The Shocking Bill Your Daughter's Girl-Scout Cookie Money Is Paying

Selling Girl Scout cookies is an annual spring ritual, one that my 8-year-old daughter participated in for the first time this year with her Brownie troop. I was proud of all the hard work and effort that I saw from dozens of local troop members and parents as they worked to raise funds for the activities that define what being a Girl Scout is.

Yet recent revelations about the pension crisis at the national Girl Scouts of the USA organization have me questioning whether the efforts that my daughter and her troop-mates make are truly aimed at furthering their Girl Scout experience. With recent lawsuits between local Girl Scout councils and the national organization, mistakes in the way the GSUSA handled pension benefits have cast a shadow over what should have been untempered enthusiasm in light of the Girl Scouts' 100th anniversary last year.

Image source: Wikimedia Commons, courtesy Drmies.

What's behind the pension problem?
The most shocking thing about the pension shortfall at the GSUSA is its size. A $347 million deficit at the national organization has led to major financial demands on the more than 100 local councils that help fund GSUSA. One council in middle Tennessee has sued the national organization, seeking to withdraw from the pension plan by alleging that the national organization breached its fiduciary duty in mismanaging the plan's finances. Without pulling out of the plan, it and other local councils will have to pay makeup contributions to the plan to cover pension liabilities. That in turn has put financial stress on local councils, leading to controversial moves like selling off summer-camp properties and laying off the locally based employees who help volunteers.

For its part, the national organization blames the economic crisis for its pension troubles. As recently as 2007, the pension plan ran a surplus of about $150 million. In comments to the House Ways and Means Committee (link opens PDF file), GSUSA CEO Anna Maria Chavez argued that the organization's "unfortunate situation is not anyone's fault," citing its decision to freeze its pension plan as having reversed the initially positive effects of recent amendments to pension-funding provisions that were designed to help it and other charities. Chavez now anticipates that the organization will have to contribute $145 million between 2014 and 2016 to help fund the defined-benefit plan for 13,000 participants, further noting that those contribution requirements are more stringent than for-profit corporations face.

The national organization hopes to get at least some relief from the shortfall. If GSUSA can successfully lobby Congress, it could reduce the amount it has to contribute to the plan, giving it more time to remedy the shortfall. Still, any short-term reduction in required contributions would come at the expense of higher costs from 2017 to 2022, according to GSUSA projections.

Get ready for more
There's nothing all that unusual in the pension problems facing Girl Scouts of the USA. Plenty of private companies and public-sector employers are dealing with the same issues and have had to take similar steps to shore up their pension finances. Like the GSUSA, IBM (NYSE: IBM  ) and Verizon (NYSE: VZ  ) froze their pension plans several years ago, as both companies decided that reducing the unpredictability of pension benefits made the most sense for them in managing their risk. More recently, Verizon and General Motors (NYSE: GM  ) took even more dramatic steps to limit pension risk, outsourcing substantial portions of their respective pension liabilities to insurance giant Prudential (NYSE: PRU  ) . By doing so, the two employers passed off their obligations to an industry that's designed to handle the longevity risk that pension payments create.

The main problem that employers throughout the nation are facing is that promises they made to their employees were more expensive than they initially planned for, and many of them were ill-equipped to handle the responsibility of funding their obligations in uncertain market environments. In the long run, the solution will require rethinking about long-term promises made to workers in their employee benefits, with particular attention to the worst-case scenarios that can create unexpected financial burdens.

For the Girl Scouts, the pension controversy comes at a time in which the entire organization has gone through major changes in an effort to reinvent and modernize itself in order to reverse falling numbers of participants. For many parents, there's less incentive to work hard on fundraising efforts when they know that an alarmingly large portion of the proceeds from their labors will go not toward current programs for girls but rather toward getting a distant national organization out of its financial bind. To avoid the challenges the GSUSA now faces, other popular nonprofit organizations need to look closely at their employee benefits to keep would-be donors from balking at the prospect of funding pensions rather than supporting the current programs that do so much good.

Read/Post Comments (6) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 30, 2013, at 9:55 AM, lrichar3 wrote:

    While congress is taking a look at the Girl Scouts' request to re-structure their pension, we are asking congress to also look at the Girl Scouts' epidemic of camp sales across the nation. These camps are not "excess property" . In many cases, drastically reduced camp capacity means that few girls will be able to participate on a regular basis. Cap liquidation without the consent of the membership violates the GSUSA constitution and the trust members placed in their local councils. GSUSA needs to be held accountable for respecting the wishes of its own members if it is going to survive. Please help by signing our petition to congress. Here is the link:

    For more information on the Girl Scout property issues, please visit

  • Report this Comment On June 30, 2013, at 12:45 PM, HonestGirlScouts wrote:

    "For many parents, there's less incentive to work hard on fundraising efforts when they know that an alarmingly large portion of the proceeds from their labors will go not toward current programs for girls but rather toward getting a distant national organization out of its financial bind." YOU SAID IT, BROTHER! I was once asked to volunteer with a horse-themed day camp. Oh, how nice, I thought, I will be helping girls get ready to walk and ride horses, clean stalls, groom and feed them... just like my daughters did just a couple of years prior AT THE SAME CAMP. NO, I was told that because of budget cuts, the little girls I would be overseeing would get introduced to horses in books, do horse-related crafs, culminating in a visit to a stable to LOOK AT REAL HORSES! What a joke! I was shocked and declined to help, embarrassed they would even consider taking parents' money for such a shabby little day camp. That was a YEAR OF RECORD COOKIE SALES! But the straw that broke this former Girl Scouts Leader's back was when I discovered how Girl Scouts' MEMBERSHIP FEES and COOKIE PROFITS are used to promote pro-abortion activities. Just last month, GSUSA presented "MAKERS: Women Who Make America" in a live webcast, inviting girls of all ages to watch online. This documentary was a feminist cabal of abortion activists and lesbians, joking about orgasms and ridiculing women who prefer to honor motherhood. Most disgusting, is GSUSA invited Amy Richards to speak on a panel, who had just proudly proclaimed in the film that she aborted two of her triplets out of "choice"! What's more, GSUSA is the largest funding and founding member of WAGGGS (World Association of Girl Guides and Girl Scouts) which represents ALL AMERICAN MEMBERS at pro-abortion conferences around the world and at United Nations events. Just look up "Bali Global Youth Forum Declaration PDF" and read for yourself that not only does WAGGGS claim that all Girl Scouts want to "legalize sex work" as "decent employment", they were on the Steering Committee that wrote the Declaration! Is it any wonder parents are pulling their girls out of Girl Scouts?

  • Report this Comment On June 30, 2013, at 2:03 PM, love2earnbadges wrote:

    If you are looking for an alternative to Girl Scouts for your daughter, check out Frontier Girls at With more than 1200 individual badges, there is something for everyone. They are still small, but already have troops in 43 states.

  • Report this Comment On July 02, 2013, at 6:19 AM, CoreyAnnRingle wrote:

    Less than 10% of our annually budget goes towards our camps. A few years ago (the last year we had our camps all open), GSNEO spent only $990,000 on all our camps together. Less than $1 million of our $11 million operating budget. Of that $11 million, $8.5 million was product sales.

    So while 80+% of the budget is girl earned, and 50% of the kids camp (by far the most popular program), less than 10% could be spent on the kids.

    Additional, donors were not made aware of the liquidation and spoke out in court with us, the plaintiffs. One camp had an endowment that now has been lumped in with General Funds. GSNEO continues to alienate large donors. I would think twice before donating to Girl Scouts unless you have the money to hire a lawyer to make your gift iron-clad!

  • Report this Comment On July 02, 2013, at 9:04 AM, jfsleuth wrote:

    Why is it that you single-issue types have to try to make everything tie into your issue?

    While you have every right to support it, the majority of Girl Scouts does not, and has not, even thought about the specious tie in with international organizations, since they are not germane to what they are doing in their Troop or Council.

    While GSUSA is a member of WAAGS, formed for organizations all over the world, it does not have the VOTES to compel others to take a particular position, regardless of the issue.

    I am more concerned about the sale of camps, changes in programing and opportunities for girls to gain leadership and other experiences than I am in your politics.

    You made your choice to leave Girl Scouts. Please take your opinions to some other forum since you now have no business intruding into the affairs of an organization you have abandoned.

  • Report this Comment On January 10, 2014, at 7:46 PM, Nu2Fool wrote:

    $.85 to create a box.

    Troop get $.57/box.

    Sales in 2014 will be $4/box.

    Est. Sales: 200 MILLION.

    How can I get in on that pension plan??...must be incredible!!!

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2515998, ~/Articles/ArticleHandler.aspx, 10/1/2016 3:01:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 17 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:01 PM
GM $31.77 Up +0.29 +0.92%
General Motors CAPS Rating: ***
IBM $158.85 Up +0.74 +0.47%
IBM CAPS Rating: ****
PRU $81.65 Up +1.68 +2.10%
Prudential Financi… CAPS Rating: ****
VZ $51.98 Down -0.14 -0.27%
Verizon Communicat… CAPS Rating: ****