Dissension at DAN???

[Genesis]

it is with the mandatory "donation" to DAN, which is NOT buying insurance, that I must pay in order to buy that insurance.

It is their coupling of the two that leads me to ask the questions. If I was just buying insurance, then I would care only that they paid claims promptly and properly - that is, that their insurance is "good".

But I'm not just buying insurance. I'm also buying a membership in an association, which provides me no insurance benefits.

Since I am required to belong to their association, however, in order to BUY that insurance, I now have a stake in the association as a dues-paying member.

Thus, the questions....

(If I could buy just the insurance and not the membership, that would allow me to vote with my wallet on DAN-the-organization's policies without voting on DAN-the-insurance-company's policies. I am, however, forced to pass judgement on BOTH to get the insurance, even though the membership has nothing directly to do with that insurance!)

 

[Mo2vation]

Its a matter of perspective. For my $75, I expect nothing more than insurance. I get their rag...like I need another dive mag.

Their research doesn't deliver an order-of-magnitude impact on my life of diving - I'm not interested in all that. Like I said, if I'm bent, send the chopper.

I totally get the expecting more from someone compelling you to a "membership" to recieve insurance benefits. We just see the "investment" differently, that's all.

For me, its like Auto Club. I'm a member, I don't care what goes on behind the scenes (of course, if I had a say, they could trouble themselves to be open on Saturdays...) basically, just tow my car if it dies in the rain someplace.

Thanks, Gen.

K

 

[dvleemin]

Its one thing to say that all your buying is insurance, and that is certainly a good point.

But what really irks me is that a lot of dive clubs donate money to DAN. They don't get any benifit from that, and if that money is being used improperly, thats a serious problem.

Darryl

 

[DivePartner1]

If this works, attached is a link to FORM 990 Non-profits must file with the IRS for

DAN:
http://documents.guidestar.org/2001/561/696/2001-561696689-1-9.pdf

And International DAN.
http://documents.guidestar.org/2001/561/967/2001-561967904-1-Z.pdf

Prior years are also available on Guidestar. These were filed last January. It will be interesting to compare these to the 990's prepared by the new auditors.

 

[Genesis]

It appears that "Alert Diver" costs them about $689,000 a year in printing and mailing costs, or about $5 per member. That's not too horrible.

$185,000 in direct travel expenses, another $227,000 in convention expenses? A QUARTER OF A MILLION DOLLARS?!

I've done a number of conventions. How many does DAN do in a year? DEMA, yes. What else? How do you get to $250,000, just for direct convention expenses, not including employee travel associated with same? (that's under the travel line) I did an awful lot of pretty serious - and expensive - conventions in the $20-$30k cost arena, including significant expense on promotional items and technology spending that DAN would not need (e.g. dedicated T-1 service for three days - $2,000!), not including staff travel and lodging. $250,000 is a BIG number for this part of their budget; I'd love to know how they spent that much money there.

(Pretty nice "benefit programs" for those directors and officers too, eh?)

Then there's ITI, which made a cool quarter of a million in consulting fees. It would be interesting to know what they did in return for that money, considering that "Data processing" is a completely separate line item under "other expenses", and encompasses another $71,000.

Legal and account is spendy too, but not horribly so.

Now here's where things get a bit interesting.

They show $840,000 in "unrelated business taxable income", of which $650,000 is apparently the dividend from the insurance business. However, we don't know how much money the insurance business made, nor how much revenue it took in, or how many claim(s) it paid out. In fact, we know nothing about the operation of that insurance business. Is the $650,000 a "reasonable" payment for the mandatory tie-in of insurance and membership? There's no way to evaluate that.

Finally, the perhaps most telling, for a company with $8.5 million in revenues that is widely understood to be a research organization, they spent a grand total of $175,610 - on research.

Uh, excuse me?

TWO percent of their revenue?

Research is one of DAN's primary functions in life?

Uh, where's the research?

To put this in perspective, that is less than Mr. Bennett made in salary, and less than any two other executives or key employees together made in that same year, including salaries and benefits.

Its also less than they spent on self-promotion through their trade shows, less than they paid IDI for their "consulting", and less than one third of the "kickback" from their insurance subsidiary. They even got within reasonable distance with their legal expenses for the years, and between legal and accounting they spent more on those two functions by a wide margin than their research.

 

[fredfrick]

I looked at how much DAN spent on Research on the 990 forms.

In 2000, they said they spent $603,404 on Research. I don't know where you got the $175k. I found the $603k way back on page 17 (statement 9).

FYI they spent $752,752 (8.4%) supporting the 24 hour hotline(page 2, part IIIb), and $526,430 (5.9%) was spent on conducting Oxygen first aid, safety and continuing medical education training(page 17 statement 8)

looking at the 2001 IRS-990 form, I found that DAN spent $697,197 (7%) on research, $827,855 (8.5%) on the hotline and $516,336 (5.3%)on training and continuing medical education training.

 

[Genesis]

Statement 9 is the "program services" for continuing education and such (O2 first aid and safety training classes.) That's an expense offset by direct fees for the service (DAN doesn't provide the classes for free!); it is NOT research nor is it an altruistic part of their mission.

Look in Statement 8, "other expenses." You will find "Research" about 3/4 of the way down the page. $175,610.

BTW, even if you accept that the "Statement 10" number, without being broken down further, is directly attributed to "research" (I don't) that still ends up being only about 8% of their income. A paltry sum for an organization that claims this as one of their primary missions in life. I don't accept that allocation without proof.

You have to learn how to read these things. Part I and Part II outline ALL the organization's income and expenses. Everything in Part II must be either in one of the given categories, or broken down if it is not one of the "listed items." If it is not directly linked to Part I or II then its fluff.

The item you cite can include virtually ANYTHING (including a box of pencils) that they decide to allocate to "research", because it does not show up in Part II. There is no way to audit the entries in Part III, because there is no breakdown of the expenses claimed in each of those areas. As such the claims in Part III are unsubstantiated.

You can get some kind of an idea how they did this though. "Management and General" in Part II includes only $123,000 for salaries, as an example. So a good part of Bennett's salary (and an awful lot of the other staffers) is allocated to program services. Exactly how has Bennett, personally, contributed to "research"? Do the alleged "African and Alaskan trips" from the cited report count as 'research'? Hmmmm....

Therefore, one must look back to Part II for the HARD COSTS associated with various functions of the organization, and only there can you find the entries that can be DIRECTLY attributable to the particular functions the organization claims.

And it is here, on Statement 8, that you find the $175,610 expense for RESEARCH.

(This, by the way, is one of the problems with the 990. It does not force the breakdown of the items in Part II into each of the Program Services SEPARATELY in Part III, and it should. Without the worksheets that were used to complete the 990, you can draw only inferences about how the allocation was done and whether there's anything to it, or whether the org simply took a percentage of staff expense and stuck it on one program or another.)

This is the reason that when I examine a 990, if I can't identify something in Part II that DIRECTLY applies to the mission claimed, it doesn't count - unless the organization voluntarily expands on the 990-required disclosures.

I read these things all the time; I make a fair number of donations to charitable causes annually, amounting to a fair bit of money, and have gotten pretty good at going through 990s and ferreting out where the money's really going....