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Resources — April 8, 2014 at 10:48 am

The Double Standard

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coverpost

Last month the Portland Hotel Society, a nonprofit working with the poor in Vancouver’s Downtown Eastside, came under scrutiny after a government audit revealed some questionable spending. Two directors at the head of PHS were given an ultimatum: either step down or the society will lose its government contracts. The directors decided to step down.

So what were they spending money on? The report has been made public and the list has scandal written all over it: limousines, fancy hotels, trips to Europe and expensive dinners. But while at first glance this seems like a case of directors misusing the funds and the responsibility given to them, a closer look at some of these costs in context aren’t quite as shocking.

 

Context Matters

Let’s start with $1,807.68 listed for a staff Christmas Dinner. Maybe that number seems high on first glance, but when you factor in the knowledge that PHS lists 339 full time staff on their most recent tax return, that number isn’t so crazy. Even if only 100 people showed up for that Christmas party, that works out to $18/person, hardly an extravagant price.

How about those trips to Europe? A trip to Austria is recorded as $5,850.20. Let’s break that down: say two people took the trip. Round trip flights from Vancouver to Vienna start at $1,400 per person, so there’s half of your cost right there, even before getting into hotels, transportation and food. And travelling to Austria “to teach harm reduction practices” is not an illegitimate business expense.

The “limousines,” as Executive Director Mark Townsend explains, are ground transportation– in this case a mini bus– insured as limousines due to their capacity. Context matters.quote

Or what about the worst offense of all: the dreaded family trip to Disneyland? This seems like an obvious affront, right? Yet there are plenty of guides out there on how to double your family vacation as a business trip to be able to maximize write-offs.

It’s worth noting that PHS is by no means a small organization. Their annual revenue is around $30 million, and the expenses listed here amount to about $50,000, or less than 0.2% of their annual budget.

 

Charitable Scrutiny

Of course, there are some charges that are less defensible, like the large charges for hotels, upwards of £478 per night in some cases. (Although I do wonder if there would be the same kind of fuss for an executive on a business trip for a bigger charity such as Vancouver General Hospital or the University of British Columbia.)

Would these expenses be questionable if they were for a bigger organization? Would they still be upsetting if they were for a corporate foundation that wine and dines wealthy philanthropists to secure large donations and not for a charity that works directly with the poor?

Do we hold charities to a higher standard because they are funded by donations and government grants? Absolutely.

Is this fair? It’s hard to say.

 

A Higher Standard

What’s certain is that it makes working for a nonprofit incredibly difficult. If you work for a large business, a Christmas dinner, an expense paid trip to a conference once a year, and hey, maybe even a limousine ride on a special occasion are some of the perks you might enjoy– but you don’t have to worry about losing your job over it.

If you work for a charity you’re expected not only to take a pay cut, but if the company wants to honour you with a baby shower or help cover some funeral expenses (yes, both of these are listed as “questionable expenses” for PHS) then you can expect an audit and an ultimatum.

I’m not saying that PHS didn’t make any mistakes or that some of these expenses are not questionable; I am saying that we hold charities to a higher standard, one that we don’t hold to ourselves in our “regular” businesses, and that is making it harder and harder for charities to do their job, and more importantly, attract the right talent to be able to make a difference in the charitable sector.

3 Comments

  • Wrong. If one doesn’t like a private charity, one has the option to give no money to it; if one doesn’t like a “regular” business, one can boycott it. With a State funded service provider like the PHS, one does not have that option short of tax revolt. Therefore, we have two distinct and separate standards, not a double standard. Further, there were two attempted audits; both times, according to the “scope limitations” of the audits, there was scant bookkeeping and receipts provided. We really have only a few dozen snapshots of the Wolf of Hastings Street. Also, I did not know that Disneyland had a massive injection drug problem – quite a story if it does. And, call it a limousine or a minibus, why is it travelling from Whistler, to Grouse Mountain and back to a director’s house? You folks should just accept that this is one of those unspinnable events like Jim and Tammy Fay Bakker. You got burned. You’re damned lucky the police aren’t investigating – for now.

  • It’s clear that PHS made mistakes and was sloppy at keeping records and receipts– which cost two directors their jobs. I’m not arguing that. What I’m arguing is the view that if you work for a charity, you are expected to work long hours for lower pay than if you worked for a for profit company, and don’t even think about enjoying any sort of employee perks like benefit packages or work Christmas parties.

    We are far too critical of charity employees who at the end of the day are employees who have chosen unglamorous work and often get punished for it.

    I’m not sure who you’re referring to as “you folks.” I work at an office that gives me vacation time, benefits, paid dinners and taxi rides home from Christmas parties, paid conference trips, and no one will ever blink an eye at that because I don’t work for a charity. But I do advocate for them, because they get the short end of the stick all the time.