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2009 finances
Posted January 20th, 2011 - 2:12 pm by from Alexandria, United States (Permalink)
Please be aware that the 2009 financial report is now posted. Thank you to CS finance team!

http://www.couchsurfing.org/organization_finances_2009.html

Posted January 20th, 2011 - 4:30 pm by from Trieste, Italy (Permalink)
Thanks Marg.
"More on lawyers than on servers", that's our motto.

Posted January 20th, 2011 - 5:34 pm by from Paris, France (Permalink)
Thanks Margaret.

I've done a quick comparison with 2008 here (Excel)

The main figures:

Revenue from donations & "verification": $ 1.162.287 (+48%)

Salaries & benefits: $ 154.504 (+53%), but to that one has to add "travel reimbursement" $ 101.979 which is an allowance not related to actual travel

Accounting fees: $ 16.877 (+214%)

Legal fees: $ 78.882 (+269% ! - 2010 budget: $ 111.952)

Temporary help: $ 47.309 (+110%), for what? "verification"?

Rent: $ 249.474 (+145%, 22% of income!)

Travel & Meals: $ 225.582 (+63%)

Staff Development: $ 7.645 (-46%)

Total Net Income: $ 67.335 (-48%)

Moved to Savings Reserve: $ 50.000 (-50%)


This famous savings reserve which keeps disappearing from financial statements every year should now amount to $ 275.000 without interest. Very conservative savings investment of the previously accumulated amount at just 2% should have yielded at least $ 4.500 and if invested properly up to $ 10.000, yet total interest earned on all CS accounts is reported as just $ 2.008. Something doesn't look right.

Perhaps someone who does accounting for a living could have a look at these figures.

Previous discussions of finances are here:

http://www.couchsurfing.org/group_read.html?gid=7621&post=3995791

http://www.couchsurfing.org/group_read.html?gid=7621&post=3966676

http://www.couchsurfing.org/group_read.html?gid=429&post=2538102

Posted January 20th, 2011 - 7:31 pm from Macau, China
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Posted January 20th, 2011 - 8:24 pm by from Paris, France (Permalink)
Michael, that was 2009, I guess mostly rent for two offices: Base Camp and the Istanbul Collective 15 October 2009 - 31 March 2010. We should see that figure drop in 2010 and 2011, but the famous cohabitation bonus and Puerto Vallarta retreats may take up its place.

Posted January 21st, 2011 - 1:02 am from Managua, Nicaragua
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Posted January 21st, 2011 - 3:29 am by from Alexandria, United States (Permalink)
(I'll be interested in seeing the 990 and audit; when I receive them, I'd be happy to send them along to anyone who sends me their private email and a request.)

I think discussions here about the CS finances are useful, but are, particularly so, when accompanied by some knowledgeable input.

I spent some time today on the Charity Navigator site (a non-profit site which evaluates charities worldwide for free), then evaluated the CS 2009 finances using the methods they use to evaluate charities (CS is not eligible for evaluation by Charity Navigator, itself, because CS does not have a 501c3 designation):

http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=1093

I did some calculations to come up with the Organizational Efficiency measures described here:

http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=35

Charity Navigator uses 4 calculations as part of its review of a charity (I'll do the others, described on the link above, when I get the 990) I, first (very conservatively, and generously toward CS), added up line items related to Administrative Expenses, Program Expenses, and Fundraising Expenses...and got these figures (send me an email if you want to see how exactly I arrived at these figures):

Programming expenditures for 2009: $39,195.95
Fundraising expenditures for 2009: $58,026.89
Administrative expenditures for 09: $1,004,084.30

Now I plugged these numbers into the formulas below, using total expenditure = $1,101,307.08 and total donations = $1,168,642.45 (which includes sales items and earned revenue with donations)

1. "Program Expenses" shows how much of the total expenditure is spent on charitable programs, ie: the mission of the charity. (PE/Total expenses): this should be greater than 1/3, or 33%, to get a good rating from Charity Navigator, so large percentages are good. CS' Program Expenses ratio PE/TE = 3.56%...a tenth of what it should be for a good rating. Red flag for sure; CS is not spending money on delivering its mission....bad sign for any charity.

2. "Fundraising Expenses": this shows how much of the total budget goes for the promotion of fundraising. CS did great in this category!
FE/TE = should be a low number; lower is better. CS' Fundraising Expenses ratio was 5.3%! Great job! This is a result of having all fundraising conducted online, via verification or donation.

3. "Fundraising Efficiency": how much of each dollar collected goes to fundraising? CS did a great job here! Very little of donation income is spent on fundraising: FE/total donations =0.5% for CS in 2009. Great! This is due to the nature of online fundraising: it's cheap and effective.

3. "Administrative Expenses": assesses how much of the total budget is spent for administration within the charity. Lower percentages are better here; and CS did a horrendously hideously horrible job in 2009. The, By-FAR, largest part of their expenses goes for administration: AE/TE = 91.2%.

take home:

CS needs to spend less money on its own staff (their rent, travel perks, entertainment and food) and more on programs created to serve their community: hooking up hosts with travelers. This information serves to back up my accusation that CS' donation income primarily benefits its own staff, in a self-serving arrangement, and is not spent on the community, in a charitable arrangement.

Many people say: it's not CS' fault...it's just a website that connects people and the hosts donate the costs.

no.

CS could do a variety of programming projects that would improve the ability to connect hosts to travelers and spread the CS mission of 'creating inspiring experiences'. I imagined some examples below (disclaimer: I'm not advocating for these programs. I'm simply suggesting them, as ways to more appropriately spend the donation income, to benefit the CS mission.):

1. Searchable cache of "Nomad Bases" in each country: any host who agrees to designate their home as a "Nomad Base" (such as Casa Robino or Dublinguy's abode, for example...with details ironed out later) would be entered into this database of cost-free nomad homestays. Nomad Base hosts could be eligible for support from CS: perhaps 6 utility bills per year paid for by CS...? Just a suggestion...one staff member could manage this program with a small budget.

2. Whatever happened to "CS Cares"? this was a great idea: using CS as emergency housing for natural disaster relief locally. Why not establish a CS Cares staff member who could work with ambassadors to make sure any and all local hosts, or travelers, have shelter after a disaster? pay them appropriately and get it done. Sponsor on-site potlucks, canned food distribution, clothing or bedding drives, etc...with $ from CS.

3. "Peace/Travel Scholarships": offer stipends to pairs of students, or travelers, from disharmonious countries to come together for fun, friendship, and diplomacy. CS could accept applications from all types of people to fund their travel to other countries where their nationality is misunderstood...and hook them up with a host who also applied for a scholarship. These people would be paid for their travel, and interaction, with the requirement that they write about it on the CS News Channels, as peace promo.

4. "Rural Couchsurfing" program: with a staff member and budget! whose job is to promote travel to little-known, off/tourist sites. How? hey why not organize country-side invasions, like the city ones? Why not promote hosts who want to share their rural life?...think...there are many things that could be done here, including a database of rural homestays welcoming travelers.

5. Arts initiatives:

-CS Gigswapping: this was real, back in the day:) Why not resurrect it, with a budget and a staff person? Music festivals, featuring CS bands and musicians and spoken word performance, could be meshed with large-city invasions.

-CS Film Festival: this could easily be done on less than $20k....with an opening night party, filmmakers hosted by locals, cool venues, cash prizes...all serving to get out the CS ideals of hospitality, generosity, sharing and cross-cultural interchange. Put out a call to all CS filmmakers who want to document their adventures, tell their stories, and spread the word through film.

-sponsor visual artists at arts festivals: why not have a grants program that gives money to CS artists for installments at Burning Man, or Houston's art car parade, for example? Get the CS-arts-couch off the couch and into the communities.

CS can no longer use the excuse that they're too poor, or unfunded, to provide quality programming that aids their mission. The CS staff can no longer say, "We're just a little non-profit...we can't do a good job."...barf. CS has done a great job in collecting a big pot of money and needs to spend it appropriately, legally, and imaginatively on hooking up hosts with guests around the world.

**********************************************

(ps: if you think we are hard on the CS staff, here, on BS~R, you don't know how non-profits work. I, for example, am now laboring over my daughters' financial aid forms for application to US universities (required now by all university applicants)...all of these are non-profit sites devoted to getting kids into good schools. So they're all really nice, and forgiving, right?
Wrong...They want my 2009, 2010 (not calculated yet...) and projected 2011 income and tax details by February! arrrgh...we dont' have those numbers yet, but I have to do complicated estimates and turn them in anyway.

We've been super patient, by contrast, with CS financial staff...)


Posted January 21st, 2011 - 4:03 am by from Alexandria, United States (Permalink)
"...knowledgeable input..."

thank you Claudia:)

...and thanks to Uli who keeps good track of details, historically and, in real time:)

Posted January 21st, 2011 - 8:13 am by from Paris, France (Permalink)
Margaret, I believe the following expenses need to be included in Fundraising Expenses:

Bank & Credit Card Processing Fees: 67,976.31

and perhaps this:

Temporary Help - Contract: 47,309.30

Also, my understanding is that the people handling verification now are paid, contrary to Donna and Brian when they worked their you know what off for free. Their pay would need to be includedn as part of the salaries of staff dedicating their time to fundraising.

So the actual verification expenses are a multiple of what is stated in line 81111 and the ratio not quite that great.

Posted January 21st, 2011 - 10:57 am by from London, England (Permalink)
Can the 990 and audit details be posted somewhere publically - OCS for example?

Do we know who did the audit yet? Can they be contacted?
What exactly does the auditing process involve?

Posted January 21st, 2011 - 11:00 am by from London, England (Permalink)
"CouchSurfing has established and will maintain a savings reserve for the event of an emergency. The goal of the fund is to provide for approximately 2 to 4 months of operating expenses."


I thought they ALREADY had 3 months operating expenses on reserve from previous years expenditure. Why no mention of this money?

Posted January 21st, 2011 - 11:48 am by from Paris, France (Permalink)
Niall: "Can the 990 and audit details be posted somewhere publically - OCS for example?

I don't believe the IRS 990 form has been filed yet. CS filed the 2008 form only on April 7, 2010.

"Do we know who did the audit yet? Can they be contacted?
What exactly does the auditing process involve?"


There is no mention that these figues are in any way independently audited. They were prepared by the CS accountant "Easy Office" (accounting fees $ 16.877).

"I thought they ALREADY had 3 months operating expenses on reserve from previous years expenditure."

As you can see they have no problem spending almost all the money they make, which automatically increases "operating expenses". To meet their self-imposted objective they need to build up an ever increasing and almost insane "reserve", which is actually pretty useless. My estimate of $ 275.000 sitting there idly so that CS staff can go on going on retreats etc. even in the case of an emergency covers 25% of total 2009 expenses, i.e. 3 months. Of course if one really wanted to keep an emergency reserve, it would make more sense to have it cover just the vital expenses to keep the website running, a very small fraction of total expenses.

"Why no mention of this money?"

Good question. It wouldn't be in the annual income and expense statement, but it definitely should be kept track of somehow. Let's hope it will be part of an independent audit, it that ever happens. You can see it in the balance sheet of the 2008 form 990 under "assets", bottom of page 1. Which confirms my estimate. 225.000 + 50.000 = 275.000 end of 2009, to which you have to add the probably substantial 2010 surplus not yet published.

What a luxury to keep something like $ 350.000 (including 2010) and growing sitting idly in an "emergency fund" and earning close to no interest. On the other hand, if it wasn't put aside they would just spend it on non-essential stuff, as with much of the other "operating expenses". And it is not unlikely that they will need it for legal fees and penalties once the IRS etc. take a closer look.

Posted January 21st, 2011 - 1:17 pm by from Alexandria, United States (Permalink)
thanks Uli and Niall,

Uli, I took your suggestion that the entire credit card fees, and (I took) 1/2 of the temp help costs, should go toward Fundraising expenses. I actually dont' know if they do, for sure, without a better itemized financial document, but I get your point: the primary function of verification is fundraising so allot those expenses to that category.

I revised the numbers and got this for Fundraising Expenses, Fundraising Efficiency, and Administration Expenses (less the fundraising add-on):

1. Fundraising Expenses: FE/TE = $88,457.85/ $1,101,307.08 = 0.0803 or 8% (Still a good percentage)

2. Fundraising Efficiency: FE/Income = $88,457.85/ $1,168,642.45 = 7.6 % (also still good.)

3. Administrative Expenses: AE/TE = $912,453.35/$1,101,307.08 = 0.8285 or 83% (Still a terrible administrative expenses percentage...it needs to get below 33%)

Posted January 21st, 2011 - 10:22 pm by from Alexandria, United States (Permalink)
hey guys,

if you look at the ratings tables that Charity Navigator uses to evaluate the charities, we can compare the CS scores with what they deem to be acceptable.

I'm copying information from this link:
http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=48

Charity Navigator recommends >33% for program expenses, with higher scores being better...anything less than 33% gets a zero rating (bad). CS' Program Expenses are 3.56%.

Charity Navigator recommends, generally, from 0-30% for Administrative Expenses...any score over 30% gets a zero rating (bad). CS (recalculated) Administrative Expenses equal 83%.

Charity Navigator recommends, generally, from 0-25% in Fundraising Expenses. CS (recalculated) Fundraising Expenses are 8%, which earns a rating of 10 (great!).

Charity Navigator recommends, generally, from 0-$1.00 on Fundraising Efficiency, with lower scores being better. CS (recalculated) Fundraising Efficiency is 7.5 cents (great!)

What to do?

Obviously, CS needs to shift some of the Administrative spending over to program spending. CS is doing great with fundraising, in terms of effectiveness (perhaps not in the eyes of the anti-verification people, but, strictly looking at the numbers, they've put out an effective, efficient, fundraising mechanism).

If CS managers shifted all administrative expenses related to meals ($69366.37), Travel reimbursement ($101979.18), Travel ($33,856.80), Rent ($249,474.19) and Utilities ($6,618.16), they would cut their Administrative expenses in half...going from an Administrative Expenses score of 83% to 41%...nearly in line with the recommendations of Charity Navigator.

If they added this amount to programming, and actually spent this money on high quality programs which benefited th CS general membership, the Program Expenses total would go from the 2009 $39,195.95 (rating 3.56%) to $500,490.65 with a rating of 45% (anything over 33% gets a top score of 10 with Charity Navigator).

...they can even keep their insane paper clip expenditures, as Claudia noted. This shift, it seems to me, would be an obvious move toward greater charitable integrity in spending.

Posted January 22nd, 2011 - 9:24 am by from Trieste, Italy (Permalink)
Well, Margaret, in my opinion everything that was spent to run the site (because that's the service CS provides) like money paid for buying or renting better servers, for paying decent developers etc should be counted under what you call "Program Expenses". I'm not saying you can reach 33%, but things would surely get better.
-Marzio-

Posted January 22nd, 2011 - 2:28 pm by from Alexandria, United States (Permalink)
That's actually a great point, Marzio; thanks

Since the whole charity is, pretty much, the website, I think you could indeed argue that the server costs are not administrative, as you would categorize them for other charities, but part of the programming. I'll redo the numbers when I get the time and see if the administrative percentages come down a lot; thanks for looking at it in a new way

Posted January 22nd, 2011 - 2:48 pm by from Paris, France (Permalink)
You can crunch the numbers in many ways and it may be intellectually stimulating but until the main questions aren't answered it remains all very abstract (at least to me):

1. What is the charitable cause here?
2. What are the contributions to that cause?

We don't know what has persuaded the IRS to refuse 501c3 charity status. Probably a combination of not being convinced of the charitable character of what CS does and improper governance, including consistently late filing of financial documents.

Of course the official speak is still that CS wants to be a charity, but if we know now that it has been refused and that they will never be able to obtain it, does it make sens to apply these criteria?

Can CS legally continue to lead people to believe this is still a reachable goal and ask for donations under that assumption and how much money do they have to set aside for legal fees, penalties and reimbursements for solliciting donations under false pretenses?

Posted January 22nd, 2011 - 2:58 pm by from Istanbul, Turkey (Permalink)
"If CS managers shifted all administrative expenses..."
"If they added this amount to programming..."

The French have a wonderful saying: "With the concept of 'if', you could fit the Eiffel tower in a bottle." In Turkey, we are a bit more crude, and say that "If my aunt had different anatomical attributes, she'd by my uncle!"
:)))

I love your positivism, Margaret.

Posted January 22nd, 2011 - 8:45 pm by from London, England (Permalink)
That one about your aunt is universal, Serhat... ;)

Posted January 24th, 2011 - 2:56 pm by from Alexandria, United States (Permalink)
I think the IRS turned CS down for the 501c3 for a variety of reasons, but, hear the main one was it deemed the mission to be primarily social, rather than charitable. Regardless, it's still currently legally designated as a public charity and should be evaluated as such, IMO.

One solution: any of CS' peripheral programming could apply for 501c3's on their own, as separate ventures which support the mission of Cs. The Burning Man group, the Black Rock LLC, did this...they have 3 charity 501c3 groups which raise money for good causes associated with the B.M. mission. CS could, for example, make CS Cares a separate group under its corporate umbrella...it could be a separately run org with its own BoD...and these folks could apply for a CS Cares 501c3 to raise money to benefit CS local communities in need of natural disaster relief....just an example.

I'm just trying to think of alternate ways CS could sustainably plan for a future which, surely, will not tolerate the type of financial decision making shown on the 09 financial report. Verification cannot be the sole fundraising mechanism forever; it's finite....and huge travel and rent expenditures can't be defended anymore. I think CS' function and mission will continue to be relevant; I'm trying to think of ways CS can be organizationally, and legally, sustained for the long term.

Posted January 24th, 2011 - 3:37 pm by from Paris, France (Permalink)
Margaret: "I'm trying to think of ways CS can be organizationally, and legally, sustained for the long term."

I hope the General Manager, CEO and Chairmain of CouchSurfing International Inc. will know to appreciate that and find it useful :-). There are two ways to go here: Make the organization fit the claims, or make the claims fit the organization. Somehow I have the feeling it will be the latter, theory coming into line with reality rather than reality getting changed.

Posted February 3rd, 2011 - 9:39 pm by from Alexandria, United States (Permalink)
hi everyone,

I received a nice note from Casey Shultz, director of the CS legal team, on Feb 2 regarding the 2009 Form 990 and independent audit. I think you all recall that I had requested copies of these documents on January 1, 2011. Legally, all non-profit orgs are required to provide the past 3 years filed tax returns and audits to anyone who requests them, or face monetary penalties, with in 5 working days and not exceeding 2 weeks (for emailed requests). I requested a month's prep time...and said I wouldn't consider the documents 'late' until after 30 days had passed.

http://www.irs.gov/pub/irs-drop/n-07-45.pdf

http://www.irs.gov/pub/irs-tege/eotopico00.pdf

http://www.hallrender.com/library/articles/222/IRS%20Publishes%20Interim%20Guidance%20Regarding%20Disclosure.pdf

Anyhow, when I didn't receive anything on February 1, 2011, I sent in a complaint to the IRS. Casey wrote to me on Feb 2 and said that CS is "in the process working with state and federal regulators to finish filing our returns. The delay is due to the 501c3 process and the many changes that we have had to make to our application recently. We will let you know when we have something to send you." (thanks Casey!)

I thanked her and sent a note to the IRS retracting my complaint.

...so...what does this all mean?

Short story: The 2009 tax return is not ready. CS is probably in some bit of legal limbo (ie: trouble) because of their 2009 finances....the extent to which I'm not sure.

Long Story: CS is in conversation with state and federal regulators about the details of filing, and auditing, recent tax returns. I'm betting that the CS lawyers are trying to back-spin the 2009 spending patterns to make them fit the CS' legal designation...which explains weird stuff like that we've pointed up ($37k office expenses, no programming budget for a non-profit that is supposed to spend its money on programming, insane rent-travel costs, for example). It sounds like they are still trying to get the 501c3, through appeals?, and are in lawyer-lock at the moment...as both sides try to sort things out. This is all speculation...but is a hypothesis which would explain how 990's are held up by legal wrangling.

I've overseen ~35 small 501c3 arts orgs for 5 years now, as a city volunteer, and I honestly have no knowledge of any one of them *ever* being in conversation with the state, or federal, regulators. These orgs range in size from tiny (annual budgets of ~$2,500) to moderate (annual budgets of $4-5 million)...and drama factor has always been nearly zero: they're all really compliant and tight.

Part of CS problem: unlike my city's arts orgs, CS has had literally no independent oversight of its governance or finances during its existence. They received poor (or no) legal/management advice, early on, for risky or ad hoc decision-making, that is now putting them into a precarious position and requires explaining to the oversight-big-dawgs: states' attorneys general and the IRS.

If orgs require detailed oversight of themselves from volunteer people like me, or their BoD, early and often, from the beginning...with numerous checks and balances....mistakes usually are captured and corrected before the heavy regulators get involved....pity.



Posted February 4th, 2011 - 12:13 am by from London, England (Permalink)
It is a pity.

I don't understand why you withdrew your complaint though.
Seems that the only way to get timely movement on these things is to force them. With that in mind I'd advise re-complaining, if possible.

Do you have to be a US citizen to submit a complaint to the IRS?

Posted February 4th, 2011 - 12:21 am by from Paris, France (Permalink)
Thanks Margaret. I'd be very surprised if - even with the $111,952 budgeted for legal fees in 2010 - CS managed to force the IRS to give them 501c3 charity status, especially being in an extremely week position having consistently missed filing deadlines and not respected basic goverance rules.

Like Niall I wonder why you withdrew your complaint (based on "We will let you know when we have something to send you"?) and what it takes to file one.

Posted February 4th, 2011 - 3:00 am by from Alexandria, United States (Permalink)
thanks guys

I retracted my complaint to give CS time to get their financial house in order. I want them to improve and survive.

Anyone can file a complaint here; you don't need to be a US citizen:
http://www.irs.ustreas.gov/charities/article/0,,id=135032,00.html

y'all have a good night:)

Posted February 5th, 2011 - 4:02 am by from Alexandria, United States (Permalink)
few things to add:

If you would like to file a complaint about CS to the IRS, you must fill out a form (...ok, it's the federal government...what did you expect?) and either send it electronically or print it and send it snail-mail using the address I linked above. The form can be found here:
http://www.irs.ustreas.gov/pub/irs-pdf/f13909.pdf

Also, I guess I want to further explain why i retracted my complaint to the IRS, but also: why I complained in the first place. Rather than joining those CS members who don't interest themselves, on principle, in financial details, I consider financial details to be where the rubber meets the road, in terms of idealistic integrity...because money always corrupts. I don't buy the image of the bohemian dreamer unless he leaves a tight, honest, money trail. This, I think, is an example of a very interesting sociological divide that exists within the CS membership.

Many people joined CS because of its embrace of idealistic bohemia and, consequent, rejection of practical, material-based, or financial matters. I understand the appeal of this: that the world can be united in love and trust...and financial details will fall in place, when people honestly reach out to one another and trust each other under a general spirit of generosity and tolerance. i think that this scenario happens, actually, within small scale settings involving small groups of people...but breaks down when the leaders of very large groups, whose members do not have direct contact among themselves, demand blind trust from their members.

Demanding blind trust is a no-no in large groups....trust in a leader must be earned.

I think we can all come up with several examples of how charismatic leaders of large groups have demanded blind trust (and money) from group members to earn their loyalty and membership...it's a seriously bad strategy with damning historical precedent...because you'll definitely keep the loyal ones who are desperate to belong, but will definitely alienate the smart, skilled, ones who question why they need to hand over their brain to belong. These critically thinking members are exactly the ones needed by the group for its continued competence because they, emotionally or professionally, dont' need group membership; they're doing fine on their own, and can trade on their skills. If membership involves never questioning stupid decisions, they'll move on.

I think CS attracted these smart volunteers quickly, as early adopters interested in changing the world, but alienated them later...by the management's mute dismissal of criticism, generally...and their requirement that you must not question the leadership.

I think that the CS founders did a fantastic job of projecting an air of free acceptance, of tolerance of difference, of love for your neighbor, of burlesque art in life...but, took it way too far beyond the honeymoon phase. They continued to pretend that they were in the cast of "Rent" (...sing it: "five hundred twenty-five thousand six hundred minnnnn...its")....when they were actually, legally, professional non-profit managers with responsibility to their donor base....a responsibility they ignored.

The managers screwed the org by not seriously applying for the 501c3 in 2007, by spending donation income indiscriminately, by squandering good will among invested volunteers who had committed their hearts, and by generally acting the fool in nouveau ghetto-fab (when the joke was beyond stale).

That situation truly is a pity.

...yet: I think they never did any of this maliciously...which is why I retracted my complaint. I know that some of you guys think that CS is run by $cammers...but I think not. I continue to think that the management was caught up in giddy arrogance and hubris, certainly, but not money-lust....and that they were incompetent: they didn't know what they were doing until it was too late.

(unless they get the 501c3, it's too late for CS, as a non-profit...they'll need this tax exempt designation to have their status as public charity renewed...and they won't get it; I guarantee it).

So, I think the only way out is for them to restructure. See discussion here:
http://www.couchsurfing.org/group_read.html?gid=7621&post=7822692

sorry for the long post, ya'll...have a great weekend



Posted February 5th, 2011 - 6:33 am by from London, England (Permalink)
Just (at this stage) purely for info's sake: in order to complain, you must first contact CS yourself, ask for the form 990, wait 14 days (or 30 days?), not get it, and THEN contact the IRS..... is that correct?

What's the best way to contact Casey Ann Schulz? (I assume she is the right person?)

Posted February 5th, 2011 - 6:34 am by from London, England (Permalink)
Meaning (just to clarify my question) : does each individual person wanting to complain have to contact CS individually to ask for the forms first?

Posted February 5th, 2011 - 9:35 am by from Paris, France (Permalink)
Margaret: "I think they never did any of this maliciously...which is why I retracted my complaint. I know that some of you guys think that CS is run by $cammers...but I think not."

I believe they started out with good intentions and then became increasingly malicious using and abusing volunteers and making fund-raising via "verification" more and more sneaky to the point that people are mislead on purpose to pay before they realise it is neither necessary, nor really useful, and only done by a small minority of not even 8% of members.

They may have locked themselves into a legal status they didn't understand, but they clearly understand that they need to file and publish financial documents at certain dates, have an independent board of directors, nobody forces them to abuse volunteers etc.. I won't give them a break for that and it hasn't changed because they said "We will let you know when we have something to send you".

Posted February 5th, 2011 - 9:35 am by from Istanbul, Turkey (Permalink)
@Margaret
"the management was caught up in giddy arrogance and hubris, certainly, but not money-lust"

This is a thin line that is so easily crossed. Surely, no-one was twisting arms when deciding to go to those exotic places, and living in fancy accommodations!

I agree that it probably didn't start with this objective in mind. However, once there, it must have felt pretty good :)

The big shame would be if the site had to shut down because of all this incompetence!

Posted February 5th, 2011 - 8:31 pm from Albuquerque, United States
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Posted February 7th, 2011 - 3:28 pm by from Alexandria, United States (Permalink)
Thanks everyone

yeah it's sad, for sure, because all of this mess was so preventable. Many people tried to communicate to the management that changes were needed, but were ignored.

Niall, I think anyone can go ahead and file a complaint with the IRS now, if they feel so moved, because I, as a general member, indeed requested the 990 and audit and was denied...and the complaint can be about that: a general member requested the documents, waited an appropriate time length, and did not receive them.

If you need the legal team's contact email it's here...either address seems to work:

casey.shultz@couchsurfing.com

casey.shultz@couchsurfing.org