Here is BIZZYBLOGS response.
Deb Schlussel, Sean Hannity, and the Freedom Alliance: More Info, Please
By TBlumer on US & Allied Military
That this blog has not been particularly Sean Hannity-friendly is not exactly a secret (also see the last item at this link).
That said, I'm not about to jump on board with Debbie Schlussel's explosive charges (follow-up post here) about the Freedom Alliance and Hannity's association with it — yet.
My quiet reaxes to that relationship and the growth of the Freedom Concerts over the past several years have been:
1. Hannity and/or his peeps had better be checking up on these guys.
2. They're going through a lot of money; I hope they're also netting a lot in the process.
3. I hope they're accurately communicating what they're doing.
4. I hope Sean isn't personally benefitting from this (other than positive feedback by association, to which he's entitled), and avoiding any hints that he might be.
5. I hope the entertainers are deeply discounting their normal appearance fees (not directly addressed in this post).
Based on Schlussel's work, the answers to my long-held concerns so far appear to be:
1. It seems doubtful.
2. They're not netting as much as they want you to think they are, and they may be clearing less than such an operation should be.
3. Not really, and not well.
4. Hard to tell, based on evidence presented.
5. Needs to be investigated.
Debbie is way off on a couple of points.
First, her claim that "a charity is considered reputable if no more than 25% of its revenue goes to expenses and no less than 75% of it goes to the intended charity recipients" doesn't fly for an operation like this one. Just doing the math on one concert will demonstrate this.
The Cincinnati venue has a capacity of about 9,000. If 8,800 people (after considering comps) pay an average price of about $85 per ticket (estimated based on this price structure and this seating layout), that's a rounded gross of $750,000.
You're not going to get the costs of pulling off a massive project like this for less than $190,000 (25% of $750,000, rounded). You'll be lucky if you can get it done for double that, and a 50% or even 70% result would by no means be "disreputable" — and that's before paying the day-to-day costs of running the charity. Doing concerts IS a high-cost method for raising money, and we could have a separate debate for days about whether this is how to go about accomplishing a given charitable objective. But it's a method that's used all the time, and FA should not be presumptively faulted for employing it.
The 2006 tax return to which Debbie refers shows that FA's expense ratio for that year was 65.3% ($7.065 million divided by $10.823 million). Of the $3.758 million left over, the vast majority of it (over $3.5 mil) went into investments set aside and intended to grow for when intended beneficiaries go to college. Additionally, the return shows just under $400,000 disbursed to beneficiaries that year, reducing the true operating expense ratio to 61.6%.
Those are NOT presumptively awful results, but they don't absolve FA from being frivolous with its funds (there are indeed major amounts going to "consultants," which may or may not be appropriate in the circumstances) or being parsimonious in its benefit-granting decisions. I consider both items at this point to be serious charges backed by incomplete evidence.
Second, Debbie hurts herself with her ad hominems against some of Sean's defenders. You don't need to do that to make your point, Deb, and it turns off people who might otherwise be receptive to your arguments (potentially including me).
But the Alliance's response has been far from satisfactory. In fact, given the opportunity, FA seems to have deliberately avoided telling people about their 60%-plus expense ratio. Hannity's defenders are mostly using the "Sean's a good guy, this can't be true" line, which is understandable, since they aren't involved in FA's operations, and I don't necessarily fault them for that — yet.
Schlussel has promised more. She needs to deliver, because what she has given us so far, while compelling, is not a comprehensively convincing indictment.
But Hannity and FA bear a heavier burden, regardless of whether Schlussel firms up her case. I will be firmly in the FA doubters' camp if they can't or won't produce more than a "we're really good guys, just ask us and our buds" defense. And I wonder how many Freedom Concert attendees would be impressed by a statement accompanying their tickets that "less than 40% of the cost of this ticket will go to program beneficiaries and investments made on their behalf." |
