Below are two charities that have shared with me their Fiscal Year 2019 numbers.
Charity A. On sales of $2.8 million (a decrease of $90,000 from FY2018) they got $45,000 to the bottom line for mission and community after paying prizes ($2.4 million), expenses ($220,000) and taxes ($135,000). Netted 1.6 cents on every dollar wagered, down from 1.7 cents in FY2018. Paid the state 4.7 cents per dollar wagered (nearly three times what they made). Paid $59,000 in rent or 2 cents per dollar wagered.
Charity B. Increased sales over FY2018 by $600,000 to $4.7 million. Netted $136,000 for donations after paying prizes ($4.1 million), expenses ($281,000) and taxes ($183,000). $136,000 sounds like a lot of money doesn’t it? What could be wrong with having that much money to help mission and community? Let us peel the onion back a little further. Profit per dollar wagered down from 3.1 cents in FY2018 to 2.9 cents. Paid the state 3.8 cents per dollar wagered. How about what they netted on the increase of $639,000? Cleared $8,700, a whopping 1.3 cents per dollar wagered. Paid the state $33,000 more or 5.1 cents per dollar wagered. Paid the site $11,400 more or 1.7 cents per dollar wagered. Paid e-revenue share $14,000 more or 2.1 cents per dollar wagered. The charity made the least on every dollar of the increase.
How did we ever get to a place where the state makes 4 times what the charity does on increased sales? We are continuing our slide down the profit ladder each and every fiscal year. And remember, these results are coming in at a time when the economy is as strong as it’s ever been. What’s going to happen when the economy slows and people have less discretionary income to spend? The future for our charities and the communities that we serve is not bright.
Charities outside of Minneapolis/St. Paul are to be commended and thanked. The money that you send to St. Paul every month is very much appreciated. That collectively you are sending in over half of what you have left after paying your expenses is remarkable considering the needs in your own community.
Minneapolis surely thanks you as they were supposed to start paying into the Vikings’ stadium fund (8 years after you did), but they are now asking for that IOU to be ripped up as you are more than covering the bonds (actually double what is needed).
Those buying luxury suites at Vikings’ stadium (for up to $35,000 per game) surely thank you as the sales tax that they would have been paying on the cost of those suites (that would have gone into the Vikings’ stadium fund) has never been turned on as you are more than covering the bonds.
The Wilf family surely thanks you as the city that they are building (practice facilities, offices, hotels, restaurants and shopping) just east of the airport would not have been possible without your financial support.
Send me your FY 2019 numbers if you would like me to review them.