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Dissension and Fiscal Woes Beset the Girl Scouts

by David Crary
Monday Jun 24, 2013
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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, a ring of Scouts clasp hands and give a little squeeze, accompanied by a silent wish of good will.

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 grassroots 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 were expected in August to offset the revenue losses.

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, despite the various problems.

"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 what they describe as a "complete transformation" aimed at making their programs and image more relevant to a diverse population of girls and parents. Changes have affected uniforms, handbooks, merit badges, 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, and 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.

"From a commercial standpoint, the Girl Scouts are not readily distinguishable from Dunkin’ Donuts," the court wrote in its opinion.

Also refusing to merge was the council led by Nelles - the Farthest North Girl Scout Council in Fairbanks.

Nelles, who contended that realignment weakened local control while saddling councils with new financial burdens, 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 a liability they had not agreed to fund.

According to the suit, 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.

One of the Tennessee council’s lawyers, James Bristol, stressed that his clients were not seeking money from the GSUSA, but rather wanted to negotiate a remedy.

"They would not negotiate," Bristol said. "They’ve told us, ’We’ve got this under control.’"

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 local councils to consider selling off old summer camps, both to gain revenue and reduce maintenance costs.

In many states - including Iowa, Ohio, New York, Alabama and Missouri - the sell-off plans provoked intense debate. Pro-camp activists argue that camping is integral to the Girl Scout experience; local leaders contend that today’s girls are less keen on camping than their predecessors.

A decision by the Girl Scouts of North East Ohio to close several camps prompted a lawsuit by disgruntled adult members, as well as calls for a boycott of cookie sales. The gap between the sides was summarized on the website of Trefoil Integrity, formed by some dissident members.

"The board believes that classes in leadership, financial literacy, and robotics competition are what girls need," it said. "Camp supporters believe that leadership is learned through the experiences of real living ... Children need camps as places of quiet, of basic challenges, of connection to nature."

Chavez said the GSUSA respects the views of dissident alumnae and adult volunteers, but is convinced it’s making the right choices on behalf of today’s girls by offering a balanced program that will produce future leaders.

"Camps will always be part of our mission," she said. "But girls aren’t living in the past - they’re living in the future."

A Girl Scout herself while growing up in Arizona, Chavez, 45, took over as the GSUSA’s first Hispanic CEO after serving as chief executive of Girl Scouts of Southwest Texas. She’s pleased by a 55 percent surge in the number of Hispanic Girl Scouts since 2000.

Under her leadership, a new set of handbooks seeks to nurture such attributes as environmental awareness, healthy lifestyles and critical thinking. New programs seek to boost girls’ competency with money matters and encourage them to pursue careers in science and technology.



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