June 24, 2013

Girl Scouts of the USA facing financial woes, leadership rifts

The organization's national leaders and critics all cite their devotion to scouting.

By DAVID CRARY The Associated Press

Given the friction and financial woes facing the Girl Scouts these days, perhaps it's time for a giant friendship circle. Under that long-standing tradition, Girl Scouts form a ring, clasp hands and give a little squeeze, accompanied by a silent wish of good will.

click image to enlarge

Wrapped in boxes emptied from earlier cookie sales, Girl Scouts from Troop 20337 in Eugene, Ore., fan out on the University of Oregon campus in search of more cookie customers. One year after the organization celebrated its 100th anniversary, even the proceeds of cookie sales are being questioned as to what they support.

The Associated Press

click image to enlarge

Maria Chavez

Just a year after its centennial celebrations, the Girl Scouts of the USA finds itself in a different sort of squeeze. Its interconnected problems include declining membership and revenues, a dearth of volunteers, rifts between leadership and grass-roots members, a pension plan with a $347 million deficit, and an uproar over efforts by many local councils to sell venerable summer camps.

The tangle of difficulties has prompted one congressman to request an inquiry by the House Ways and Means Committee into the pension liabilities and the sale of camps.

"I am worried that America's Girl Scouts are now selling cookies to fund pension plans instead of camping," wrote Rep. Bruce Braley, D-Iowa, in a letter last month to the committee chairman.

Compounding the problems are tensions at GSUSA headquarters in New York, where several senior executives have quit or been ousted since Anna Maria Chavez took over as CEO in 2011.

Last week, some of the roughly 325 employees there were invited to take early retirement, and Chavez said an unspecified number of layoffs is expected in August.

Chavez insists the GSUSA is on the right track, although she acknowledged that sweeping changes in structure and programs over the past 10 years have been difficult for many in the Scouts' extended family.

"Change can be unsettling and it is not surprising that some would prefer for us to remain static," she said. "But doing so would be a disservice to girls who need us now more than ever."

Indeed, there's a common denominator between the GSUSA leaders and their critics -- earnest expressions of devotion to the Girl Scouts and fervent hopes that it manages to thrive.

"I care so much about this organization, and that's why I hate to see it pulled down," said Suellen Nelles, CEO of a local council based in Fairbanks, Alaska. "We have leadership at the top who are toxic to this organization and need to go."

Connie Lindsey, the president of GSUSA's governing board, said the board had confidence in Chavez.

"Our board supports our CEO," said Lindsey, a corporate executive from Chicago. "We know it's a difficult charge we've given her."

Since 2003, the Girl Scouts have undergone a thorough transformation aimed at making their programs and image more relevant to a diverse population of girls. Changes have affected uniforms, handbooks, program materials, even the logo and the fine print on the boxes of Girl Scout cookies.

"Our brand, as iconic as it is, was misunderstood -- it was dated," Chavez said in an interview in her Manhattan office Friday.

Yet today the Girl Scouts have about 2.2 million youth members, down from more than 2.8 million in 2003. Donations to the national office and local councils plunged to $104 million in 2011 from nearly $148 million in 2007.

The biggest change -- implemented from 2006 to 2009 by Chavez' predecessor, Kathy Cloninger -- was a realignment that slashed the number of local councils from 312 to 112. It was intended to increase efficiency, but resulted in the departure of many longtime employees and volunteers.

A handful of councils resisted. One of them, the Manitou Council based in Sheboygan, Wis., sued to block its merger in 2008 after negotiations failed to resolve its concerns. The council argued that it deserved the same protections as a for-profit franchise operator, and in 2011 the 7th U.S. Circuit Court of Appeals agreed.

Also refusing to merge was the Farthest North Girl Scout Council in Fairbanks, led by Nelles. She says she's been ostracized by the national office.

"Questioning authority is very much frowned upon," she said. "If anyone resisted them at any point, they said we just wanted to hold onto the past."

Among other consequences, the mergers affected the Girl Scouts' national pension plan, because many employees were added to it as an inducement to take early retirement.

One council, the Nashville-based Girl Scouts of Middle Tennessee, is suing to get out of the pension plan. The lawsuit contends the GSUSA added as many as 1,850 employees to the plan who hadn't contributed to it, leaving local councils with an unplanned-for liability.

The suit says the pension plan had a surplus of more than $150 million in 2007. It now has a deficit of about $347 million, according to GSUSA figures.

The GSUSA has filed a motion for the case to be dismissed.

It is also asking Congress to pass legislation that would provide relief by stretching out the timetable for local councils to pay into the pension plan. Without such relief, councils could face a 40 percent increase in pension expenses next year, and be forced into layoffs and program cuts, according to GSUSA.

Financial stress already has prompted many councils to consider selling off old summer camps, both to gain revenue and reduce maintenance costs.

The Girl Scouts note that many youth organizations have been losing members, for a variety of reasons. The Boy Scouts of America's youth membership declined from 3.3 million in 2002 to about 2.6 million last year.

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