A Letter From Our Chairman Emeritus: March 2010
A Message from Robbie Bach, Chairman Emeritus of the Board, Boys & Girls Clubs of America

To our donors, supporters, volunteers and employees:

In relation to a proposed reauthorization of federal funds for Boys & Girls Clubs of America (BGCA), a request was made by four U.S. senators for additional information about the organization’s operational policies and expenditures. While BGCA looks forward to responding to this request, in light of recent news reports, I believe it is vitally important that the facts are available and understood by all stakeholders and constituents of Boys & Girls Clubs. I want all of you to know that BGCA is an exceptionally well run organization, both nationally and locally, and I am very confident that your time, money, and commitment to the organization and its mission are well managed.

BGCA is an effective and efficiently-run organization. In 2008, 83 percent of BGCA’s expenses were used to provide programs and services to local Clubs. The organization has been cited by Forbes, Newsweek, SmartMoney, and U.S. News & World Report as a leading charitable organization based on societal impact and efficient use of donor dollars.

BGCA is a responsible steward of donor dollars, including federal grants. Of the $41 million in federal grants received in 2008, 91 percent was passed through directly to local Clubs to provide services to children. The rest was used for grant administration and compliance with all federal regulations.

The national organization is focused on the needs of local Clubs. Every Boys & Girls Club organization is locally managed. When economic times are challenging, sometimes difficult decisions must be made locally to reallocate Club services or, as last resort, close a unit. Last year, BGCA worked with local affiliates to prevent 120 local Club units from closing, and despite the economic climate, saw 80 new sites established.

BGCA has a competitive, equitable compensation policy. The Board of Governors seeks to attract the most capable talent to achieve our vital mission. The organization’s salaries and expenses are in line with similar organizations in the nonprofit sector. This is confirmed by independent third-party experts, including Mercer Incorporated, who recently completed the review and analysis of BGCA’s current CEO compensation. Her compensation is regularly reviewed by external consultants and continues to be comparable to the total compensation of other large, complex nonprofits. The CEO has not received a base salary increase since 2006 and none of her salary is funded from government sources. Our President and CEO Roxanne Spillett is an extraordinary leader who has dedicated 32 years to BGCA and serving America’s youth.

On a personal note, as a longtime local Board member for the Boys & Girls Clubs of Bellevue, Washington, I can directly attest to the value the national organization brings to its local affiliates. The services that BGCA provides are unparalleled in the nonprofit sector, enabling local Clubs to maximize their impact on the lives of the young people they serve.

As (past) chairman of the national Board of Governors, I speak for the entire board in pledging our ongoing commitment to ensuring that Boys & Girls Clubs of America continues to earn the trust and support of its many friends and constituents.

If you have thoughts or comments, please feel free to reach me at chairman@bgca.org.

Sincerely,

Robbie Bach

Chairman Emeritus
Boys & Girls Clubs of America

Important Information

Boys & Girls Clubs of America:
Saving Lives and Responsibly Stewarding Donor Dollars
For More Than a Century

We are very proud of our impact on America’s youth. Today some 4,000 Boys & Girls Clubs serve more than 4 million young people throughout the country and on U.S. military installations worldwide.

For more than 100 years, Boys & Girls Clubs have changed and saved young lives. We provide young people 6-18 years old with guidance-oriented character development programs conducted by some 51,000 trained, professional staff. More than 200,000 board and youth development volunteers provide vital financial and program support. Key programs emphasize leadership development; education and career exploration; community service; technology training; financial literacy; health and life skills; the arts; sports, fitness and recreation; and family outreach.

The number of Clubs, as well as the revenue generated in support of Boys & Girls Clubs, has doubled in scope during the past decade.

Since 1995, Club sites grew from some 1,800 to 4,000 today, while the annual number of youth served expanded from 2.4 million to more than 4 million. To support this tremendous level of service, the Boys & Girls Clubs (national and local) combined budget for 2008 totaled $1.4 billion, which was made possible by the generous support of individuals, corporations, foundations and government programs.

We operate effectively and efficiently, and have been consistently recognized for our performance.

In 2008, 83 percent of BGCA's national organization expenses were used to provide programs and services to local Clubs. For the 15th consecutive year, BGCA was ranked the number one youth organization by The Chronicle of Philanthropy, based on private sector support. BGCA is accredited by the BBB Wise Giving Alliance, and has been cited by Forbes, Newsweek, SmartMoney and U.S. News & World Report as a leading charitable organization based on societal impact and efficient use of donor dollars.

The national organization provides vital services to its local affiliates, and creates tremendous value for Clubs in both financial and in-kind support.

Local Boys & Girls Clubs are independent 501(c)(3) organizations governed by local Boards of Directors and led by local professional staff.

BGCA, the national organization, provides training and resources to local Clubs in areas such as fundraising, board leadership, youth development programs, child safety, executive leadership, marketing, facility design, financial management and outcome measurement and evaluation.

In 2008, BGCA generated more than $166 million in financial support for local Clubs -- $58 million in federal and private sector support; $81 million in state funding; and $27 million in planned gift expectancies. When other services are added, such as IT equipment and support, BGCA generated $179 million in value for Clubs.

Local Clubs are required to pay extremely modest dues to belong to BGCA (from less than one-half percent to 1.25 percent of their annual budgets). The return-on-investment (funds received vs. dues paid) for our local affiliates in 2009 was better than 23-1.

Support for BGCA from the public and private sector is vital to the continued ability to serve kids and change their futures. In a Harris Survey of alumni, 57 percent said the Club saved their lives. 28 percent say they would not have graduated from high school without the help of their Club.

Throughout our history BGCA has always been a responsible steward of donor dollars. Since BGCA began receiving federal funds in 1996, we have more than doubled the number of Clubs, serving millions of children most in need of our programs and services, with an emphasis on severely distressed areas such as public housing and Native American lands. We have fully complied with all government rules, regulations and requirements pertaining to this funding.

Setting the Record Straight

Here are the facts on several items mentioned in recent reports.

1. CEO Compensation
Roxanne Spillett has served on the professional staff of Boys & Girls Clubs of America for 32 years. During the past 14 years, under her distinguished leadership as President/CEO, Clubs have doubled in scope and reach. Ms. Spillett spearheaded outreach to children in public housing and Native American lands. She initiated the unique partnership with the Department of Defense, chartering Clubs on more than 470 U.S. military bases worldwide. Under her leadership, BGCA has raised hundreds of millions of dollars to support Boys & Girls Clubs. What can never be fully quantified is the success of the Clubs in providing a safe and nurturing environment, keeping youth in school and out of the justice system, and saving and changing lives.

Regarding Ms. Spillett’s compensation:

  • For 2008, her W-2 base salary totaled $360,774. Her base salary has not changed since 2006.
  • She was also eligible for, and earned, a non-guaranteed performance-based bonus of $150,000. This incentive is determined by the board and is contingent on Ms. Spillett’s overall performance as CEO.
  • Totaling these items, and adding in pension contributions and benefits, Ms. Spillett’s annual income for 2008 was $593,926.
  • In addition, contributions to deferred retirement plans of $385,500 (not current income, but amounts to be paid in the future) and payment of nontaxable group health benefits of $9,165 were made on Ms. Spillett’s behalf, totaling $394,665. Because Ms. Spillett’s retirement was underfunded for many years, the Board called for higher contribution amounts for 2006-2011.
  • Not a single dollar of government funding has been used to compensate Ms. Spillett.

The total amount of compensation is determined, in full accordance with IRS guidelines for nonprofit organizations, by BGCA's Board of Governors, through the Human Resources Committee (an independent body of the board; Ms. Spillett is not a member). The committee engages a nationally-known independent compensation firm, Mercer Incorporated, to assess the marketplace thoroughly to determine comparable compensation practices, "peer comparison" data, and other related trends in the nonprofit sector. According to Mercer, when measured against the compensation and benefits paid to peer executives at similar large, complex national nonprofits, Ms. Spillett’s compensation is in line with the industry, and appropriate.

2. Use of Federal Funds
In 2008, BGCA (the national organization) received $41 million in federal dollars, 91 percent of which was passed through directly to local Clubs. The remainder was used by BGCA to monitor these local grants and comply with all federal accounting and reporting requirements. No portion of these funds was used for CEO or other executive compensation.

3. Travel and Meeting Expenses
BGCA’s annual travel budget, which is scrupulously monitored, funds all travel for some 350 national staff, many of whom provide in-person services to the 4,000 local Clubs, including training, program development, and technical support, on a year-round basis. BGCA policy mandates that staff travel in the most economically efficient means possible. The travel budget represents 3.6 percent of the national organization’s total annual expenditures.

The budget for conferences and meetings covers all BGCA-sponsored training and professional development activities for Club staff, board members, volunteers and young people nationwide. It also includes travel expenses BGCA incurs for personnel from local Clubs to participate in Advanced Leadership Programs and other professional trainings that enhance their ability to serve youth. It comprises 1.3 percent of the annual budget.

Much of the planning and execution of BGCA events is handled by members of the national staff, working with local Club professionals and volunteers in the cities where meetings are held, thereby minimizing costs.

4. Lobbying Fees
As a recipient of federal funding which is vital to the execution of its mission, BGCA maintains a Government Relations staff in Washington, D.C., that represents the interests of Boys & Girls Clubs in our nation's capital. They serve as an advocate for youth development, and as a resource for Congress and other interested federal agencies who interact with the organization.

Lobbying expenses include fees for outside consultants who work at the federal and state level. The expenditures are well within established guidelines for non-profit organizations. Absolutely no federal funds are used to pay for these expenses.

5. Club Openings and Closings
Local Boys & Girls Clubs are independent 501(c)(3) organizations governed by local Boards of Directors and led by local professional staff. These Clubs become affiliates of Boys & Girls Clubs of America through a chartering process that includes meeting certain minimum requirements for membership, most of which are designed to ensure that resources are carefully utilized to directly support young people. There are currently 1,151 local affiliates, which operate some 4,000 chartered Club sites.

The operating budgets for these local Clubs are secured through the dedicated work of local board members and staff. Funding comes from a variety of sources and can vary significantly from one community to the next. In support of these local efforts, BGCA works to secure funding that can be passed directly through to support the operating budget of these Clubs. BGCA has generated more than $1 billion for local Clubs since 1996.

Unfortunately, during these challenging economic times, local Club leaders are faced with making very difficult decisions regarding the operations of local Clubs. For some Clubs, the impact of the economy has caused a reduction of programs, operating hours, and staff. In a number of locations, the impact has included the consolidation or closing of Clubs due to a lack of funding. For Clubs operating in shared facilities, such as public housing or schools, a cutback in the budget of the host organization can also result in the curtailment of Club operations as well.

Since the beginning of the economic downturn in 2008, BGCA has implemented aggressive strategies to minimize the number of Club closures. These efforts have prevented more than 120 Club closures. In addition, BGCA staff worked with local Clubs and community leaders to open 80 new Clubs across the country in 2009, despite the difficult economic conditions.

For More Information

Direct any questions to Evan McElroy, Senior Vice President, Marketing & Communications, at emcelroy@bgca.org.

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