A Detailed Analysis of “Library foundation numbers in the black”

(published in the North Shore News, 26 January 2011)

by George Pajari

Before we get to the many false and misleading statements in this article (by the people interviewed,
not the fault of the reporter), let me reiterate: the reason I brought up the issue of wasting $43,561 on
custom furniture designed to match the pattern in the carpet (instead of buying the complete works of
Shakespeare on DVD by the BBC) was to get people's attention that there are many examples of
fiscal mismanagement and given that, it would be folly for West Van Council to increase taxes before it
had ensured that the money raised would be better spent this time.

If the Mayor had not, while declaring my statements on the $43,561 furniture expenditure false,
brought up the Library Foundation (as a way to distract, presumably, from my original point), I would
not have thought of turning my attention there.

Please understand, I'm not just worried about $43K piddled away on fancy furniture or a charity that
spends a disproportionate amount of its donations on overhead. The real concerns include:

a) why West Vancouver has spent $2.5 million more on phones over the past five years than the
District of North Vancouver (which has twice the population of WV);

b) why West Vancouver has not followed the 2008 recommendation of its own Finance Committee to
provide more complete and useful budget information to inform residents and aid in financial
management; and

c) why WV Council hide the fact they were raiding the cookie jar when they took more money out of
the $20 million Endowment Fund than permitted by the Bylaw that created the Fund.

That is what residents ought to be concerned about; please put matters of fancy furniture or grossly
inefficient fundraising into perspective.

That said, I cannot let the misinformation in the above article remain uncorrected. Apologies for this
tedious line-by-line deconstruction, otherwise known as a Fisking (cf. Wikipedia). (In the quotations
taken from the above article, [Brown] refers to WV Memorial Library Foundation Chair Nicole Brown,
and [Bergen] refers to WV Memorial Library Board Chair Marcia Bergen.)

[para. 1] "Allegations to the contrary, donations to the West Vancouver Library Foundation did cover
their expenses in 2009..."

Simply not true. Further in the very same article it states: "the foundation raised about $126,000 in
direct donations" [para. 8] and "Expenses [were] … $134,000 in 2009." [para. 9]

As an aside, it is impossible when analysing most fundraising foundations to produce a perfect

analysis since most do not accurately and consistently separate their costs associated with managing
their investments from their costs associated with fundraising. Because of this difficulty (and because
almost every library foundation in Canada was able to raise more in donations than all of their
overhead costs, even including those associated with managing their endowment funds), I merely
compared total costs with total donations. Seems simple enough.

The Foundation, however, in order to make their dismal performance look slightly less dismal, has
produced an analysis in which things look slightly better if you do not include the cost of managing
their investments in their overhead. As a result, they claim: "Eighty per cent of donations to the West
Vancouver Library Foundation in that year were eaten up by overhead and expenses, according to
financial documents." [para. 2]

Which is, by any measure, still obscene. Revenue Canada (CRA) guidelines recommend charities
keep their overhead to less than 35%. To quote the CRA, should overhead expenses consume more
than 75%, "This level will raise concerns with the CRA. The charity must be able to provide an
explanation and rationale for this level of expenditure to show that it is in compliance; otherwise, it will
not be acceptable."

So even using the Foundation's own numbers, things were dreadful in 2009. Q.E.D.

[para. 14] "'The entire landscape of fundraising has changed over the years to be much more
competitive,' said Brown."

Undoubtedly. But so it has for all library foundations in Canada. In fact, when we compare total
donations to total overhead for all 16 library foundations in Canada, the West Van Library Foundation
ranks 15th.

[para. 17] "'To us, the foundation is a blessing and we approve of everything in terms of their
activities,' she [Bergen] said."

When I originally brought up the issue of the custom furniture (which was, admittedly, purchased some
time ago), I expected the library to respond with something like "Well, that was then, and this is now",
or "That pre-dates our involvement and residents can be reassured that we now take a careful look at
all expenditures." In other words, I did not expect the Library to defend this ludicrous allocation of
resources. And when I turned my attention to the problems at the Foundation, I expected some mea
culpas (similar to Petrie's comments in para. 6) and a commitment to do better in future.

Not for a moment did I expect the Chair of the Library Board to say she "approves of everything".

What confidence does that give West Vancouver residents in the fiscal oversight she is likely to bring
to her responsibilities as Chair?

[para. 19] "Brown said she felt the accusations were misleading."

As stated earlier, any analysis is going to be imperfect (owing to the impossibility of accurately
allocating expenses) and therefore, to some trivial extent, misleading. But even if we use the
Foundation's own numbers (spun to look as good as possible), the performance was still abysmal. So
rather than quibbling over details (80% or 105% overhead), it would have been more comforting for
the Chair to acknowledge that no matter how one slices and dices the numbers, things were awful in
2009 and commit to doing better in future. It is distressing that the Chair has chosen instead to defend
the indefensible and attack using false information and untrue statements.

[para. 19] "…she [Brown] said nobody had raised concerns about the group prior to that meeting."

[para. 21] "Bergen agreed that this hasn't been an issue in the past. 'This is the first time that it's been
raised,' she said."

These statements are as false as Bergen's letter to the editor denying the library had spent over
$40,000 on custom furniture.

From the minutes of the Library Board meeting in October 2000: "There were concerns expressed on
growing cost of expenses of the Foundation operations" (page 6). So my concerns are hardly the first
time the Foundation's overhead has been raised (and, by the way, the Foundation's expense ratio in
2000 was a lot better than in 2009).

[para. 20] "'My concern with Mr. Pajari's numbers is that they were incorrect,' she [Brown] said…"

Another provably false statement. As we have shown above (readers can verify for themselves by
looking at the CRA website or by looking at the Library Foundation's 2009 Audited Financial Report),
my numbers are accurate, correct, and taken from official documents. As explained above, one can
quibble over minor details, but my numbers are not incorrect.

It is for to citizens to judge the actions of a Chair of a public body, managing a budget of over $4.5
million, who resorts repeatedly to what I will charitably charactise as "misstatements of fact".

[para. 20] "'This came out of the blue. It's a total surprise to our group.' [Brown]"

Are you serious? The fact that your charity's expenses were 80% (your numbers) to 105% (my
analysis) of your donations is a total surprise? That your group's performance ranked 15 out of 16? A
breathtaking admission.

[para. 22] "He simply wanted to raise a concern about the efficiency of the organization, not their
mission, he added."

Indeed.

Let's give it a rest, people. Let's move on. Do not dig a deeper hole. I had hoped "that was then, this is
now" might have been the response, rather than denial, amnesia, and "we approve of everything". I
had hoped perhaps some admission of responsibility and a commitment to do better in the future, not
"misstatements of fact" in response. It's the "everything is wonderful, don't rock the boat, and don't
bother checking" mentality that has led to WV's having unsustainable growth in its municipal budgets
(52% over 2000-2008 as compared to a combined 15% increase in population and inflation) and
having the highest per-capita costs of any municipality in the Lower Mainland. And as the above article
shows, that approach is live and well at the WV Library. 'Tis to weep.