What we can learn from Girl Scouts
By Sidni Shorter In Podcasts Posted October 4, 2013 0 Comments

What we can learn from Girl Scouts’ financial tipping point

“As a movement, we are at a tipping point,” says EVP and CEO of Northeast Texas Girls Scouts, Jennifer Bartowski in a .

Sometimes what we learn from history isn’t enough. 100-year old Girls Scouts is undergoing financial strain and “shrinking pains” after merging many of their councils in an effort to increase efficiencies in running their programs. Despite its longevity, the Girls Scouts are facing uncharted territory and huge challenges ahead.

At the front end of these mergers that shrank 312 councils to 112, Girl Scouts’ leadership anticipated the benefits associated with economies of scale and lowering overhead. Instead new CEO, Anna Maria Chavez, and her fellow national and local executives find themselves with increasing financial pressure due to:

  • growing pension liabilities (increase of 1,800 pensions) for early retired employees from dissolved councils;
  • diminished cookie sales (accounts for 80 percent of national budget) from disgruntled families now served by non-local councils;
  • declining donations attributed to the sluggish economy, historically “bashful” development and post-merger decentralized fundraising;
  • falling membership (by 20 percent since 2003) and the obvious need to improve the relevance of programming for girls’ interests today.

In response to these financial challenges, the national office announced an organization-wide campaign to raise $1 billion by 2017. $100 million will be raised by the national office and $900 million by the local councils. The national office is focusing on the following objectives to restore financial stability:

  • A new culture of philanthropy is on the agenda in light of this goal—with particular focus on tapping its estimated 58 million Girl Scout alumnae.
  • Struggling councils with pushback from families and donor communities are watching and learning from councils who adapted to the merger smoothly and putting substantial budget dollars toward more fundraisers, consultants, development infrastructure and localized “asks.”
  • Chavez is leading an initiative to adopt Zappos.com’s “customer-centric” approach to their business. Girl Scouts aims to improve relations with local organizations, councils, scouts and adult volunteers and has committed additional staff to this effort.

If I were part of the strategic planning process before the mergers took place, my financial lens would have prompted me to ask the following questions:

  • What is our pension liability after all of the dissolved positions result from mergers?
  • How will cookie sales be affected by regional council support versus local council support (since 80% of our revenue comes from this source)?
  • What factors currently contribute to the success of our fundraising nationally and locally with each council?
  • Do we have buy-in on the merger from our major donors and sponsors? How do we help local councils leverage buy-in from donors before we dissolve them?
  • What is our plan for introducing donors to regional council executives before the merger?
  • What is the contingency plan if only 50, 75 or 85 percent of the $1 billion goal is reached in 2017?

At Execute Now!, we specialize in helping our clients obtain accurate information by creating useful reports so they can make dependable forecasts. It’s important to regularly produce these reports and make adjustments or allowances for the fluctuating nature of fundraising. The Girl Scouts is fortunate to have 80 percent of their revenue come from relatively stable earned income. However, it would make financial sense to determine how a merger might affect this significant income stream and then create contingencies to support various projections. Additionally, with 30 percent accounting for private donations through the 2017 campaign, various cash flow scenarios and projections would be essential.

By Erica McGeachy Crenshaw, President/CEO of Execute Now!

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