, and that the national organization generated a total of $150 million for the clubs in 2009. BCGA said that funds in offshore accounts were invested at the behest of an independent adviser and were designed to generate more earnings because of their tax-exempt status.