Financial information has to be reduced to the simplest possible form for me to follow. Fortunately, a reader, Brian, has been extracting the data from Answers in Genesis’s Form 990 tax information, and this chart tells me what I need to know.
The key thing is the lowest, gray line: that’s the revenue from the Creation “Museum”. The yellow line above it is the Creation “Museum’s” expenses. Now I’m no economics whiz, but it seems to me that having expenses that are significantly greater than revenues is a bad thing. The top two lines are overall expenses and revenues, and notice that revenue dropped below expenses in 2010.
Brian’s conclusion:
The most interesting conclusion I have come to is that the Ark Project is quite clearly an effort to gain a massive cash injection into the organization given the losses they have been sustaining due to the Creation Museum’s operation.
Losing the tax incentives from the state must have AiG’s administration freaking out — and they must be aware that construction is going to be a massive upfront expense, and they’re gambling on it providing increased revenue in the future. But notice that the Creation “Museum” itself has never provided a net profit to the organization, so why would they expect that an even bigger invest will finally start bringing in more money?
Doesn’t that merely reinforce what you were nearly certain of from the start? Clear indication of a failed notion.
Non-profits aren’t supposed to make a profit, but it’s definitely a bad thing if their expenses exceed their revenues for an expended period of time. Although the lower lines do make it look like the museum is losing money, there’s a clear spike in AIG revenues which tracks the museum opening and revenue, implying that the museum is causing people to donate more money to AIG–that is, they want AIG to spend their money on something other than the museum. So in that sense, the museum was a huge success for them. So I don’t agree with Brian’s conclusion.
The Ark Park is also pretty much in line with the “mission” of the creation museum: deceive people (especially children) by presenting showy spectacles which back up the poor science. What I’m getting from what I read is that the Ark Park is not likely to result in a net increase in revenues as the idea is that people will come to tour the unfloatable boondoggle but stay to spend money in the restaurants, campgrounds, and theme park. Successful theme parks are notoriously expensive and hard to run. I wouldn’t want to play in Disney’s sandbox if I were them.
Ummm…Because fucking hope springs eternal?
Oh, rhetorical…
Nah, I prefer less risky investments like throwing coins into a wishing well
Probably not.
They are just freaking out because freaking out is what they do.
If I got the story right, they get a 1.5% sales tax break, lowing their sales tax from 6% to 4.5%. It’s on the gross receipts so it is a good deal.
But that only lowers their gross returns by 1.5%. If your gross profit margin is only 1.5% you are in huge trouble. Theme parks like Disney usually get 10-15% gross margins.
It’s really a nonissue except so xians can whine about something.
Not a problem. In donations and junk bonds, they have raised ca. $70 million. That is a lot. It’s not enough but that isn’t a problem either.
This looks like an affinity group scam. Follow the money!!!
It wouldn’t surprise me if they just stall, play around, and run out the clock. They will probably even start building something. Meanwhile paying a lot of people great salaries with bonuses and perks, and bennies. And if it goes under so what? Didn’t you read the prospectus? It said it was risky. This procedure is, in fact, a highly developed science invented on…Wall Street.
Meanwhile, the freeway offramp improvements, utility and road improvements and land have value. They can put up a housing development and jesusland condos afterwards.
That $70 million isn’t going to disappear. But you know it will end up somewhere and so does anyone else connected to this project. The competition to have it end up in your bank account must be intense.
No matter how hard AIG tries they’ll never be “too big to fail.”
I have to wonder how much of those expenses go to Ken Hamm’s salary? I’m sure he wouldn’t let his tanking “ministry” to get in the way of making a hefty profit for himself, even if the business is a non-profit.
So is this an example of the Magic Hand of the Free Market &tm; ? or is this another example of those evil liberals driving out good conservatives with boycotts?
Meanwhile, the freeway offramp improvements, utility and road improvements and land have value. They can put up a housing development and jesusland condos afterwards.
This is a really insightful point. And I’m sure that the same people profiting off AIG donations now will have very close ties to whatever company buys up those assets. It would be interesting to see how they expect to get around zoning issues – but of course you can easily get secular venture capital into a housing development in a way you can’t with a theme park.
@Artor, #8
http://www.charitynavigator.org/index.cfm?bay=search.irs&ein=330596423#.VMU7Tv4c6Sp
Under “990.” Free registration. Knock yourself out.
(It’s $193,361)
1. You don’t have to guess. It’s all there in the reports to the IRS. What you need to do is read it and add up numbers.
2. I’m guessing it is around $1 million. Guessing because I’m not interested enough to spend the time myself. And not to Ken Ham himself only. He has a lot of highly paid relatives on his payroll as well. It’s a family business.
3. The pay isn’t all salaries. Another well developed American science is hiding the loot. You get a great salary. 401(k) plan. IRA, Platinum level health insurance. Expense account. The expense accounts are black holes that can work miracles. IIRC, they can easily equal your salary. Housing allowances AKA parsonage.
Even I know this and I’m not a xian minister or televangelist. I suspect the real experts have even more ways to hide the loot. Don’t forget, one of these is a Billionaire, Robertson. Fortunes in the $100 millions range are common. Even Glenn Beck is worth over $100 million.
Affinity group scams can be incredibly profitable and lead quickly to huge fortunes.
According to a quick Google search, the website skepticalteacher has 7 of Ken Ham’s relatives as staff members. Seven!!!
If you add up the overall loot intake, of which salaries may well be a minor part, $1 million per year to the Ham clan might be a low estimate. Even if AIG went under, at a million or two a year, they aren’t going to be hurting.
Not that much, the relative’s salaries only came out to $263,075. Of course when it’s that chummy, you get other perks as well. The kids all get summer jobs. The cleaning staff doubles as babysitters. You can cook dinner in the museum kitchens while the little kids are homeschooled in your office and the older kids swing in to help out in the box office. The bookstore sells you your horrible science curricula at 40% off. You don’t have to drive as much. But substitute “wholesale price dishes” for books and this would all be true if they owned a for-profit steakhouse.
Not to be a creation museum defender, but a few points:
1) The graph type is wrong. It should not be continuous lines, it should be points in time. Those lines imply a $*time area that is not what the underlying data is saying. This is really just 4*12 points: don’t read too much into 48 numbers made by someone filing tax returns over 12 years.
2) Expenses > Revenues is neither bad nor good. It’s just a number. All startups have E>R. Like, if Noah’s Ark was a real project, E would be greater than R until the flood came, then all the accountants would die, and the project would be considered a massive failure.
3) Don’t read too much into the bottom two lines, the overall numbers are what are important. And those numbers just say this organization gets $20M a year, and manages to spend about $20M a year.
I have to wonder, do any of the people in our culture who take advantage of the gullible in our society truly believe? Religious leaders, conservative pundits, etc.? Or are they all P.T. Barnams at heart, fooling some of the people all of the time?
It seems that a lot of people have figured out how to monetize stupidity.
Lots of these people believe. They tell themselves that the great mission justifies lying a little bit, that the science simply must be flawed and that it’s best to gloss over the details because they’re right in the end. They also believe that God wants them to be rich, and rewards all those generous people who miss a car payment or two in order to do God’s great work. One thing I see over and over again is that God never, ever tells them to do anything they didn’t want to do in the first place. Think of thoughts in ruts and trenches. They can move around all they like, but they never rise out of the rut. It sounds like a bad thing, but from an evolutionary standpoint it makes for quick and decisive decisions and a consistent strategy.
Apart from the methods mentioned above, there are other perks that preachers use to legally skim money from their non-profits without having any of the cash amounts showing up in the wages & salary book.
A family member can have a spare bedroom in their house rented out as “office-space” to the non-profit – and the price can be whatever the non-profit is prepared to pay.
A family member can sell a block of land at a very high price to the non-profit when it is looking to ‘expand’. Then, at a later board meeting, it may be decided not to expand, and the land can be sold back to another family member at a very low price.
A family member can start a small construction company. Then, when the non-profit needs bulldozers to clear land for a new project, the family member’s construction company is contracted to organize the earth moving equipment. It hires the equipment from a regular company at the standard price and then rehires that equipment to the non-profit at a much higher price.
You can be sure that a large number of transactions entered into by the preacher’s non-profit will have a family member somewhere in the middle getting paid for putting the non-profit in touch with the actual goods and services provider.
Then there are bonus payments, success fees, interest free loans, and forgiven loans. The opportunities are practically endless and most preachers know how to use at least some of them.
not true.
non profits can indeed make a profit. most do, in fact, and that’s a good thing, or most would have failed before they even really got rolling.
it’s that the net profits are meant to be placed in holding to be used to further the cause of the non profit itself.
some of the larger nonprofs have quite large cash reserves.
yup. If you follow the history of AIG… all the way back to Australia, you’ll see it never was ever meant to be anything more than a con for gullible rubes.
that’s all AIG is, all it ever was, all it ever will be.
it’s like Jim Bakker ministries.
the man was convicted on mulitple fraud charges and sent to prison for 10 years. anyone who spent the slightest amount of time examining his “church ministry” could quickly figure out it was a scam.
and yet… as soon as he got out of prison, he set the same scam up all over again, and now makes MORE MONEY THAN EVER.
I’m tired of the misquoted old phrase: “Sucker born every minute”
instead, I’m going to embrace the future…
https://www.youtube.com/watch?v=8QfSzgV1q5g
Museums tend to have operating costs far, far higher than operating revenue. They live on donations, government funding, and endowment funds.
What the top bars are showing is that the museum doesn’t appear to be about to get sunk for lack of money. AiG can probably live a very long time with that thin of a loss.
Which, lest anyone be confused, I think is a tragedy. I’d love for the creation museum to get evicted.
A few years ago, Curt Schilling (the evolution-denying clown) went baseball cap in hand to the Rhode Island state government asking for US$75million to bail out his computer game company. Very soon after, the company went bankrupt with no accounting of what he did with the money. Schilling claimed, “I lost more than US$50m of my own money.” I suspect he asked for and took (read: stole) the bailout money to cover his personal losses, never intending to keep the company going.
And I suspect the exact same thing about the ark park. They are asking for the bailout to cover their losses, then close the park and file for bankruptcy. Maybe AiG should go ask the AIG banksters for a handout or become their title sponsor.
marcus (#3) –
Giliell, professional cynic -Ilk- (#4) –
It sounds more like a bottomless pit, a money pit.
Eh – if they were freaking out over the loss of their tax breaks there was a trivial and easy fix – change the hiring practices of the park to be non-discriminatory. Boom – problem solved.
They refused to do it – which is more evidence for the “this is a scam to bilk gullible rubes out of their money and they never intend to build the park” theory. They get to whine to their donors about how the anti-Christian government is reneging on their agreement because of evil secularists and Satanists and Muslims and whoever else “everyone knows” is an enemy of Christianity. And then ask for more money to pay for the legal case against the state as well as to make up the “sudden gap” in finances from the loss of tax status.
If it is a scam I wonder how long they’ll be able to keep it up.
The real problem that those numbers are reported by AIG. I would question their accuracy on that basis alone.
weatherwax @25
The numbers are reported by AIG to the IRS. Ken Ham just has to look at the example given by his buddy “Dr.” Kent Hovind to see what happens to people who cross the IRS.
” Ken Ham just has to look at the example given by his buddy “Dr.” Kent Hovind to see what happens to people who cross the IRS.”
People like Ham always figure they’re smarter and won’t get caught.
Sad part is they’re not smarter, but still probably won’t get caught.
I’m a baaad Capitalist.
I usually ‘invest’ in food and shelter and clothing.
Real museums have high expenses because they care for specimens that aren’t on display and conduct research. This is the cargo cult version of a museum. It’s supposed to look like a museum on the surface.
I had a boss whose special power was to spend just a little more than the company took in every month. …just saying…
Now when it ultimately fails they have all these great excuses to point to, liberals and atheists destroyed that park, it was clearly not Ken Ham’s fault. And certainly no liability for mishandling money or lying about the park’s prospects.
As AIG, so AiG. Just with three or four fewer zeroes.
Day saved.
Plus, God is on their side.
No problem, PZ. If you want to understand the finances of the Ark Park, just watch The Producers.
http://uk.reuters.com/article/2012/10/15/us-britain-starbucks-tax-idUSBRE89E0EX20121015
“Over the past three years, Starbucks has reported no profit, and paid no income tax, on sales of 1.2 billion pounds in the UK…
For 2008, Starbucks filed a 26 million pounds loss in the UK. Yet CEO Schultz told an analysts’ call that the UK business had been so successful he planned to take the lessons he had learnt there and apply them to the company’s largest market – the United States. He also promoted Cliff Burrows, former head of the UK and Europe, to head the U.S. business.”
not making money for your capitalist masters appears umm profitable.