Massive Fee Increases Will Cause The Death Of Boy Scouts

I believe that the Boy Scouts of America program is in a death spiral and will end up either a much smaller program overall, or completely gone.  My kids have been in scouting for the past 4 years.  Mrs. C. now runs a cub scout pack and does a half dozen jobs in it.  I am not an official volunteer however I do perform some back of the house support functions, such as setting up for events and accounting work. I also built a website for our cub scout pack.  With Mrs. C.’s level of involvement I have gained some insight into how the program is run and the immense challenges it is facing.

Increased Scouting Fees:

At the beginning of 2020, Michigan increased the yearly fees per person from $1 to $12 to cover insurance costs. As a percentage this is extremely high.  In total dollar amounts this is only $11, but when you apply it across a family, it gets significant.  This $12 fee is also assessed to adult leaders.  For my family this means we are paying $60 instead of $5 per year at the local level. Shortly after this fee increase occurred the MCC (Michigan Crossroads Council) sent out a survey implying that another large fee increase is coming through.  That increase was just passed in June of 2020 increasing the Michigan fee to $60 per scout and keeping the $12 fee for adult leaders.   Now we are 60X higher in fees than we were just last year.

At the beginning of 2020 the national boy scouts increased fees from $33 to $60 per kid and from $33 to $36 per adult volunteer. This increase was massive, and is in addition to several increases over the past 6 years.  In 2014 they raised the fee from $15 per person to $24 per person, then to $33 per person in 2017.  In June of 2020 it was announced that starting August 1 2020 The national BSA fees will be $66 per scout and $42 per adult leader, with an extra $25 required for each new scout.   In 6 years the national dues price has more than quadrupled. They also announced that for 2021 the fees would increase again, to $72 per child.

Just to cover the yearly fees, which doesn’t touch actual program costs at the local level or any camping trips, we have to pay $126 per kid per year.  I suppose it is a positive that they only increased the adult fee by $9, but the massive increase per kid certainly gives sticker shock.  Between the Michigan and National fees our family with 4 kids and 1 adult volunteer must pay $558 per year, compared to $170 just last year. 

In 2014 it cost $16 per kid to be in Scouts in the state of Michigan.  Today, a mere 6 years later it costs $126. Just to be clear this is only for fees to the larger organization and does not cover camping costs or weekly program costs.

For a new scout to join it costs $151 in dues, plus they need to buy a uniform and the scout handbook, putting them right around $200 just to start.  Although a monthly payment plan is offered, this is still an exceedingly large barrier to entry, especially in a low income community. The new $25 is especially perplexing because they are creating a higher barrier to entry for their subscription model.  That extra $25 pushing the total to start to $200 may turn away many scouts, who otherwise would be paying the full fees for several years.

These Fees Make The Current Fundraising Structure Non Workable:

We historically advertised to new scouts that they can pay the costs of these dues and cover their costs for summer camp by selling popcorn. In our pack we previously had the first $100 a scout sold go directly to paying their $34 in dues then split the 34% the local pack gets with 14% going to fund the packs activities and 20% going into a “scoutbucks” account for the scout to pay for camp.  With dues now being over $120, a Scout would have to sell almost $400 of popcorn just to cover the yearly fees.  The problem is that most kids are not going to sell $400 of popcorn and if we continued to split it with 100% of that money going to the dues and none going to the pack’s bank account we would not be able to cover program costs.

Breakdown:  Let’s say a typical scout sells $500 of popcorn:

  • $195 goes to the MCC for their 39% share.
  • $135 goes to Trails End for their 27% share.
  • $170 goes to the local pack for their 34% share:
    • $34 goes to national dues and the pack covered the state dues (This is the 34% split from the first $100 a scout sell, up until 2019 this covered the combined $34 of national BSA and MCC state dues, when the MCC upped its dues to $12 we decided to have the pack cover this cost from the general fund).
    • $56 goes to local pack operations
    • $80 goes to “scoutbucks” account for camp

$500 In Sales with the new fees in place:

  • $195 goes to the MCC for their 39% share.
  • $135 goes to Trails End for their 27% share.
  • $170 goes to the local pack for their 34% share:
    • $66 goes to national dues
    • $60 goes to state MCC dues (we can’t cover the cost anymore)
    • (These national and state dues would be paid with the full 34% from the first $370 of sales).
    • $18 goes to local pack operations (14% X $130)
    • $26 goes to “scoutbucks” account for camp (20% X $130)

Selling $500 of popcorn for a local benefit of $136, with $80 being direct towards camp expenses is worth it for most kids.  With it dropping to $44 of benefit, with only $26 going towards camp, the program at the local level is a hard sell.  At the local level and running on a shoestring budget our program costs $125 per kid.

We have made the top scenario work because at the popcorn kickoff we do a “Lowe’s Day” where our scouts sell popcorn outside of Lowe’s for the day.  100% of the 34% split goes to funding the pack and this covers close to half our yearly budget, allowing the top scenario of bringing in around $56 per kid through popcorn sales to work.  At $18 per kid we would certainly be running a deficit, and that’s IF we retain kids with the new fees AND they are willing to sell the same amount of popcorn for a sliver of the benefits.   At the local level, without outside funding this formula will not work.

Our pack and every other pack in Michigan will have to get creative in finding ways to fundraise to keep scouting affordable without making the entire program being about fundraising.

Reduced Scouting Services:

At the end of 2019 out of nowhere the Michigan Crossroads Council decided to close the Rota Kiwan camp which had been in operation for 98 years (as well as 2 other camps in the state).  This is the only “in council” camp in southwest Michigan. Several concerned parents, scouts, previous scouts, and community members pledged over $300,000 to save Rota Kiwan, as well as pledged to offer labor to repair problems at the camp.  The MCC still decided they would close the camp.   The camp is not closing due to an inability of it to pay for itself, it is closing due to gross mismanagement.  Imagine getting the land and buildings for free and having no property tax or income tax.  Now add in that you charge a couple hundred bucks for people to camp there for 3 nights.  Only recently did the MCC even begin to discuss renting out camp facilities to outside groups when the camp is not being utilized for scouting purposes.

In 2018 the MCC brought in $14,852,091 in income and spent $15,433,846.  59% was on employee compensation, 3% on insurance, 1% on conferences and meetings, 4% on travel.  Only 2% of the budget was spent on rental and maintenance of equipment.  They have a board of directors of 59 people. Boy Scouts of America and the regional service organizations have become bloated bureaucracies with way too many paid staffers. The organization reminds me of the Vogons in the Hitchhikers Guide to the Galaxy. Here’s the 7 pages of org charts the MCC provided in their restructuring announcement.

 

Lord Baden Powell the man who started Boy Scouts said this in his farewell address:

“I have had an extraordinary experience in seeing the development of Scouting from its beginning up to its present stage. But there is a vast job before it. The Movement is only now getting into its stride. (When I speak of Scouting I include in it Guiding also.) The one part which I can claim as mine towards promoting the Movement is that I have been lucky enough to find you men and women to form a group of the right stamp who can be relied upon to carry it on to its goal. You will do well to keep your eyes open, in your turn, for worthy successors to who you can, with confidence, hand on the torch. Don’t let it become a salaried organization: keep it a voluntary movement of patriotic service. ” (full letter here)

For every year in existence the MCC has ran a substantial deficit.  The time for swift action was in 2013 / 2014, not 2020 after piling on over $6 million in cumulative deficits and selling off substantial assets.  For 2018 the MCC ran a deficit of $581,755.  This was also when the rate scouts paid in fees was $1 each.  With a $59 increase in fees and with 55,700 cub scout and boy scout members, this new fee adds $3,286,300 in revenue, over 5 times the deficit.  Rather than focusing on cost cutting through following one of the 12 points of the scout law, “A Scout is Thrifty“; and trying to eliminate 3.7% of expenses, they decided to increase fees by 60 times.

To be fair at the beginning of 2020 when the fee increased from $1 to $12 per scout they claimed this was to solely cover a massive increase in insurance costs.  If the $12 covered this gap then the remaining $48 per scout would still generate new revenue of 2,673,600, still 4.6X the 2018 deficit. In the pdf presentation of the fee and structural changes the MCC does state that they “reduced positions at varying levels to create significant budget savings“, however they do not detail these eliminated positions or savings from them.

The annual report is also a joke at being just a 4 page overview.  It does not breakdown income and expenses to any major degree of scrutiny.  Full financial documents should be published and readily accessible to all scouting members, including the compensation and titles for all employees. Spending $9,105,000 on employees at an estimated $60,000 average cost per employee means the MCC is employing around 150 people.  (A head count of the org chart shows 101 people in non volunteer slots, giving a $90,149 average per person if all employees are on the chart.)

Reduced Benefit From Popcorn Sales:

I spoke earlier about how the new fee structure will greatly reduce the benefits the local packs and individual scouts will receive from the popcorn sales.  Unfortunately that is not the end of the story.  Trails End has also decided to change the deal going forward.

Historically scouts have sold popcorn as their main fundraiser through Trails End.  “Local Scouting” receives 73% of this money and trails end received the rest.  The local pack would receive 34%, the State council receives the 39%, and Trails End receives 27%.

Historically Trails End has offered a scholarship to top sellers.  If a scout sells $2,500 in any year, for that year and every year after the scout will earn a scholarship worth 6% of their total yearly popcorn sales, with a maximum of $1,000 per year.  A top selling scout theoretically could earn $12,000 from the trails end scholarship by selling $16,667 of popcorn per year. In February of 2020 Trails End announced that it had retired the program.  After a backlash on Social Media they decided to phase it out for scouts who have already hit the $2,500, but this is still a major motivating factor for scouts to lose. For scouts who had already entered the program by selling over $2,500 in 2019 or earlier, for 2020, 2021, and 2022 a scholarship of 4% of sales would be earned.

Sure, the scholarship was a nice bonus, but lets not lose sight of what is really going on here.  Trails End has a heck of a deal with their scouting promotion.  A bag of popcorn that a scout sells for $20 would sell in the store for about $4.  Trails end gets a net sale price of $5.40 (27% of total), and they are selling WAY more volume because they essentially have a free sales force that sells their popcorn as a way to support scouting. They also avoid wholesale costs to retailers, which generally is a 50% markup so instead of receiving $2 per bag sold for $4 they receive $5.40 per bag sold through Boy Scouts.  The vast majority of scouts never sell enough to get the scholarship, and of those that do very few max it out for a year, let alone 13 years. The point is that it provides a strong incentive and target for the scouts to work towards.

The 6% scholarship for the kids who qualify for it, reduces Trails Ends net sale price from $5.40 to $4.20, still above what the same product in a retail store would sell. This is also only for the scouts who actually sell this much. The majority of scouts, and even the majority of sales are not made by scouts who hit this mark, so their combined average income per bag with the scholarship program in place is most likely close to $5 a bag.

This cost cutting measure should turn a lot of packs off of fundraising using trails end.  Most likely way fewer total bags of popcorn will be sold, because the major, extremely high goal of $2,500 is removed.  Ultimately I think Trails End will net a lower total revenue from scouting sales due to this change. This will also in turn reduce the amount of money going to the state council and the local packs.

With 27% of the popcorn money going to trails end and 39% going to the same state council that is closing camps and increasing fees by 1200%, it leads packs to question whether the effort is worth it. Losing the motivation for the top sellers also greatly lowers the average popcorn sale per kid in the pack, both because of his sales dropping off and from other scouts not being as motivated to catch up to him.  Our top seller in our pack has historically sold around 1/4 of the total popcorn for our troop.  Taking out the 1 heavy hitter and the average per kid will drop from around $500 to $400 or less, further making the popcorn sale a non viable fundraising program. Having a top seller or two creates a competition for the boys and they try to sell more, without this carrot I fear a lot of this competition will go away, dropping sales further.

Bonus:  The Michigan Crossroads Council recently announced that they will no longer accept returns at the end of popcorn season if packs have full cases.  Historically packs could return any full cases they have at the end of the sale no harm, no foul.  Now they are limiting packs to being able to only return 10% of their order (in full cases).  This is going to accelerate the death spiral because pack leaders will be apprehensive to set large targets due to fear of being stuck holding the bag of a bunch of overpriced popcorn they can’t sell and can’t return.  A pack that sold $10,000 last year instead of aiming to sell $12,000 this year, may order only $8,000 to ensure they won’t get stuck with any at the end.  Of course for this year Covid will also play a role in reducing popcorn sales.

The Scout Shop, Nickeled And Dimed:

This is a small pet peeve of mine and is not of any major significance of the long term financial health of the program, but it does add sticker shock to the entire program and goes against the “A Scout is Thrifty” motto.  The boy scouts charges an insane amount of money for its proprietary products that scouts (or their packs) must purchase.  For cub scouts each scout needs a handbook for the grade they are in.  These handbooks are spiral bound and they charge $17 for them.  For an organization that has 2.3 Million youth members (national BSA), if spread evenly across the grades they would have 176,000 per grade each year.  The cheapest prices for publishing should be had at 10,000+ units.  The unit cost of these books should be under $5, but the BSA chooses to make this a profit center.

Add in belt loops and patches which sell for a few bucks each and once again are mass produced with a true unit cost of well under a dollar. The scout shops are also operated at physical locations all across the state, many in leased buildings with long term leases.  I maintain that NONE of these shops should exist and all of the products should be sold and fulfilled online out of 1 inexpensive warehouse building.  This shouldn’t even be done at the state level, this should be done at the national level.  1 warehouse supplying all the materials for the entire country, no physical stores.

Comparison Value:

The Boy Scouts MCC and National continue to claim emphatically that Boy Scouts is still a tremendous value because other after school programs cost more.  The problem with that comparison is that those other after school activities are paying someone to run them.  The coaches for school sports are compensated.  The dance teacher is being paid for imparting her skills to the kids.  With scouts parent volunteers are doing all of the work in the day to day experience of the children.  This is not a valid comparison.

Level of Parent Involvement:

The level of parent involvement needed for the scouts program is huge.  The amount of effort needed is just about the same whether the pack has 20 kids or 100 kids.  This means that fewer volunteers do far more work in smaller packs. It isn’t just being a leader during the once a week meetings.  Mrs. C. spends on average well over 10 hours a week on scouting stuff.  With all the above changes happening at once, packs will shrink, causing them to lose parent volunteers and the ones who remain to be way overworked. Also, as mentioned above, you have to pay to be a volunteer! This will accelerate the death spiral as smaller packs, especially those in lower income areas will have to fold.

The original idea of scouting was good.  To train boys to become strong leaders with skills in several different facets of life.  Over the last 100 years it has turned into a bloated bureaucracy with several layers.  It has the albatross of decades old child abuse around its neck, despite enacting policies that ensure such abuses couldn’t happen again.  It doesn’t matter that they are trying to expand their reach by adding in a program for Kindergarten or by allowing girls into the program.  Boy Scouts has grown into an inefficient and costly program and will eventually crush itself under its own weight.

For years I’ve been telling Mrs. C. to “let it die”.  Yes the boys have fun, but it is becoming seriously outweighed by both the direct financial cost and the amount of volunteer work required.  The financial cost is really bugging me and I’m in a great financial position! I can’t imagine how frustrating these massive unprecedented fee increases have to be to people who are living paycheck to paycheck.  I’m certain we will not be able to recruit new scouts in our area when it costs over $200 for them to join, and many of our current pack members, especially those with multiple kids in the program will leave due to the cost.  Another issue is that the parents that have multiple kids and are going to leave are generally also the parents who are volunteers in the program.

The mismanagement of funds, the massive increases in fees, the lack of a viable fundraising option, and the added workload for fewer volunteers will ultimately cause the death of Boy Scouts.

What do you think about the Boy Scouts program and the recent changes that have occurred? Am I over reacting to these fee increases?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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