William Burton is back! It’s strange but he’s another one of those liberals that I largely agree with. Maybe a legitimate third party is possible?

Ok, the speed of gravity is equal to the speed of light. And Einstein wins over Newton. I find it interesting but really don’t know what it means in terms of practical application.

I heard on the radio that Bill O’Reilly has decided to take on the ACLU. He has a good strategy, which is to look at their finances. If you want to uncover questionable (and sometimes illegal) activities about entities, start looking into their finances. Given my passing interest in the ACLU, this sparked my attention. I’ve stated before that if they changed their position on the Second Amendment, I’d likely become a card carrying member. I’ve changed my mind and have decided that they are basically fanatical bullies who pick on the little people.

For example, they threaten to sue a financially poor county in Georgia that lacked the funds to fight the ACLU because the school listed on their calendar the phrase “Christmas Holiday.” So, rather than spend money on the lawsuit that they couldn’t afford, the school caved and removed the phrase. Never mind that the ‘Christmas Holiday’ is federally recognized and signed into law. They, however, did not threaten larger counties in Georgia who could fund a legal battle.

Another example of the total lack of sense inherent in this fascist organization is supporting the North American Man Boy Love Association. Yes, NAMBLA has a right to say things. NAMBLA doesn’t have the right to say things about how to seduce children and get away with it. And they defend the KKK’s right to spew racist rhetoric.

A quick look at some of their financial data (which you have to get from the Better Business Bureau because the ACLU doesn’t provide them on their site) reveals some interesting things:

There are two organizations, the ACLU and the ACLU Foundation. The ACLU is a 501C4 company (which means that contributions to it are not tax deductible since it engages in lobbying) and the ACLU Foundation is a 501C3 company and contributions to it are deductible since the entity engages in charitable work. Per the ACLU, the reason for this difference is:

. . . because the ACLU engages in substantial legislative lobbying, which cannot by law, be supported by tax-deductible funds. The ACLU Foundation, on the other hand, conducts our litigation and communications efforts, and contributions to it are tax-deductible.

This arrangement, though not illegal, is certainly questionable since it would likely be easy to find instances of intermingled funds.

The BBB and O’Reilly had trouble getting the ACLU’s financial statements. Non-profits are required by law to provide copies upon request of their Form 990 (basically a tax return for non-profits). Apparently, the ACLU wouldn’t give out their annual report. This could indicate that they’re hiding something. The 990 and financial statements are separate animals, but disclose almost the same information.

The BBB has standards for rating charities. The ACLU Foundation (the charity portion) was evaluated as not complying with the following BBB standards:

A1: Soliciting organizations shall provide on request an annual report. The annual report, an annually-updated written account, shall present the organization’s purposes; descriptions of overall programs, activities, and accomplishments; eligibility to receive deductible contributions; information about the governing body and structure; and information about financial activities and financial position.

The Alliance requested, but did not receive, a current annual report from the American Civil Liberties Union Foundation.

B1: A reasonable percentage, at least 50%, of total income from all sources shall be applied to programs and activities directly related to the purposes for which the organization exists.

According to its audited financial statements for the year ended December 31, 2001, ACLU Foundation spent $15,777,568, or 36%, of its total income ($44,030,434) on program expenses.

B2: A reasonable percentage, at least 50%, of public contributions shall be applied to the programs and activities described in solicitations, in accordance with donor expectations.

According to its audited financial statements for the year ended December 31, 2001, ACLU Foundation spent $15,777,568, or 37%, of its total public contributions ($42,393,279) on the programs and activities described in solicitations.

Why is the ACLU hiding its financial statements from the BBB and O’Reilly? Maybe they have something to hide. Of course, a request for their tax returns must be met or the ACLU will face penalties.

And the ACLU will apparently sell their member list to other non-profit companies.

The ACLU is very profitable (which is easy to do since they are not using their funds to support programs but to increase net assets). In 2001, the ACLU had $23,913,145 of income in excess of expenses. Most of their funds go to increasing net assets and not any sort of charitable work. What are they using these profits for? I could speculate they use those profits from its charity side to fund its lobbying side. I don’t know if that is the case. The lobbying portion made $1.3M as well. Defending our rights is a profitable business.

I hope that O’Reilly’s assault on the ACLU results in them not engaging in such strong arm tactics against poorer entities; and in the ACLU supporting causes that are morally correct. The ACLU should have distanced itself from NAMBLA for appearance’s sake if nothing else.

If that happens, maybe they can work on the Second Amendment thing.

People like to scream about the national deficit and national debt. Unfortunately, most folks don’t know what the terms mean. So, in simple terms:

Deficit: Amount of expense that exceed revenue. In 2001, the deficit was $515 billion.

Debt: The actual amount of cash-money owed to some other entity(ies).

I often tell people that the National Deficit is made up. Here’s why: In 2002, the government reported interest on debt of $332,536,958,599.42. Yup, looks like a ton of money. Here’s the thing though. It’s not money. It’s expense. This expense is about 5% of some astronomically huge number ($6,228,235,965,597.16 to be exact). But this is not the actual cash impact of the debt. Think of it this way, you buy a car for $20,000 at 5% interest. Your annual interest expense is $1,000. It doesn’t matter if you’re paying a $400 a month car payment. So, interest expense has no impact on cash flow. In fact, several transactions have minimal impact on cash flow. Since we all know the government isn’t paying any of this back until they have to, the cash impact is usually minimal. In terms of trillions of dollars, what’s a few million?

To wit, here is a brief analysis based on the US Government’s 2001 financial statements (in billions):

Net Cost (514.80)
Net cash effect of changes in:
Military Employee Liabilities 406.80
Veteran Liabilities 139.30
Civilian Employee Liabilities 50.10
Environmental Liabilities 5.70
Depreciation 21.40
Benefits Payable 8.10
Taxes Receivable 2.20
Other Liabilities 13.10
Other Miscellaneous Liabilities 12.70
Plant, property and equipment (34.40)
Accounts receivable (1.90)
Inventory 1.40
Other assets (3.70)
Principal payments 19.90
Other Differences 1.10
Total Impact of non-cash: 641.80

Budget Surplus: 127.00

Despite having a deficit of $515 billion, the changes in non-cash transactions show us that the government is actually cash flowing. Plus, if you add back the $217 billion in FY01 on interest, well you get the idea.

SayUncle’s Free Advice: When looking at financial statements of any entity, the statement of cash flows is the best way to determine a company’s financial condition. You see where the cash comes from and where it goes. Forget income and forget the balance sheet. They’re made up. Cash is where it’s at. Which is way your investor types like to use EBITDA (earnings before interest, taxes, depreciation, and amortization) because this is essentially a quick cash flow measure that you can do using the income statement. You take earnings (income) and add back interest, taxes, depreciation and amortization since these types of transactions are non-cash in nature. Also, the changes in balance sheet accounts can show cash flow issues. For example, if accounts receivable are higher in the current year than in the prior year, the company has collected less cash from sales. Hope that wasn’t too damn boring!

So that SayUncle could take a break from the world. I’m on a brief vacation and will resume Monday. Adieu!