Atlantic City News | Wednesday, September 15, 1999
Pageant's net assets still climbing, returns show
By Elaine Rose
Staff Writer, (609) 272-7215
A woman can never be too rich or too thin, or so the saying goes.
When Miss America 2000 takes her victory walk down the runway in Atlantic City's Convention Hall, no doubt she will be as thin as a supermodel.
And the organization that sponsors the 78-year-old beauty/scholarship contest has a bank account that would be the envy of many business enterprises, examination of its IRS return shows.
The Miss America Organization had a "fund balance" of $10,933,865 on Oct. 31, 1998, its returns show, up from $10,469,027 at the end of the previous fiscal year. The pageant's net assets have been climbing steadily over the last several years.
The pageant switched to a Nov. 1 to Oct. 31 fiscal year in 1994, to coincide with the annual contest in September.
Miss America has been exempt from paying federal income tax since 1944 under Section 501 (c) (4) of the Internal Revenue Code. But it must file annual financial statements with the IRS, which are open to public inspection.
For the first time in several years, the pageant spent more than it took in during fiscal year 1998, the returns show.
Net revenue (minus the expense of staging the pageant) was $2,961,241 and expenses added up to $3,165,968, for a loss of $204,727, the returns show. But unrealized gains on investments of $669,565 more than made up the deficit.
It cost the Miss America Organization $4,437,060 to put on last year's extravaganza in Convention Hall, but it took in $6,404,338 in sales of tickets, program books and other related items.
Miss America's stated "charitable" mission is to provide scholarships for young women. It spent $825,139 on that purpose last year. That is a $55,394 increase over the previous year's scholarship awards, or 11.2 percent of its gross revenue.
But it spent almost as much, $621,106, on staff salaries and wages. Part of that was for outgoing CEO Leonard Horn, who received $297,500 during the fiscal year, and incoming CEO Robert Beck, who received $29,375 during a short tenure. Horn's 1996-97 salary was $368,547. Beck's yearly salary is not part of the document.
The National Charities Information Bureau, which monitors tax-exempt organizations, recommends charities spend at least 60 percent of their income on their stated purpose.
Adding in $538,366 worth of assistance to state and local pageants, $417,114 in travel expenses for Miss America to promote her platform and a $25,000 donation to the Miss America Foundation, the pageant spent 24.4 percent of its gross revenue on "charitable" purposes.
The Miss America Organization pleaded poverty in 1994, when it asked the Atlantic City Convention and Visitors Authority for financial help to stay in Atlantic City. The ACCVA gave them a half-million dollar discount on the use of Boardwalk Convention Hall for five years.
That contract expired with the 1998 pageant. The pageant is renting the hall this year under a one-year agreement that contains the same terms as the previous agreement, according to John Samerjan, spokesman for the state Sports and Exposition Authority, which oversees operations of the convention authority.
The pageant is paying $32,500 to rent out the Boardwalk hall for the pageant and the authority is giving the Miss America Organization a $500,000 credit that goes toward the operational cost of staging the pageant in the aging hall. Samerjan said he did not know the pageant's cost of preparing the hall for the annual telecast.
Former CEO Horn repeatedly said that a strong bottom line was needed as a "rainy day fund" to tide the pageant over for a year or two in case of a financial disaster.
In a 1995 interview, Horn said that goal had been met and "every dime of excess revenue" will go to scholarships and the newly formed Miss America Foundation.
That was $2.6 million ago
