VoA Organization spends most of its money on thrift stores FWD

Tom Boland (wgcp@earthlink.net)
Wed, 22 Jul 1998 23:11:04 -0700 (PDT)


http://flash.cleveland.com/cgi-bin/clv_nview.pl?/home1/wire/AP/Stream-Parsed/OHI
O_NEWS/o0425_PM_OH--Volunteers-Spendi
FWD  Cleveland Live NewsFlash



     ORGANIZATION SPENDS MOST OF ITS MONEY ON THRIFT STORES

     The Associated Press  07/19/98


COLUMBUS, Ohio (AP) -- The local Volunteers of America is defending itself
for spending more than half its budget to run thrift stores.

"It is run like a business. It must be run like a business," said Jeff
Braise, who became president of the organization eight months ago. "But the
proceeds from that get channeled back into programs and services. And there
need to be enhancements."

"We've become very financially strong -- very self-sufficient, which is
ideal because we don't have to depend on other people," said Chairman
Robert Halley. "But the other side of the coin is, 'Are we doing enough?"'

Less than 11 percent of the agency's money comes from public tax money, far
below the 67 percent average for VOAs around the country, according to an
annual report on the national agency.

The Columbus Dispatch reported on Sunday that the local branch of the
organization spent 19 percent of last year's budget on direct services,
such as operating homeless shelters in Columbus and a community center in
Dayton. That amounts to $1.6 million of the $8.7 million budget, according
to an audit the VOA commissioned.

It spent more than half of its budget, or $4.7 million, running the thrift
stores. Most of that money went to employee wages and benefits.

Kate Conover, vice president of a charity watchdog group called National
Committee for Responsive Philanthropy, said the amount spent on overhead is
too much.

"Eighty percent is very high -- it's more than questionably high," she
said. "Usually when it's been that high, either there's been a very good
reason or it's a real problem."

Standard overhead for a charity typically ranges from 15 percent to 40
percent, including everything but money spent on services. Counting wages
is questionable, she said.

"Technically, they are correct in adding that as an administrative
expense," she said. "Ethically, that's up for debate. Most people don't do
it that way."

The VOA's national literature says more than 85 percent of its revenues is
spent on program services. The organization includes its thrift store wages
as part of that percentage.

Dan Langan, a spokesman for the National Charities Information Bureau in
Washington, said including wages under the category of services is
acceptable in the nonprofit sector.

Store employees "are making a charitable service go," Langan said. "They're
doing hands-on work, and therefore it's entitled to be put under program
services.

END FORWARD

** NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is
distributed without profit to those who have expressed a prior interest in
receiving the included information for research and educational purposes. **

HOMELESS PEOPLE'S NETWORK  <http://aspin.asu.edu/hpn/>  Home Page
ARCHIVES  <http://aspin.asu.edu/hpn/archives.html>  read posts to HPN
TO JOIN  <http://aspin.asu.edu/hpn/join.html> or email Tom <wgcp@earthlink.net>