Wheels Falling Off Green Party Wagon

Here are 3 analysese on the GPC financial crisis that I blogged in the last few days in that dissident Green blog mentioned by Akin in the article.

Shit Hits Fan if there is an election in March

Even cutting election campaign spending to half what it was in 2008, will require campaign borrowing of about $1.5million. That plus the existing unpaid bank loan will put the GPC with the same $2.5M total debt it had at the end of the 2008 campaign.

Except that this time around the rebate on campaign expenses would also be half what it was for the 2008 election: $0.75M instead of $1.4M.

In 2009 that $1.4M campaign rebate went to loan payments, and when it was gone at the end of the year, you had $1million in loan payments for 2010 that you could not and cannot make.

If there is an election in March you'll have essentially the same debt to repay, but only $0.75million in rebates, leaving at least $1.5million in loan payments that you even more cannot pay. And the cash flow on that will bite really hard almost immediately.

If there is no election, then the inevitable reckoning just moves off to sometime in 2011.

GPC Financial Crisis, Fundraising, and Leadership

I'm not sure what possessed your brain trust to plan for coming out of the 2008 election with a $1million dollar net debt.

Maybe they thought they could maintain something close to the fundraising pace of the second half of 2008. That would have allowed paying off the debt in about a year, which is what you should be able to do. But you don't PLAN for maintaining a pace you had during a predictable fundraising peak.

Paying off a million dollar debt in the requisite timely fashion is WAY more than twice as difficult as paying off a half million dollar debt. You are MUCH more than twice as likely to fail at doing it.

But that's water under the bridge now. The $1million hangover has to be 'digested'. So how is the Leader and brain trust dealing with this now?

Not well, to say the least. They didn't touch the debt for more than a year... and did nothing about it even when well before mid-year there was a systemic problem with paying ANY of the debt down, let alone the whole million.

They spent another 8-9 months making no changes, when getting paid down before the next election is absolutely critical.

Now they have belatedly come around to making deep spending cuts. 4 out of 7 organizers are gone [not to mention preoccupation with other tasks of 2 out of the 3 remaining].

As noted earlier in the discussion, even with more deep cuts, the bulk of that $1million hangover is going to get bumped to next year.

The consequence of that slowness is that even with an election campaign budget sliced in HALF, there will be even more debt after the next election than there was after 2008. Because of the debt load carried forward, drastically less money to spend in the election, AND debt growing anyway.

The only way to stop this visious cycle is to pay off virtually all debt before the next election.

There just aren't enough cuts available to achieve that- even laying off the ENTIRE staff [Leader included] and ending revenue sharing would not be enough cuts to pay off the debts in a year.

The only way that debt is going to be paid down in a reasonable period of time is to increase fundraising.

Fundraising 2008 -- 2009
Q1 end Mar 210,000 211,000
Q2 end Jun 214,000 192,000
Q3 end Sep 660,000 239,000
Q4 end Dec 546,000 ?

Paying off the debt over 5-6 quarters might keep the wolf at bay. But even with the deep spending cuts that are being made, that would require increasing fundraising by at least 50%.

For a small party with lots of untapped fundraising capacity that probably is doable. But not by this lot.

Look at the trend in the table above. GPC fundraising tracked up with the rise of May's visibility in 2008.

Conversely, fundraising has sunk with May's invisibility in 2009. The first quarter for 2009 was as high as the previous year, but a lot of those funds would be part of the usual post-election bump.

Fundraising since hasn't gone way down, but it has settled at a consistent lower plateau... while it needs to go UP at least 50% to put the $1million hangover to bed in something at least close to a reasonable time.

And what is the prospects of this outfit pulling off that 50% increase?

In 2008 they got the fundraising bump riding May's coat tails. No coat tails in 2009, and they seem incapable of changing that.

Fundraising doesnt have to be so reactive- going up only when you do. But its even less likely this outfit can boost fundraising- which means outreach to more people rather than hitting up the same people over and over. In fact they'll be lucky if donor fatigue doesn't start biting them harder.

Like organization building, fundraising does not have to ride an external wave. And you can't afford to wait for the next one of those.

But growing organization building from within requires leadership.

You have a Leader, but you don't have leadership.

Beggaring the National Campaign

National campaigns get a 50% rebate on their election expenses. So this is a crucial part of campaign budgeting.

To the degree that late in the 2008 campaign the Liberals cut $4million spending that really hurt, because they did not feel they could go that exta $2million in debt to get the $4million in planned advertsing buys.

All parties- even the obscenely rich Conservtaives- have to borrow for general elections. And the GPC debt load right now is going to place severe restrictions on how much can be borrowed for the national campaign.

The GPC is pouring money into the May's Saanich - Gulf Islads campaign [SGI], and will until the general election comes.

Even in the hypothetical case of shutting down the SGI campaign, the GPC is so limited that the national campaign would have to be drastically trimmed anyway.

So what goes into SGI- whether it is direct cash expenditures or paying for national staff who are there now- is that much less for the already much reduced national campaign.

Only you double that.

Because money spent campaigning before an election gets no rebate.

So $5,000 spent this month in SGI is $10,000 less for the national campaign.

And there's a number of those $5,000 that are $10,000 being spent every month in SGI, for many months to come if the election is not in March.

So, you already have an invisible Leader compared to what you had in the year plus before the 2008 election.

Plus, what will be a LOT less advertising in a chopped and continuously beggared national campaign.

And the likely impact of those two on the ultimate ballot box vote share is _______ ? With any reduction meaning the same reduction in the subisdy that is 2/3 of the GPC income.

That is quite the legacy under construction: indigestible debt load, fundraising that is flat or declining, and nothing being done to ensure that the vote share and subsidy do not head south.

I think I can do even better- the lengthy series of posts can be boiled down to ONE point, highlighted below.

But that won't make sense without a prior brief summary of the context.

I heard rumours of financial difficulties in December, and probably as soon as others who got it 'word of mouth'. But the public info available was too old to indicate anything, and didn't engage in any guessing games given the lack of hard info.

Oddly enough, I got the key info from Elizabeth May herself. When she told Murray Dobbin that big fib about GPC finances, she chunked out some recent numbers that allowed me to indirectly get what I needed to have a snapshot of the GPC 2009 finances.

With all the info its clear that the GPC is in a very intractable place with its debt, and that even while May is acknowledging internally there is a problem, it is probably being massively minimized.

IE, given historical patterns, she and her crew were delivering it somethink like this "unfortunate we have to lay off the 4 of 6 organizers, but that will allow it to pay off the debt.

What those posts are about is

* no amount of cutting can free up enough to repay the debts as soon as required.

* that most of the debt will just be moved.

* and a description of some of the consequences that are now nearly inevitable.

When I wrote them there was no reason to think that May wasn't going to continue indefinitely bamboozling people. By running through the numbers it was hoped some people would take a look and ask their own questions.

Apparently, people didn't stop at asking a few questions. And it was underway without me knowing it.

mimeguy wrote:

 

Debater - "What is the main problem in the Green Party?  Is it that the party is now too closely associated with the leader rather than with the ideology of the party itself?" 

That really depends on who you talk to. For some of us the association with a sole personality is a problem that needs to change. Elizabeth remains popular to many people who couldn't care less about internal politics.

You could say that the same highlighted attitude runs to much of the governing Council, or at least did until quite recently... that even they do not or did not really care about internal politics.

Elizabeth May's background is one of very much running her show- which brought around her a group of like minded people who just go out there and do it, and do it their way. That isn't ideal in any organization, but it will work well enough in an NGO. People who don't like it go elsewhere.

Political parties attract a more diverse group of people, and there are few if any 'elsewheres' for them to go to. But Elizabeth May did not and has not changed her leadership style one bit. Its the Green party that had to change, and its totally predictable that in this case not everyone who doesn't like the new rules is going to leave. 

It sure looks like the vast majority of people who get to the GPC Council, and stay, are in that category of "we like Elizabeth, and thats it." And they generally extend that same attitude to the senior staffers who are themselves more than just loyal.

In this atmosphere, criticism of any kind can go nowhere. Dissident Councilors can say anything they want. But they will be pounced on, and discussion is impossible. Most who might be inclined to criticise just back off. Some of that uncritical majority may not beleive everything dished out by May and the top staff; but a) at bottom they don't care enough, and b) "that guy saying all that stuff is so angry and divisive." Most even of the more open minded probably don't even notice that May and her henchpeople are deliberately divisive. Not to mention highly manipulative and outright deceptive when 'need be'.

Bottom line: in toxic environments like that you can't have a discussion. So its no wonder that critical voices move outside. And the walls go up.

Also no wonder that when left to their own devices, some of the stuff the critics come up with is pretty off the wall.

Also not a big surprise that in such an immature organizational climate the general opinion shifts, on a dime apparently, from Councilors nodding their heads to whatever the Elizabth May and the brain trust say, to a sweeping "off with their heads."

One thing I'm wondering about:

It would seem that at a minimum that shift in the governing Council is a vote of no confidence in the senior management that just left and/or was disposed of. And further, that Council specifically does not like key financial management choices made.

I'm wondering who is percieved to be the primary authors of that management/direction: the now departed, or largely/wholy May herself?

Worth noting that even in an article that does not put the Green party in a good light, it is May and even the departed brain trust that get to give their version of events, while the existence of critics and criticism is just generally noted.

Not quiblling with whether this is to be expected, but May gets to give her selective and misleading account of the financial position. And the campaign director gets the featured quote with her straw person characterisation of what critics said about the GPC performance in the Fall by-elections. [Its not like the only two choices were to throw big resources into them or to just leave them to whatever the locals took the initiative to come up with. The NDP has always treated no-hope by-elections as opportunities for building. The GPC is smaller than the NDP even in its thinest regions, but members have every reason to expect it to at least do something propoertional.]

Well written and thought out.

And I dare say this is interesting and instructive for all of us who have an interest in how organizations in general, and parties specifically, conduct themselves.

I have some skepticism about your particular account here- and it is motivated mostly by understanding of organizations in general, rather than a disagreement about 'the details'.

I agree its not about the personalities, and the various dysfunctionalities would not simply go away if May and her leadership style did. On the other hand.... but I'll leave that until later.

"The campaign director was not let go based on performance." This doesn't surprise me at all. I noticed once before a former Green staffer referring to themselves as 'terminated'... and I knew they weren't 'fired' in the way most of us understand that. So I knew enough to wonder if the CD had really been canned as claimed. That said, my comments about use of sharp elbows stand, what goes around comes around, etc.

I think it goes without saying that if there is going to be a successful challenger to May, their campaign will not at all be built on May bashing. Thats what the critics do, not potential leadership rivals. On the other hand, you can bet the basic vision of a serious contender will build upon May's broadly perceived lackings [which for most members will translate as doubts, rather than full blown displeasure].

By the way, Iadmire your certainty that there will be a leadership race this year. It doesn't look certain to me at all. But I might see that different if I had a stake.

I'll just pick up one of your points for now.

mimeguy wrote:

I don't know if the NDP or other parties pay their executive council or key positions but some solution has to be found within the GPC structure to foster full time focus on governance. Here I am not talking about micro-managing. 

There is kind of no comparison between the two- and even if you compare the GPC to the smaller NSNDP. But the NDP actually has a higher proportion of the overall management load taken on by unpaid volunteers.

Financial discipline is deeply ingrained in the management of the NDP. Winging it like the GPC has done would be pretty inconceivable. So I really can't speak to what has to be done when you dont have that organizational culture to work from. We also get the benefit of elected officials and their staffs. They do little or none of the organizational governance lifting, but they provide a continuity and training ground, even when there are only a few of them as is true in some provincial sections.

mimeguy wrote:

A new leader won't change federal council.  We need to change federal council and the way it functions.

Having a new Leader will not in itself change Council.

But in practice, the only time that the kind of internal change you are talking about even has a chance is when leadership races put everything on the table. They don't solve problems, but theres a really strong case that leadership races are a pre-condition.

And if you follow the dotted lines from there, its unlikely change in governance would ever be more than a discussion on the margin as long as Elizabeth May is Leader. I doubt that she could or would even talk the talk except in the most general and meaningless way. But even if she did talk the talk, it would be extremely foolish to entrust her with the project. It would be akin to putting a thief in charge of the till after he makes an eloquent case that he is reformed.