NSA of Canada Funds Report For 2009

Sunlight is the best disinfectant so let’s see if we can allow some to fall onto a topic rather dank and musty for most Baha’is. The National Spiritual Assembly of the Baha’is of Canada has submitted their tax returns to the government of Canada and since this information is in turn public, let’s take a look to see what we can learn about how the NSA is spending the funds donated to them.

Please don’t take my word for anything and double check the numbers for yourself. You can see the T3010 Charities Tax Return filled out by the NSA by visiting the CRA charities website. Unfortunately Baha’is like me have to rely on this information because the NSA does not share information with them via normal Baha’i channels.

As you’ll see below, even within this legally enforced format, their disclosure leaves much to be desired and rather than provide answers, it delivers new questions. Below you’ll find some of the things that jumped out at me. Perhaps you’ll notice other points and if so, I’d welcome your comments.

Revenues
In the Revenue section of the “Statement of Operations” there is a clumsy error showing that simple arithmetic continues to challenge the Treasury department at the NSA of Canada.

(Statement of Operations)
Revenue:
T3010 Line #Total ($)
Total eligible amount of all gifts for which the charity issued tax receipts4500$6,688,533
Total amount received from other registered charities (excluding specified gifts and enduring property)4510$4,201,533
Total specified gifts from other registered charities 4520$89,124
Total other gifts received for which a tax receipt was not issued by the charity4530$1,086,582
Total interest and investment income received or earned4580$83,700
Gross proceeds from disposition of assets4590$3,280,443
Net proceeds from disposition of assets (show a negative amount with brackets)4600-MISSING-
Other revenue not already included in the amounts above4650$13,374
Total revenue (add line 4500, 4510 to 4580, and 4600 to 4650)4700$12,284,818
Total Revenue (est. by assuming net approximates gross proceeds)$14,267,583

Line 4600 is simply missing (empty cell rather than the word MISSING that I wrote above). If we assume that the total number ($12,284,818) entered in the T3010 is correct, then that implies a net proceed of $1,175,706 from the gross proceed of $3,280,443 – less than half. Of course, you and I are not privy to the actual accounting ledgers but can only go by what we’re given from the NSA. But that implied amount for the net proceeds is highly improbable as it would require an unfathomably exorbitant expense related to the sale of the assets. Much more likely is a clerical or human error.

So either the person who filled out this form made a mistake by calculating the net amount incorrectly and then compounded that mistake by excluding it from the form (only allowing us to calculate the amount via inference by deducting it out of the sum) or they made the mistake of not adding the net proceed amount correctly to approximate the gross proceed (somewhere close to $3 million) and then forgot to add it to the net revenue. In either case, the key word here is mistake and somewhere, someone made either one or several.

The next interesting tidbit is that total donations (however we finally calculate it) were significantly lower than the previous year – in 2008 the NSA reported total revenue of $16,277,836. For the past 10 years or so, the NSA built up quite a war-chest as almost every single year had positive net inflows (I know, I know, during those same years they were continuously screaming about deficits and shortfalls – that’s another story). To make up for the shortfall in 2009, it seems that the NSA dipped into its coffers and sold about $3 million worth of investments. This represents about 13% of its total 2008 liquid assets.

Chile Baha’i Temple
So what did they do with the money raised by donations from Baha’is and from the sale of their long term investments? The NSA decided to step up big time (or they were directed to by the UHJ/ITC) and sent the vast majority of their donations (and then some!) to help build the temple in Chile. In total, $12,988,273 was sent outside of Canada:

OrganizationAmount ($)
Total Activities outside Canada$12,988,273
NSA Baha'is of the US$59,150
NSA Baha'is of Chile$12,538,058
Various NSA's, Pioneering & Teaching$391,065

This is much more than the average ($4 million) for expenditures sent outside of Canada for the past 12 years and close to the highest amount sent outside Canada in 2004 – $14 million. But those funds were sent to Haifa. The fact that the NSA sold off a significant amount of their investment assets implies that this was done to pay for the ongoing construction costs and that they did so as directed by Haifa. This isn’t surprising as usually the most well off countries pay much more than the average share of such projects.

Compensation
There are several important issues here with compensation. First of all, this is the first time ever that the NSA has actually followed the CRA laws and disclosed the total amount that it is paying in salaries and like compensation. They have also gone back and re-submitted this for the 2008 and 2007 returns (but not the previous years). For example, in the T3010 filings for the fiscal year 2004 there is $43,746 under “Management & Administrative Expenses” even though in another location they cite the total number of compensated employees at 45!

In any case, now that we finally have the information, it is very interesting. In total, the NSA spent $2,431,889 on compensation for the fiscal year 2009. That is a significant amount relative to the total donations received. Using their own total amount for donations received, then the NSA of Canada spent 20% of their total revenue on compensation.

The sum comes up to a huge amount if we divide by the 20 or so people who work full time or part time in Baha’i administration in Canada. Why 20? To start, we have 9 people on the NSA itself and then about 10 others who work at the National offices and other ancillary administrative work. It is a rough estimate, I’ll concede, but it will do for a back of the napkin calculation. So $2,431,889 divided by 20 is $121,594 – that’s a lot of money! That’s more than $10,000 every single month for one year, for 20 people. Wow.

Fortunately, the CRA requires charities to provide some more information regarding their compensation expenditures. They do not have to detail their compensation expenditures but only have to disclose how many full-time employees are within certain ranges:

Salary (Min)Salary (Max)Salary (Median)# PersonsTotal
Discrepancy$1,621,889
$1$39,999$20,0001$40,000
$40,000$79,999$40,0009$720,000
(NA)(NA)Part-Time3$50,000
Total Compensation$810,000
Total Compensation Reported to CRA$2,431,889

In the salary range of $1 – $39,999 the NSA has 1 full time employee. In the salary range of $40,000 – $79,999 the NSA has 9 employees (quite possibly the NSA members). And finally, there are 3 part time employees who received a total of $50,000 compensation in aggregate.

Let’s assume the maximum for each salary range. So for we have $40,000 plus 9 full time employees at $80,000 each and finally, $50,000. That is a total of $810,000.

Hmmmm…. notice anything? The total compensation for the salaried workers is $810,000 – giving them the benefit of the doubt and assuming the maximum point in the range – but the total compensation is $2,431,889. So there is more than $1,600,000 unaccounted for.

If we assume the median, rather than the maximum for the salary range, the difference is even larger. A very large amount of money is spent via expense accounts (including travel, short term accommodation, etc.) as well as salaries relative to the total budget of the NSA. Unfortunately, the NSA is not only reticent to share information when it comes to the annual report submitted to delegates at the National Convention, it is also reluctant to accurately fill out the CRA charities report as you can see. Or perhaps they are just incompetent and the calculator was being used by someone that day.

Well, that’s about it. If I notice anything else of import, I’ll mention it. But for now, let me know what you think. If you’re a Baha’i in Canada, have you ever tried to contact the NSA requesting more detailed financial information? I’ve spoken to a few Baha’is who tell me that their experiences with the Treasury department are slightly less interesting and fruitful than talking to sheetrock.

Oh and if any fellow Baha’i from the US knows how or where to access the 990 form for the NSA of the US, let me know. Thank you.

New Baha’i Renovation & Beautification Projects

shrine-bab-israel-60-anniversary-light-show

Shrine of the Bab illuminated by celebration of Israel’s 60th anniversary.

The Universal House of Justice has communicated the expansion and continuation of renovations and beautifications for existing and expanding Baha’i properties in Israel. Click to read the full letter here.

The BWC has been able to exchange some land north of Akka for a plot adjacent to the Mansion of Bahji. The current resident is the Israeli Military. There are continuing negotiations with the government for additional land exchanges adjacent to the Mansion of Mazra’ih and the Ridvan Garden.

There are renovation and beautification plans for the Ridvan Garden (in Israel) and well as Junayn Gardens, also frequented by Baha’u’llah (although much less frequently). I haven’t visited the Junayn Gardens but when I was in the Ridvan Garden I didn’t find anything that looked shaby or needed beautifying.

It was, to my eyes, a beautiful and relaxing place with little or no evidence of the hyper-manicured lawns and flowers of Mt. Carmel. In fact, I preferred its more rustic and natural look. I’m certainly no expert but it would seem to me that it was more historically accurate and in keeping with the conditions that were present at the time of Baha’u’llah. But then again, I don’t want to make assumptions because the UHJ hasn’t detailed what exactly they will be doing to “beautify” the Ridvan Garden.

The Shrine of the Bab will also receive attention with the installation of earthquake resistant support, the restoration or replacement of the dome tiles (gold plated) which have lost their shine due to exposure to the harsh elements of Haifa’s port city atmosphere and the opening of the remaining 3 chambers, behind the Bab’s resting place, to the visiting public and Baha’is. Presently this space is closed off to visitors and is being used for storage. This space was, curiously enough, used by Shoghi Effendi, to house temporarily the archives related to the Baha’i Faith.

Speaking of the archives, the International Archives Building is being fully restored and renovated both inside and out. I covered the reason for the restoration of the Archives building previously.

Since I wrote about the detrimental effect of Haifa’s polluted air, nothing has really changed. In fact I wouldn’t be surprised at all if within our lifetimes the BWC had to undertake a wholesale and complete restoration project to repair the damage it had wrought to the Arc buildings.

As you may have surmised by now, all of this will require money. So the UHJ is asking for donations through the NSAs and various Baha’i funds to finance these restoration, renovation and expansion projects.

Transparent is as Transparent Does

transparent

I’m not sure if any Baha’is who live in Alaska read this humble little blog. I only ask because if there are any fellow Baha’is from there, they probably already know the news that I’m about to share with you.

The great State of Alaska has recently decided to become so transparent that they have put their whole checkbook on the internet for everyone to see.

All expenses over $1000 are detailed and shared on their Division of Finance website. You can download the spreadsheet in either Excel or Adobe PDF.

Can you imagine that? total transparency from a state government?!? I was floored when I read this! Like many others I don’t hold politicians and by relationship, the bureaucracy of government in high regard. But here they were surprising the heck out of me!

One of my pet peeves is how opaque the Baha’i administration is when it comes to the fund. I’ve already gripped about it here so you can read that instead of me rehashing it all.

As far as I know, there is no precedent for the kind of transparency that Alaska has implemented in any religious organization. In the previous discussion Sonja mentioned that as a member of a local New Zealand Baha’i community they did have transparency. But sadly, I find this the exception, rather than the rule. Even this iota of transparency is limited to the local level. I have heard of no NSA being equally transparent with their member community.

But even if no religious organization is transparent… who cares? I want the Baha’i Faith to blaze trails, to go where others haven’t, to be refreshing, exciting, invigorating, and to inspire individuals.

Money is just that, money. It is not the end all and be all of a community. It is simply a tool. So then the question is, are we using this tool to our best ability? are we bending it to perform fully in service of the Cause? are we using it in a way that encourages fellowship, unity and growth?

I would argue that more transparency would serve those ends rather than less. This is not a new idea really. Many for-profit organizations have this level of transparency. Just search for “open book management”.

To me, personally, when I see that the Baha’i administration doesn’t share information about the fund… it communicates that they don’t trust me. That they don’t want me in the loop. I’m not included. I’m supposed to stand over there and just hand over my money.

On the flip side, asking for transparency can be seen as a sign that we, the Baha’i community are implying that we don’t trust those who are on the institutions and manage the funds of the Faith. All I can say is that, unfortunately, we don’t have a spotless record on that. Mistakes have been made and since we are only fallible human beings struggling to transform into higher beings, we will undoubtedly continue to face such challenges.

Which then begs the question, would it serve such purposes to be more transparent or less? would secrecy and opacity serve the interests of those that stray? making it easier for them to hide and defraud? or would it make it more difficult?

In any case, the advantages of transparency go leaps beyond such concerns. The much larger picture is that transparency and the sharing of information creates unity and inspires individuals to be motivated by loftier ideals.

Anyway, those are my rambling thoughts. What do you think?

World On Fire by Sarah McLachlan

After watching this I couldn’t help but think of all the money that was spent to build the Baha’i Arc project on Mt. Carmel.

Imagine if instead of $250,000,000.00 (that’s $250 Million US) we had instead spent $2.5 Million and then used the rest to “tap into the water” and help people in dire need.

Does the world need marble-clad buildings? or medicine for children? Had Abdu’l-Baha been with us, what do you imagine He would have decided?

Would the prestige of the Baha’i Faith be elevated more by sumptuous buildings and gardens or by deeds of charity that bring health, food, shelter and education to the poor?

Lyrics:

Hearts are worn in these dark ages
You’re not alone in this story’s pages
Night has fallen amongst the living and the dying
And I try to hold it in, yeah I try to hold it in

[Chorus]
The world’s on fire and
It’s more than I can handle
I’ll tap into the water
(I try to pull my ship)
I try to bring more
More than I can handle
(Bring it to the table)
Bring what I am able

I watch the heavens and I find a calling
Something I can do to change this moment
Stay close to me while the sky is falling
Don’t wanna be left alone, don’t wanna be alone

[Chorus]
Hearts break, hearts mend
Love still hurts
Visions clash, planes crash
Still there’s talk of
Saving souls, still the cold
Is closing in on us

We part the veil on our killer sun
Stray from the straight line on this short run
The more we take, the less we become
A fortune of one that means less for some

[Chorus]

Confirmation: Maxwell International To Close

About three months ago I was the first to break the sad story that the Maxwell Baha’i school in Canada would be closing after 20 years of operation.

Almost immediately, a group of students, faculty, alumni, student families and well-wishers joined together to come up with ideas to save the school. They wrote a proposal that would result in the continuation of the school and sent it to the national administrative body in charge.

Unfortunately, their proposal was rejected and the decision to close Maxwell Baha’i School was reiterated and finalized by the National Spiritual Assembly of the Baha’is of Canada.

In their letter (see below), the NSA refers to the lack of funds as one of the primary reasons for the decision. As I mentioned in my first story, the fund is really the heart of the matter here.

The Canadian Baha’i community, as well as the US counterpart are undergoing a severe cash crunch. Donations have fallen dramatically over the years and the NSAs have been reluctant or unable to cut back. But as with the decision to close Maxwell, difficult options are being forced on them.

While this specific cutback is a tragic setback for the Baha’i community in Canada (and the world, since Maxwell had international students)… the bigger picture beckons.

Why is the fund persistently low? Are the resources of the Faith being managed as best as they can be? What, if any, is the silent message that the Baha’i community as a group may be sending the administration by reducing their donations?

maxwell-school-closes.png

[Note: bolded text is my own emphasis]

24 January 2008 / 6 Sovereignty 164

Dear Friends,

The National Spiritual Assembly warmly appreciated the proposal and supporting documents forwarded for consideration at our January 18-20 meeting. You have made extraordinary efforts to meet the National Assembly’s request for additional information related to your December 2007 proposal to continue the Maxwell International School as a Baha’i-inspired project, and have gained substantial support for the school’s continuation.

The National Assembly gave careful and detailed attention to your proposal, including financial resources available to you, recruitment strategies, governance structure and management expertise. We have concluded with regret that your submission is not sufficiently viable to allow the school to succeed in what you describe as a highly competitive international market and ensure the security of the sacrificial investment of the friends in the project. In addition, it still calls for substantial investment on the National Assembly’s part over a number of years, in the form of lost revenues. The funds of the Faith cannot be used to undertake the commitments you would require, nor could the National Assembly accept the implied moral responsibility for the success of the project.

The Assembly is not asking you to revise and resubmit the proposal, as it is not in the best interests of the school or the Faith to prolong this process. Nonetheless, our representatives would be happy to meet with you in due course to answer any questions you may have. In the meantime, should you wish to offer explanation of the National Assembly’s decision to other Maxwell supporters, we would appreciate your using this letter, in order to avoid misunderstanding and promote unity.

With warmest regards,
NATIONAL SPIRITUAL ASSEMBLY OF THE BAHA’IS OF CANADA
Karen McKye, Secretary

cc: National Spiritual Assembly (9)
Board of Directors – Maxwell International School