General Ramblings: New Year, New Problems

February 1, 2012       Paul Clolery      

A dozen companies filed paperwork in California on Jan. 3 to legally become “benefit corporations.” These are models that are supposed to be structured to have public good as part of a for-profit mission.

With complaints that there are too many nonprofits, and consumers being beaten over the head with nonprofit/for-profit marketing arrangements, this type of structure will serve to further muddy the water between donor and intended charitable effort.

There are safeguards in the new rules that shield corporations from shareholder suits based on the percentage of profit that goes to charity before dividends. California’s law previously mandated that shareholders’ interests came first, before any other concerns.

Hawaii, Maryland, New Jersey, New York, Vermont and Virginia have similar laws on the books. It’s estimated that there are 100 companies so far that have signed up to change their registrations in the various states. But, there’s really no reason these entities are needed. There are so many corporations giving back without a special designation – Target, UPS, Starbucks, McDonalds, etc. Even the Bar Association in California thinks this is a bad bill, with no real guidelines on corporate responsibility.

The Giving USA Foundation estimated corporate giving at $15.29 billion for 2009, the most recent year available. A hefty portion of that was by pharmaceutical companies dumping drugs on international charities at inflated value estimates. Overall, giving was pegged at $291 billion. Thus, actual giving by for-profit firms is sand on the beach compared to what individual donors give.

If a company wants to do good and has it as part of its DNA, that’s great. There is no reason to legislate rules to give them a special purpose. It’s confusing to the untrained and there will be donor backlash against the sector when the inevitable corporate sweatshop stories hit the media.

And, you can’t say that business needs the help. This year’s Super Bowl ads, the barometer of the U.S. economy, sold out at a record average price of $3.5 million for a 30-second spot. Revenue for a normal NFL game is about $3 million for the entire game.

Isn’t it amazing how big business always wants legislative protections but then screams that the tax burden to enforce those regulations is too expensive?

Changing gears a bit, New Jersey Gov. Chris Christie did the right thing when he pocket-vetoed a bill that would have put onerous restrictions on volunteer emergency medical rescue squads in the state. Under the guise of regulation, the state’s big hospital systems are attempting to take control of the basic life support system (BLS). The hospitals – rightly – already operate the advance life support system – generically known as the paramedics. The BLS system is the emergency medical technicians who are the first responders. The basic EMT course is 100 hours and the state is pumping up the number of hours by anywhere between 50 and 100 percent.

You can’t argue against more training. You can dispute the manner in which it is done. For example, the state made the EMT instructors (most of whom are volunteers) jump through new hoops to keep their licenses. The state ran mandatory programs 9 to 5 during the business week. Volunteers had to burn a vacation day or lose a day of pay to get there. Of course, the state did offer one session on a weekend – in a corner of the state where volunteers from the south would have to fight Jersey Shore (vacationers, not Snooki) traffic to get there.

A full basic EMT course run by the volunteers would cost the volunteer about $100, for books and a stethoscope. The state’s community colleges are running the same program for $1,500. That’s going to decrease the number of volunteers available and eventually the hospitals or municipalities will have control of the BLS system, too.

So instead of a volunteer service showing up when someone has chest pains and charging nothing, the hospitals can bill $1,300 for the run.

Let’s do the math. A hospital system near our office pays its EMTs $15 an hour. Let’s round it to $20 for tax and limited benefits since most are per diems. You need two EMTs per rig. You need three crews for a 24-hour period. That’s 40 times 24. That equals $960. Round it up to $1,000 and double it to pay for insurance. After the two runs the rest of the day is gravy for the hospitals while a vital community resource is destroyed.

This isn’t about training. It’s about greed. If the state wants better trained emergency personnel, put an educational system in place that makes sense for the basic skills and for refreshing skills and learning new practices. More regulation isn’t the answer since the state already is months behind in re-certifications and only audits the continuing education process. The rescue squad in the governor’s neighborhood is all volunteer. It’s in his best interest to make sure it is staffed so response time is minutes, not the half hour it would take to dispatch from the nearest hospital. NPT