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[Split Thread] Comments about the JREF & financial transparency

Luke T.

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May 2, 2003
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I've seen the publicly available JREF financials. They are not the all-is-revealed documents one is led to believe. One cannot blame people for thinking they are. Because whenever someone asks where the money goes, they are brushed off and directed to these mysterious public documents.

All you will learn from them is how much a handful of people are paid. You will know Randi's six figure income.

All the money that comes in goes into one giant pot. Whether it comes in from forum donations, telethons, private donors, or aliens from Tralfamdor. Alll the money that goes out, comes out of that one big pot.

So if it is transparency you are looking for, give it up. Looking at the documents, one could be led to believe most of the money goes into the pockets of the adminstrators of JREF.

I saw a topic "What does the JREF do?"

In the past couple/few years, not much. If one lives outside the JREF bubble, chances are near 100 percent one has not seen or heard the JREF in action, unless one happened to be in Vegas on a specific day and accidentally stumbled into a JREF get-together.

Chances are good that if you ask a random person on the street if they have ever heard of JREF, that answer would be no. If they have heard of Randi, they will probably speak of him in the past tense. If they have heard of the Million Dollar Challenge, it will be "a long time ago."

Try it for yourself and see.

They sure as hell have not heard of Phil Plait taking the mantle of responsibility at JREF.

I'm sure JREF looks very active inside the bubble. But from outside, dead silence.

So where does the money go? Good luck finding out.
 
Luke T. said:
I've seen the publicly available JREF financials. They are not the all-is-revealed documents one is led to believe. One cannot blame people for thinking they are. Because whenever someone asks where the money goes, they are brushed off and directed to these mysterious public documents.
Click to expand...

That is because they happen to be the best place to determine where the money goes. If, for example, you wanted to track donations from the public, you need look no further than page 1, line 1b (they made $281,047 in public donations during this reporting period, by the way). If you're trying to figure out precisely how that money was spent, something that they are not required by law to disclose, you'd need to ask them - but be aware that in doing so you're essentially asking them to do a lot of work for you for free, so it's really a bad favor you're asking them for.

Luke T. said:
All the money that comes in goes into one giant pot. Whether it comes in from forum donations, telethons, private donors, or aliens from Tralfamdor. Alll the money that goes out, comes out of that one big pot.
Click to expand...

All businesses run this way. Money comes in, money goes out. The 990 form (which you claim to have seen) offers you a much more specific way that money comes in, and even more specifically how that money goes out. Using the "a big pot" metaphor is suggestive of someone who didn't understand what the 990 was trying to say, in which case I would suggest you ask for clarification.

(Tralfamdor is very nice this time of year, by the way.)

Luke T. said:
So if it is transparency you are looking for, give it up. Looking at the documents, one could be led to believe most of the money goes into the pockets of the adminstrators of JREF.
Click to expand...

If one merely looks at the initial numbers, certainly one could assume this. I would ask one who did such a thing, however, to bear attention to the further breakdown of expenses provided and to run a bit of the numbers involved to develop an accurate conclusion.

The JREF took in $831,099 gross (line 12) during the 2007-2008 fiscal year. During this same fiscal year (and it's important to note that they made a $28,875 profit during this time so something is working right), they paid Mr. Randi (whom I presume you're referring to by the "administrators" statement in your post) $175,000 (line 25a). Even further on line 25a, they break his salary down into the following brief chart:

JREF 990 said:
Program Services: $110,807
Management & general: $38,797
Fundraising: $25,396
TOTAL: $175,000
Click to expand...

Ergo, Mr. Randi's salary amounts to (175000/831099)=21.06% of the JREF's gross revenue for the time period - certainly a significant percentage. However, this raises a very interesting query - what are the JREF's gains on what they pay Mr. Randi for, or what is Mr. Randi's exact asset-to-expense ratio for the company?

Estimating that requires us to abruptly jump down to part VII, line 93a "Program service revenue." It suggests that the JREF made during this time $425,668 from program revenue alone. As the JREF programs always involve Mr. Randi (usually as the principal party in these programs, speaking engagements and so on), he can generally be said to bring in a great percentage of that money. Running the calcuation on all of it: (110807/425668)=26%

So, in short, 74% of the proceeds from all programs put on by the JREF go to the organization, whereas Mr. Randi receives 26%. Given that Mr. Randi is a mainstay in these programs (in fact I'm not sure if the JREF puts on a program that he's not a major speaker in), he is considerably underpaid in this matter. It would also not be a stretch of the imagination to assign a significant portion of the general fundraising done by the JREF to Mr. Randi's efforts and name as well.

Therefore, Mr. Randi represents a tremendous profit for the JREF by his work done for their programs alone. It is impossible to calculate exactly how much is donated to the JREF each year due to Mr. Randi's presence there, but it is undoubtedly a goodly percentage which would drive his profitability much higher.

Please let me know if you have any further questions.

~ Matt

(ps: As always, the JREF's 990 form can be found here: http://www2.guidestar.org/ReportNonProfit.aspx?ein=65-0649443&Mode=GxLite&lid=523196&dl=True {you will need to make an account, but it's free to do so})
 
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Luke T. said:
Darat is attempting to hide the truth and moved my posts to another topic: http://www.internationalskeptics.com/forums/showthread.php?p=4577519&posted=1#post4577519
Click to expand...

I know something about professional fundraising in general -- Rule number one is go after big donors. Even outfits who do lots of very successful nickel and dime fundraising (such as the UJA) do that first.

Going after big donors is something the James Randi does really well, to a great extent because of his show business contacts (and not just performers).

It's pretty clear to me that JREF has only one significant income producing asset -- That is the person of James Randi himself.

So Randi will not live forever but his truth will go marching on, carrying a big pile of money and not well able to keep it coming in ...
 
MattC said:
If you're trying to figure out precisely how that money was spent, something that they are not required by law to disclose, you'd need to ask them - but be aware that in doing so you're essentially asking them to do a lot of work for you for free, so it's really a bad favor you're asking them for.
Click to expand...

Do they have that same attitude with donors? I bet that would go over well.
 
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remirol said:
Ad hom. Address his points?
Click to expand...

Here's an explanation of an ad hominem fallacy.

I was trying to find out whether some kind of inside information was known, because the public finance statements of JREF have been done to death in previous threads.
 
Luke T. said:
Do they have that same attitude with donors? I bet that would go over well.
Click to expand...

You seem to be seeking something called "general ledger" entries, or much more specific details regarding purchases and payments. I am not sure why a donor would want these, of what benefit to them is it to know that the JREF recently spent $13.52 on a box of pens? Or $257.83 buying various office furniture? These are really small-time payments that don't in and of themselves make much of a difference to a donor (and they certainly don't make a difference at all to the JREF), or shouldn't. Of far greater use, for example, would be line 37 which suggests that over the fiscal year the JREF spent $2,028 on equipment rental and maintenance - the cumulative total of all these payments is something a wise donor would calculate anyway, so the 990 goes ahead and provides it.

It seems to me that you are viewing donations very much in the short-term, meaning that you want to know specifically where the $20 (example amount) that you donate is going, or even more specifically what they intend to do with it. I would generally question the value this information has to you, as well as the underlying assumption that they themselves know - it was probably not known, for example, that they were out of pens until someone went looking for one and noticed they were out, necessitating an expense to obtain additional writing utensils. This isn't really an expense you can predict with short-term regularity, it's better to establish an account for these expenses over the fiscal year (you can then begin to compare this years' amount with previous years to see if you're not getting a good deal, for example). The only expenses you can predict with regularity are contractual in nature, meaning maintenance fees, rent, utilities, anything else they've signed a contract to provide or buy. These are much more significant to any potential donor because they represent long-term liabilities, things that they will be spending money on for the foreseeable future, and therefore things that most directly impact the financial health of the organization over the long term.

Please let me know if you have any further questions.

~ Matt
 
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