According to Charity Watch, a group that analyzes the financial information and spending of non-profits, the most highly efficient and effective organizations should spend at least 75% of their expenses on program costs that go toward the organization’s mission, with only 25% going to administrative costs.    Organizations that spend only 60% on program costs are considered satisfactory, and given a C rating.  Anything lower than that,  and the non-profits are given an unsatisfactory rating.

Charity Navigator uses a similar rating system for non-profits.  “We believe that those spending less than a third of their budget on program expenses are simply not living up to their missions,” says Charity Navigator on its Financial Ratings page.  Those “demonstrating such gross inefficiency receive a 0-star rating for their Financial Health.”

JobsOhio, a “non-profit corporation designed to drive job creation and new capital investment in Ohio”, released its annual report this week with information on its spending from July 1st, 2013 through December 31st, 2013.   Out of the $4,861,000 they spent during that time period, a whopping 92% went to administrative costs like salaries, administrative costs and professional services, and only 8% going to “economic development programs”.

Here’s the breakdown of JobsOhio spending for the last six months of last year:

  • Salaries and benefits:  $1,754,000
  • Professional services: $1,348,000
  • Administrative and support: $905,000
  • Marketing: $454,000
  • Economic development programs: $400,000

Yes, you read that correctly.

In the last six months of last year, JobsOhio spent nearly $1.8 MILLION on salaries and $1.35 million on consultants (friends? family? we don’t know) while spending only $400K on economic development programs.   In other words, JobsOhio is spending over eleven times more on salaries and administrative costs than it is on its core mission.

If JobsOhio was a charity, it would absolutely receive an F rating for “demonstrating such gross inefficiency.”

But since it’s a non-profit created by John Kasich and the GOP-Controlled legislature, JobsOhio gets praise from the Governor of Ohio during his State of the State speech, JobsOhio gets a pass on its long list of failed investments - all this while Ohio drops to near last for job creation compared to other states and our unemployment rate continues to rise, staying above the national average for months.

JobsOhio will continue to put out these fancy year-end reports with lots of pretty pictures and quotes from the Governor about how awesome they are doing.  They will continue to spin the numbers in their favor by only comparing Ohio’s job growth against neighboring states instead of against the national average, and by highlighting job growth numbers that include 2011 – when Ohio was still on an upward job creation swing and JobsOhio and Kasich’s policies had yet to be implemented.   They will completely fail to mention the ROI indicators that they were using in their earlier reports, but then removed when the ROI turned out to be awful.   And they will completely fail to mention anything about Ohio’s rising unemployment rate.

Yes, JobsOhio will continue to try to convince Ohio’s that they are delivering us the Ohio Miracle promised to us by John Kasich.

Sadly, it’s just not true.

Evangelize!
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  • dmoore2222

    Isn’t this the same guy who rails against wasteful government?

  • Diana Grace

    Why isn’t Mike DeWine, who’s office is charged with overseeing charities in Ohio investigating this? My guess is that he never will, because he’s a pipsquirt who goes after little things, this is too big for him and the little minds at his agency. Vote for Pepper in 2014!!

  • DublinIrishBob

    Well, I am sure The Dispatch will call for Sate Auditor Yost to investigate this! These numbers are worse than the Columbus Schools crisis.

  • Big Brent

    The discussion above simply does not tell the full story. Here is a
    link to the report
    http://www.dispatch.com/content/downloads/2014/03/JobsOhio-Annual-Report-2013.pdf
    – see page. 55 for the financial information.

    I have attached the overview below, but essentially JobsOhio (the parent) is siting on a cash position of about $178 million (see page 58). What they have not done yet is roll these funds out to the public. What they have done is (a) continued to administer the State’s existing programs (including its loan and grant funds) and (b) continued to market the State of Ohio.

    If they can be chided for anything, it is the slowness of the roll out
    However, if one looks at the statement of net position, the potential is
    there, and they are not just handing out dollars. It should also be kept in mind that any expenditures that JO has made are expenses that are not being made by the State:

    Here is an excerpt from the report:

    OVERVIEW

    In 2013, JobsOhio and JobsOhio Beverage System (JOBS) effected major changes in their funding structures with the acquisition of the state’s liquor business. On February 1, 2013, JobsOhio and JOBS purchased from the state a 25-year exclusive franchise for the sale of spirituous liquor in the state, and paid the state $1.42 billion, plus potential deferred payments based on future liquor profits. To finance the franchise purchase, JOBS issued $1.51 billion of special obligation
    revenue bonds in a private debt offering. JOBS receives all revenues
    from the distribution, merchandising, and sale of spirituous liquor in
    the state of Ohio, and these revenues back the bonds issued. The
    franchise is the sole asset of JOBS, which operates the liquor
    enterprise through a contract with the Department of Commerce’s
    Division of Liquor Control.

    After paying operational costs and debt service on the bonds, JOBS grants the enterprise’s profits to JobsOhio for economic development activities. Total grants to JobsOhio during fiscal year 2013 from JOBS
    were $185 million, composed of liquor enterprise profits and bond proceeds.

    Concurrently with the purchase of the franchise, JOBS terminated its existing grant arrangements with the Ohio Development Services Agency and voluntarily returned to the state all support and grant funds, totaling $7.2 million since JobsOhio was established on July 5, 2011. In addition, JobsOhio voluntarily returned $1.7 million in state support
    . .

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