Pharyngula

Would you invest in Answers in Genesis?

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.

AIGFinances

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?

Comments

  1. #1 T.M. Mackiewicz
    January 25, 2015

    Much like the terrible Christian politicians, books, music acts, and other knock offs of real talent, businesses, and/or products, one can never ascertain whether they will fail from not making good business decisions, offering desirable products, or providing a superior service due to the collection plate cushion and brand loyalty they all tend to have.

  2. #2 Eric Lund
    January 26, 2015

    Now I’m no economics whiz, but it seems to me that having expenses that are significantly greater than revenues is a bad thing.

    If your goal is to make a profit, whether to pay to shareholders or (more likely for a nominally nonprofit organization like AiG) subsidize some other part of your organization’s operation, then yes, it is a bad thing.

    If, however, your goal is to provide yourself with sufficient income to maintain the lifestyle to which you have become accustomed, then you’re not going to pass up a good grifting opportunity like this. The trick is to avoid making it too obvious to the rubes whose donations support you.

    It is impressive that, from 2007 (presumably when the “museum” opened) through at least 2013, expenses have consistently been 150-160% (if I’m eyeballing the chart correctly) of revenues. Also, that revenues peaked in 2007 and have been steadily declining since then (about a 25% net decline from peak). Do they go through the motions of rotating exhibits at this “museum”? Or is this one of the purposes of the Ark Project?

  3. #3 Trottelreiner
    January 26, 2015

    Err, from the POV of an economist[1] even if the “museum” might seem a financial sinkhole, it is likely to further financial gain; for starters, it adds publicity, people visiting it might go on to drink the whole Kool-Aid[2] etc.

    Problem is, correlation and causation are tricky, and the “museum” expenses and total income being somewhat parallel might mean the “museum” increases total income or a certain, somewhat fixed percentage of total income going to the “museum”.

    Still, the “museum” opened in 2007, which necessitated a long preparation phase, so the peak in expenses is most likely not a short-term decision. OTOH, in the same years the “museum” was built (and likely already generated some publicity) total income more than quadrupled, though when it finally opened, the increase was somewhat smaller,

    So my personal take on the Ark Encounter is they are likely to generate more publicity, increasing total income. Whatever, the problems with total income indicate they need some austerity program. We got some guys in Europe specialising into this, would you take them?

    [1] Yes, I feel dirty doing this; worse than modeling the evolution of coerced copulation…
    [2] Err, no offence to Jim Jones’ victims

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