Plan B Forum

While I support the goals of the Southern Poverty Law Center and I believe they are honestly working towards those goals I will not give them money, probably never. Their finances show that they have too much invested > 7 years worth of expanses, they take in more than they spend anyway, and on top of that spend too much on fundraising. A group who are bloated with unused cash spend > 20% on fundraising!

And finally, while it is possible that they have a perfectly legitimate reason for doing so investing nearly all their money offshore really looks bad. In the current vernacular "it has bad optics". I have to suspect the action and motives of people who behave so furtively.

When I support an organization I want them to spend the money on program activities. If they are banking it instead then that tells me they don't need it and giving them more is wasteful. I quit giving to the equal rights campaign for similar reasons back in 2003 (although their finances have been reformed since then).

By contrast when you give money to project Mercy (founded by Marta Gabra-Tsadick a family acquaintance from Ethiopia)* they SPEND IT on program activities. And the same is true of the Tropical Health Alliance Foundation run by Dr. Larry Thomas (who pays for all fundraising and overhead out of his own pocket).

I don't give just to scratch an itch (not that I don't itch now and again) I give to groups who need the money NOW.

yrs,
rubato

She was a senator in Haile Selassie's government and fled when the Derge took over.

Just curious, have you written to SPLC to express your concerns and seek answers for the reasonable questions you pose?

I have just automatically (knee-jerk 1960's do-gooder reflex) donated to the SPLC. I have never checked their finances. Thank you Rubato.

I think I will do some research on my own.

snailgate.

the allegations about having significant investments overseas have been around since the summer; so far as I know the SPLC has not publicly responded to them.

It is not a rumor (but it may also be a non-issue). From the Schedule F of their 2016 Form 990:

"The Center has ownership in several foreign corporations. However, the Center's ownership percentage in these corporations does not rise to the level of reporting on the Form 5471." [5471 requires filing if a U.S. investor has more than 10% ownership in a foreign company.]

"The Center is an indirect owner in several passive foreign investment companies. The direct owner has properly reported these investments on Form 8621. Therefore, the Center does not have a filing requirement."

This seems to be a more active type of investment strategy than investing in international focused mutual funds. This probably makes sense because they have over $300 million in their investment portfolio so have their funds professionally managed (direct investments rather than allocated to mutual funds).

I would also think that keeping a big endowment could be important should they become embroiled in a complex litigation that can run years; the burn rate for cash then could be quite high.

They admitted it:

http://www.weeklystandard.com/the-south ... le/2009553

"...

When THE WEEKLY STANDARD inquired of the SPLC about the appropriateness of the $69 million in offshore investments for the U.S.-based civil rights group, SPLC president Richard Cohen responded: “It is common for universities, foundations and other nonprofit organizations to have a portion of their endowments invested in off-shore funds. Each such fund in which the SPLC is invested is a highly reputable one that was recommended by Cambridge Associates, one of the country's leading investment advisory firms for nonprofit institutions.”

...

Although SPLC president Cohen's asserts that the group’s practice is “common,” at least one other large civil rights organization completely eschews the practice. The American Civil Liberties Union and related ACLU Foundation have combined assets of more than $250 million, but both 990s filed by the groups answer "no" to a question about "aggregate foreign investments valued at $100,000 or more." Another civil rights group, the Human Rights Campaign, similarly avoids foreign investments, though the organization’s assets total only about $9 million.

I do support the ACLU.

yrs,
rubato

Having offshore investments is not in and of itself either a good or a bad thing. And yes, it is absolutely common in the not-for-profit world.

I don't get the problem. SPLC has substantial assets to invest and the board has a fiduciary duty to invest in a prudent manner. Nearly every investment advisor I know, from those advising smaller individual portfolios to large institutional endowments and retirement plans, advises investing in a diversified portfolio that includes international investments. Smaller investors are limited to investing in U.S. based mutual funds that invest in international equities, but institutional investors have more opportunities for direct investment that reduces their fees and currency-fluctuation risks. But fundamentally they are all doing the same thing, taking a portion of their portfolio and diversifying it in non-U.S. equities (and they've been well-rewarded the last year or so for this). It is the smart and prudent thing to do -- what's the beef?

From Rube's initial post:

investing nearly all their money offshore

From Rube's later post:

$69 million in offshore investments

From LR's post:

they have over $300 million in their investment portfolio

$69 million out of $300 million is a little less than a quarter so not "nearly all." I don't think that would influence my decision either to support or to reject them.

Millions in an investment portfolio, Southern POVERTY Law Center?

I think not, false advertising is the least of their worries.

The OP was incorrect as to the percentage. A later post corrected it. And the offshoring was only one of several reasons not to fund them. And while it does matter, people offshore money in part to hide what they are doing, it was not the decisive one.

One problem for charities is that over time they focus less on their programmatic goals and more on the institution itself. They exist to exist and become richer and less to achieve something. the financial profile of the SPLC shows they have fallen far into this pit. 22% spent on fundraising? (in one place the charity navigator says 21.2% in another it says 21.8%) Only 65% on program goals?

A different issue I have with US charities is that they become so 'professionalized' that they are inefficient. High salaries, high overhead, large fixed costs add up to doing less of what I support them for. I understand that it is just a fact of life and I still support Planned Parenthood and UCSC (for two examples) because the need is there but when I can give $50 to THAF and all of it goes to curing a blind person and freeing the child who was taken out of school to lead them around I just think its more efficient. And groups who have large numbers of volunteers show that their hearts really are in the right place rather than a highly paid professional staff.

The SPLC has a huge glut of resources which it is not using to further its stated cause. They spend way too much asking for more. Apparently they don't need it and should disburse it to other groups which could put it to use.

yrs,
rubato