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.