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July 24, 2013

Host: Ted Simons

Charities Performance Indicator

  |   Video
  • A major announcement was recently made in the charity world regarding a key indicator of a non-profit’s performance. Guidestar, Charity Navigator and Better Business Bureau’s Wise Giving Alliance are the three national organizations that set the leading criteria of a nonprofit’s performance: overhead ratio, the percent spent on administrative and fund raising costs. However, the three organizations just sent out a letter denouncing those criteria as a leading indicator. Steve Zabilski, Executive Director of St. Vincent de Paul and Ellen Solowey, Program Officer for the Virginia G. Piper Charitable Trust, will discuss the development.
  • Steve Zabilski - Executive Director, St. Vincent de Paul
  • Ellen Solowey - Program Officer, Virginia G. Piper Charitable Trust
Category: Community   |   Keywords: charity, non-profit, organization, criteria, update,

View Transcript
Ted Simons: Three of the leading sources of charity -- a move that some see as a paradigm shift in the nonprofit community. Here with more is Steve Zabilski, executive director of St. Vincent De Paul and Ellen Soloway, program officer for the Virginia G Piper charitable trust. Thank you for joining us.

Ellen Solowey: Thank you.

Ted Simons: This is an open letter -- who are these groups and why are they so important?

Steve Zabilski: These are groups, Ted, that people typically look to as they provide advice to individuals and businesses about nonprofit organizations. You can find things like charities, financial ratio, and overhead ratio, information on executive compensation, governance practices, and a whole host of things on their programs.

Ted Simons: And this is guide star charity navigator and a branch of the better business bureau.

Ellen Solowey: Yes, that's correct.

Ted Simons: Alright. Now, they talked about overhead ratio. I read the letter and not coming from the nonprofit community, it took a couple of readings to try to figure out. They seem to have a changing opinion of overhead ratio. What is overhead ratio?

Ellen Solowey: Overhead ratio is the amount of money that you spend, a nonprofit spends on its administrative and fundraising costs and a percentage overall on what it spends to deliver programs.

Ted Simons: What's a healthy percentage?

Ellen Solowey: That is a difficult question. I would argue that there is not a healthy percentage per se. Better business bureau, charity navigator, set a level of about 30%, that they said it should not exceed that but I would argue and would ask Steve if he would agree with that number.

Ted Simons: What do you think, is 30% -- is this one of the things where it is apples and oranges?

Steve Zabilski: It really is. Typically people think that the lower is better. The more money that a charity spends directly on programs and not on things like overhead is good. That really is faulty thinking. Just as an example, they're saying to a charity, if you spend any money on marketing expense or any money on telling your story, on fundraising, that's bad. Even though it might help the charity to grow or serve more people.

Ted Simons: The letter said that this overhead ratio, it is a poor number of a charity's performance and focusing on overhead can do more damage than good. What are they getting at?

Steve Zabilski: What they are really saying is it simply is not as easy as looking at a single number to say this is a really good charity or this charity is not a good charity. You have to look instead at what are the programs? What are the outcomes? What are they accomplishing? Well, gee, they're not investing in their tax return or auditors or human resources or fundraising, as Ellen noted.

Ted Simons: Why is there so much concern over the letter, because that would seem to make sense?

Ellen Solowey: Overhead ratio an easy measure -- when you take away the overhead ratio, suddenly you can't look at that. It becomes confusing. How do I decide whether there is a nonprofit worthy of my investment? The concern is well, if you take that away, how do I proceed?

Ted Simons: It sounds as though from a distance that they might be saying, watch out, because these are the spending too much, 30%. It sounds to me like they're saying a lot of charities should spend more.

Ellen Solowey: Absolutely, and they probably should. Maybe not over an extended period of time. I don't think there was anyone particular number. And that is what makes it confusing for people. Both nonprofits are starved. 62% of people think that nonprofits are spending too much on overhead. That is a very difficult attitude to fight. When in fact, probably they're spending way too little on overhead.

Ted Simons: Some odd 60% of people think charity spend too much on overhead. You have the groups, leading indicators for charity information saying they may not be spending enough. What is a nonprofit to do?

Steve Zabilski: To really come on your show, Ted, and -- this is a fundamental paradigm shift and Ellen is right, that having worked in the nonprofit industry for years, I think every single nonprofit that I've seen, they starve themselves on overhead so that they don't invest in technology. They don't invest in training, fundraising, or development. People will view that as bad when that is how you grow your organization to help more people, to solve difficult problems, to end homelessness, cure cancer. We have to make these critical investments.

Ted Simons: Paradigm shift notwithstanding, or -- how does a nonprofit respond?

Steve Zabilski: I think it gives them permission to say we can make these critical type of investments and not have to apologize for them. We should be judged like any other for profit business should be judged. We see an ad on TV and we don't say gee that business is wasting money advertising. But if we see a charity advertised on TV, many people think that is a waste of money, even though the charity, that can help them raise addition funds, and this goes to that very issue.

Ted Simons: It is either really important or right now it is not all that important, with that in mind, again, how does a nonprofit respond and is this not an opportunity to be a good thing for nonprofits?

Ellen Solowey: Yes, I think it is. And I think nonprofits have to work with their boards of directors to try to make sure that they understand the need in doing this and speak to their donors and funders. It is very important that the donors and funders understand this as well. Never looked at overhead, never, but many funders and donors do.

Ted Simons: That is the big concern here. You mentioned an easy metric here. Look at that and base their decisions and is it not going to be there anymore or are they changing the emphasis?

Ellen Solowey: I think they're changing the emphasis. They're not saying that it shouldn't exist at all but that it should not be the one and only indicator of a nonprofit's working effectiveness?

Ted Simons: How does it impact fundraising, impact salaries, the whole nine yards?

Steve Zabilski: I think, Ted, it gives nonprofits that permission that they can act more as a for profit organization, hire good people and make investments in infrastructure, training, computer and phone system and not have to feel like they're doing something wrong. But in fact, it is enhancing it for both short term and long term, that it is building the very viability, stability of a nonprofit.

Ted Simons: When the letter says that people served by charities don't need low overhead, they need high performance, you would agree?

Ellen Solowey: Absolutely.

Steve Zabilski: Most definitely.

Ted Simons: A change in how things are done and a change in what information donors have, but it is an opportunity --

Ellen Solowey: Absolutely. The overhead ratio was never a proper reflection of nonprofit effectiveness. It didn't tell you about the quality or effectiveness of the program at all. It was a false indicator. And getting rid of that false indicator --

Ted Simons: A little warning probably would have been nice.

Steve Zabilski: It actually was one of those things that caught everyone by surprise. It was a pleasant surprise. It was something that many charities have felt has been an incorrect way they've been judged for many, many years. It is really the starting point of a conversation now, not the ultimate decision on which organization is good, which organization isn't as good.

Ted Simons: Very good. Good to have you both here. Thank you for joining us.

Steve Zabilski: Thank you for having us.

Ted Simons: That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.

Medical Marijuana Lawsuit

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  • The Arizona Department of Health Services has set an August 7 deadline for medical marijuana dispensaries to open after receiving their certificate for operation. Several dispensaries say they have been bogged down by court fights over medical marijuana, and have sued to get more time to open. Three days of hearings are being held to determine if those operators will get more time. Department of Health Services Director Will Humble will talk about the hearing and give us an update on medical marijuana.
  • Will Humble - Director, Department of Health Services
Category: Medical/Health   |   Keywords: medical, marijuana, health, update,

View Transcript
Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. Over 40 medical marijuana dispensaries have opened in the state with prospective proprietors facing an August 7th deadline to turn in the required permits. Several dispensaries sued to extend that deadline, resulting in three days of evidentiary hearings held over the past week. The director of the state Department of Health services will join us in a moment to talk about the hearings, but, first, producer Lorri Allen and photographer Scot Olson take us to a Tempe dispensary that has a connection to the lawsuit.

Lorri Allen: Despite state regulations and recommendations from the police department, harvest of Tempe opened May 4th.

Steve White: It didn't help that from the time we started writing checks until the time we opened was more than double the time that we anticipated it would be. And the expenses were significantly greater than we anticipated.

Lorri Allen: Extra costs included bulletproof glass and security cameras. Steps you can't see. Measures to make sure that there is no marijuana odor.

Steve White: The difficulty with this industry is you have a new industry. You have a lot of preconceived notions about what these places will be.

Lorri Allen: He says Tempe is a progressive city but it has been demanding.

Steve White: I don't think any city says, wow, a medical marijuana dispensary, great.

Lorri Allen: Representing a dispensary that had trouble getting a state to approve its location.

Steve White: On behalf of that client, I'm seeking additional time to open. Whatever amount of time that we were going through the debate about whether our building is plopped in the middle of the street or not, should be tacked on to the end of the deadline to allow that client to open a little later.

Lorri Allen: Attorney Ryan Hurley doesn't have a client in the lawsuit, but understands why some of those running clinics feel an extension to the deadline would be unfair.

Ryan Hurley: I think that there is a -- a sentiment among the ones that were able to open in time. Hey, we were able to do it, why can't anybody else? Why should they get an extension when we worked very hard to get there.

Steve White: We have had a number of patients come back, since they've been coming here, they're sleeping better than they have in their entire life.

Lorri Allen: They do agree that getting medical marijuana to people in pain is the ultimate goal.

Ted Simons: Here now to talk about the lawsuits is Will Humble, director of the Department of Health Services. The focus of the hearings was a bunch of people saying they need more time, correct?

Will Humble: There’s about 18 certificate holders. If you got your certificate last summer, August 7th, you have a year to get up and running. If you don't get up and running in that first year, your certificate expires. We're up against a deadline in two weeks if folks don't get their approval to operate in the next couple of weeks, you know, unless the court changes something, those certificates will expire and then we'll start on the second round.

Ted Simons: The approval to operate. Obviously we have cities involved, other factors, construction, you know, the odor of marijuana in the building, and all of that kind of stuff makes sense to you that some folks are finding it tough sledding?

Will Humble: Oh, from the very beginning I knew that the biggest barrier to getting these dispensaries up and running would be issues involved with zoning and local restrictions. I mean, you know, our regulations put sort of the baseline regulations in place. But then, no matter where you're going to site your dispensary, you have to get permission from the local jurisdiction, a certificate of occupancy. Some of the certificates are difficult to get. The clip that you saw in Tempe. Tempe has got standards over and above the standards that we developed. There is no doubt that this was a challenge in some jurisdictions. Some jurisdictions were more challenging than others and I said that in court.

Ted Simons: Indeed. We should mention, the judge has to make a final decision, not you, correct?

Will Humble: This case is in Superior Court. I was a witness for a few hours last week. Final day of testimony was today. The judge is going to take back the testimony, the witnesses and all of the evidence and come up with a decision here in the next week or so. And then give some direction about whether to dismiss this suit or whether to side with the plaintiffs and say hey these unforeseen circumstances dictate that agency, you shall give them more time. We will just have to wait and see what the judge says.

Ted Simons: Do you think they have a point? Especially when they say the White Mountain dispensary, in the appeals court right now, some say that has a chilling effect because that slows the whole process down. Does that make sense to you?

Will Humble: Absolutely. The chilling effect goes way back to the beginning when I was on the show about two years ago talking about the difference between state and federal law. There has always been this sort of dichotomy of state and federal law not seeing in sync. That was the first chilling effect. There have been other things that have happened along the way that maybe weren't fully, you know, you couldn't really anticipate. But that is the nature of capitalism. I mean, you know, you jump into business, and you do the best you can to plan, but market forces and unforeseen circumstances sometimes end up driving the day.

Ted Simons: Well, that seems to be the argument among some dispensaries. A lot of blood sweat and tears on our part to get done by the deadline. Not really fair to extend that.

Will Humble: Right. That is the other side of this. If folks get more time to get their dispensary up and running, you know, in a sense, the folks that really hustled and got this thing done on time say, hey, wait a minute. I paid contractors extra money to get in here quickly, and I guess I didn't have to.

Ted Simons: So, August 7th, as we stand right now, that August 7th deadline is still on, correct?

Will Humble: Yes.

Ted Simons: When are you expecting some sort of ruling here, some sort of decision?

Will Humble: I don't really know. But the judge knows because I was in court and everybody knows that this decision needs to come before August 6th, the next couple of weeks.

Ted Simons: Let's say they move it to the 14th, 20th, whenever it, when the last day arrives are you expecting an avalanche of paper work, applications and things?

Will Humble: Actually now, we have 62 with operating licenses right now. We have 21 that have asked for their opening inspections. So, in general, most of those are actually ready to go. We're really looking at something close to 80 out of the 98 that could potentially make the deadline. So, it is really just a handful of these applicants that haven't -- or don't appear to be able to make the deadline because a local jurisdiction issues and other things.

Ted Simons: So, as far as the whole program stands, what are we seeing around the state? How many folks within the 25 mile boundary and those sorts of things, give us an update.

Will Humble: The25 mile, what you are talking about, if you live within 25 miles of a dispensary, you are not authorized to cultivate when you renew your card. Right now 90% of Arizonans, 90 percent of card holders live within miles of a dispensary right now.

Ted Simons: Okay.

Will Humble: About 38,000 qualified patients.

Ted Simons: Is everything otherwise going along as expected, not too many speed bumps and surprises?

Will Humble: There has been plenty of speed bumps and surprises with this, mostly related to lawsuits and that stuff. Water off a duck's back --

Ted Simons: Alright. Good to have you here. We will keep an eye on this thing. If the deadline is expended we may have to have you back to see why and how long.

Will Humble: Alright.

Ted Simons: Alright.

Yarnell Hill Fire Site

  |   Video
  • The Yarnell Hill Fire Site, where 19 Hotshot firefighters lost their lives, was opened to the media for the first time this week. KTAR fire reporter Jim Cross visited the site and will talk about his experience and show pictures he took there.
  • Jim Cross - Fire Reporter, KTAR
Category: Community   |   Keywords: fire, firefighters, yarnell, update, around arizona,

View Transcript
Ted Simons: The site where 19 hotshots firefighters lost their lives battling the Yarnell hill fire was open to the media for the first time yesterday. Veteran wildfire reporter Jim Cross of KTAR radio was there and he joins us now. Thank you for joining us. Give us a general -- we have photos in a second here, but give us a general description of the scene.

Jim Cross: It brought it home to reality when you went into the canyon, how bad this was. The thing that really surprised me was that pictures didn't do it justice, how rugged, how deep this canyon really was. When you're on the ground inside of that canyon, it is enormous.

Ted Simons: Who was allowed access?

Jim Cross: Reporters, so far only fire people that went up there. Reporters, TV, photographers, and we went in there with some of the fire people, Darrell Willis, Prescott fire and so on.

Ted Simons: We so reporters going in there. Alright, the area, we can see lots of rocks. We can see obviously high walls there. Again, I've heard you describe this as a horseshoe kind of an area.

Jim Cross: Yeah, box canyon, basically, very high walls. Hundreds of feet high. Boulders, big boulders on the sides, some the sizes of buses, Volkswagons, pickup trucks.

Ted Simons: Firefighters were where?

Jim Cross: Firefighters if you compare it to a horseshoe, at the very curve of it and back of it.

Ted Simons: We're seeing a T-shirt on a cactus here.

Jim Cross: That is a Granite Mountain hotshot T-shirt, placed on a burnt cactus, we were asked to touch it as we went by to be solemn.

Ted Simons: Interesting. Back to the area and back to the region. Obviously it looks like a moon scape right now this whole area. Before what did we see as far as vegetation?

Jim Cross: It was brushy. Oak in there, maybe Chaparral --

Ted Simons: Six, seven, eight feet --

Jim Cross: Yeah, heavily covered. It was definitely vegetation was in there.

Ted Simons: This photograph right here, now, you mentioned a box canyon kind of horseshoe-esque. Are we looking back --

Jim Cross: That would be straight back toward the back of the canyon.

Ted Simons: What is the fence for?

Jim Cross: The fence is to protect the site where the firefighters deployed their shelters and where they eventually died in this fire, to keep people away from it.

Ted Simons: As far as you can tell, were they in the middle of this clearing or along the sides of one of the walls?

Jim Cross: Um, they were in the middle. I mean, it's closer to the middle than it is to the side. It is not a -- you know, hugely wide canyon. But it's, you know, half a mile in or so.

Ted Simons: Obviously not on the hills. In --

Jim Cross: They were on the floor, yeah.

Ted Simons: Were they close -- I've heard reports that they were very close together. Is that what you're hearing, what you saw up there as well as far as the terrain is concerned, they were probably in the same spot?

Jim Cross: Oh, yeah, they were all in the same spot. Shelters were deployed side by side. They were very close to each other.

Ted Simons: When we look at the photos that we are seeing here, fence walling off the area, the mountain side, the ravine, whatever you want to call that, the hillside. Do we know how they got into the area? There is a ranch nearby --

Jim Cross: A ranch about a half a mile away from where they were at. We talked to Prescott, you know, fire, fire chief, Darrell Wallace yesterday, he believes they were trying to save the ranch. And the ranch was saved. And the fire at one point was going away from them. It turned around with the wind shift, thunderstorms, 50 miles an hour and came back towards them. They were about as far back in the canyon as they could get when they deployed. There was no way you could climb out of that canyon. On a day when you -- it would have taken a half hour, 45 minutes to get out of there.

Ted Simons: And they were carrying that equipment to clear brush, correct? They were in there for a purpose.

Jim Cross: Yeah, they were in there cutting away brush that could have burned. In their spot where they deployed, they had cut away brush with chain saws, axes and so on and so forth.

Ted Simons: I would imagine that would be the opening to the box canyon --

Jim Cross: Just outside of the ranch. That picture right there really gives you a pretty good scale and scope of how, you know, rugged that canyon is and rough it is.

Ted Simons: That fire burned all of the way to the top of the walls and over.

Jim Cross: Completely. The rocks are dark from fire. Some of the rocks cracked. You know, the fire ended up burning about 8,500 acres. It scorched the canyon.

Ted Simons: As far as where the fire came and where it went, pretty hard to figure that out from evidence --

Jim Cross: Yeah, the investigation is still underway. We're going to have an investigation we believe by late August or maybe mid-September at the latest. And I think that will tell a bit more. There has been a lot of speculation about what happened. And yesterday we got a pretty good reality check from talking about the fire people about what really happened. You know, the canyon, like I said, impossible to climb out of. They deploy the shelters, that is always a worst case scenario, last-ditch effort. These shelters are good to about 500 degrees. This fire was burning much hotter than this.

Ted Simons: And moving very fast.

Jim Cross: Very fast. About four miles. It moved about four miles in 20 minutes. I've heard some estimates. I haven't seen it confirmed. Moving 20 feet a second. The fire moving incredibly fast. The conditions in there must have been just unbelievable.

Ted Simons: When you see that box canyon, obviously you were there. Did the concept of swirling winds, makes a heck of a lot of sense.

Jim Cross: Yeah, these thunderstorms -- this was an erratic thunderstorm. The fire, as I'm being told was moving away from them. It came back toward them. It probably blew in several different directions, it was -- all over the place.

Ted Simons: It brought this all home to you. Did being there give you a different perspective?

Jim Cross: It gave me a different perspective. It sinks in the reality. It has been a tough story to cover for almost a month anyway. It really brought it home. To see the canyon where this happened, gave you a better idea of what happened and size and scale of it. It is just -- it is totally different when you see it in person and pictures do not do it justice.

Ted Simons: Thank you for sharing those photographs with us.

Jim Cross: Thank you.