Looking at “CONSOLIDATED STATEMENT OF REVENUES, EXPENSES,AND OTHER CHANGES IN NET ASSETS” https://ar2019.scouting.org/wp-content/uploads/2020/05/2019-Unaudited-Treasurers-Report-Final-5-13-201_2.pdf
Assuming BSA is operating with extra “capacity” The expenses remain the same
Total revenue was $209,914 million in 2018 so we double that for this analysis. We use 2018 because the world jamboree in 2019 caused a one time increase in revenue and expense for 2019.
Looking at “CONSOLIDATED STATEMENT OF FINANCIAL POSITION” https://ar2019.scouting.org/wp-content/uploads/2020/05/2019-Unaudited-Treasurers-Report-Final-5-13-201_1.pdf
The total liabilities is $645,360 million
Adding additional revenue of $209,914 million
would reduce the total liabilities to $435,446 million.(Now every company usually borrows money in short term for cash flow needs. A non-profit should have zero long term borrowings because memberships are not as predictable as with consumer products. (Philmont Scout ranch is collateral for a loan the terms of which are unknown)
I would say doubling our membership would NOT do it in the first year but if membership remained through the 2nd and 3nd years then the BSA should be pretty much out of the hole especially if the National jamboree shows a net gain as did the world jamboree. But the following caveats may hold true:
- the china virus has reduced sales in 2020 and its effect on revenue is unknown
- The payments to plaintiffs in the law suits is unknown. (there is an insurance reserve of $234,845 million and its purpose is unknown)
- The effect of the recent political statement letter “BSA’s Commitment to Act Against Racial Injustice” on membership, Gifts annuities and donations is unknown. (my go up or may go down depending on which direction the political wind blows?)
Current Ratio = Current Assets / Current Liabilities = $915,918 million / $645,360 million = 1.41 (A current ratio under 2.0 may indicate an inability to pay current financial obligations with a measure of safety.) https://www.cbiz.com/insights-resources/details/articleid/2541/nine-ratios-to-help-measure-your-not-for-profits-financial-health-article)
Operating reliance = program revenues / total expenses. = ($209,914 million + $67,565,000) / $306,962 million = 0.90 (A good outcome for this measure is 1 for a non-profit and, in the case of a non-profit with long term debt, more than 1. How much your not-for-profit is able to pay for total expenses solely from program revenues. https://www.eisneramper.com/essential-financial-benchmarks-not-for-profit-blog-0415
- Data is for 2018 and the 2018 program revenue was increased by the fee increase of $30 per in Dec of 2019. 2019 data is not considered because of the world jamboree. YTD data for 2020 is not available
- Short falls of revenue in 2020 due to the china virus may require more borrowing but the increase of fees beginning Aug of 2020 may make up for it.
- The current ratio did not include the Land, buildings, and equipment assets of $496,781 million against which $224,517 million has already been borrowed. Given typical 30% loan to values lending then only $123,229 million is available for future borrowing. A non-profit should not borrow on real property.
- The ratios calculated are my best estimates and they may be way off. An audit would provide more accurate results.
The ratios are not good for a non-profit but fair for other businesses. Cash is going to be tight. More borrowing may be required especially if membership is not increased. It would be nice for membership to get back to the levels seen before the LDS departure from BSA (adding ~500,000 members would be nice)
Given 80,756 charter partners in 2019 then each charter partner would need to recruit 500,000 / 80,756 = 6.19 new members without attrition. Sounds like an admirable goal.
I want to attend the 2021 National Jamboree. It should be as awesome as the 2019 world jamboree https://www.youtube.com/watch?v=nKRJNem5jfM