National Park Foundation: Better Communication of Roles and Responsibilities Is Needed to Strengthen Partnership with the National Park Service
Published: 2004-05-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 1967, the Congress created the National Park Foundation (Foundation)--a nonprofit organization with the sole purpose of providing private support to the National Park Service (Park Service). However, some Park Service officials have raised concerns that the Foundation's support is not meeting parks' priority needs. In this context, congressional requesters asked GAO to review the activities of the Foundation by determining the (1) Foundation's roles and responsibilities for raising funds to support the Park Service, (2) amount and kinds of donations the Foundation has raised between fiscal years 1999 and 2003, and (3) extent to which the contributions obtained by the Foundation assisted the Park Service in addressing park priorities.
section_title: What GAO Found
paragraphs: In accordance with its legislative charter, the Foundation raises private donations from a variety of sources and has broad discretion in how it distributes these donations to support the Park Service. In general, the Foundation's policy is to support systemwide projects that serve the Park Service and are not otherwise federally funded, such as supporting temporary transportation advisors to help alleviate congestion at national parks. Overall, annual private donations to the Foundation have more than doubled--from $18 million in fiscal year 1999 to $41 million in fiscal year 2003. Much of this increase has stemmed from the Foundation's concerted effort to target corporate donations, which accounted for the bulk of the donations received. Most of the corporate donations are noncash or "inkind," such as providing expertise to renovate the red bus fleet in Glacier National Park or providing electric vehicles to parks in California. Corporate donors typically specify how their donations are to be used. For example, one corporation donated funds to renovate a national monument in the District of Columbia. The Foundation, in consultation with the Park Service, decided to use these funds to renovate the Washington Monument. Because the majority of the Foundation's donations are restricted by the donors for a specific use, there are limited funds available to respond to some parks' requests, such as for fund-raising assistance or support for local nonprofit groups. Consequently, some park officials question the usefulness of Foundation donations and believe support should be directed at park priorities. In an effort to raise more discretionary funds and possibly better support individual park needs, the Foundation is expanding its fund-raising approach to attract more donations from individuals. The Foundation's efforts to assist the Park Service are hampered by poor communication and documentation problems. First, unlike most other partner relationships with the Park Service, the Foundation and the Park Service do not have a comprehensive written agreement that clearly describes the Foundation's fund-raising strategy and clarifies the roles and responsibilities of each partner. Second, the Foundation and the Park Service sometimes enter into verbal rather than written fund-raising agreements, thereby making it more difficult to determine the responsibilities of each party and whether commitments were met. Third, Foundation and Park Service officials disagree about the fund-raising strategy as well as the objectives for one of the Foundation's key fundraising programs. Both parties have taken initial steps to address these and other communication problems.

section_title: Letter
paragraphs: For the last few decades, the National Park Service (Park Service) has  relied increasingly on private donations in meeting its mission to promote  and protect the national parks.  Although national parks remain primarily a  public responsibility, parks benefit from other sources of support,  including individuals, corporations, and nonprofit organizations.  These  entities donate time, materials, and funds to support the park system.  In  1967, the Congress created an official national, nonprofit partner of the  Park Service—the National Park Foundation (Foundation)—to raise  private contributions for the benefit of the Park Service, its activities, or its  services.
The Congress and the Park Service have long recognized the important role  of private support in meeting the needs of America’s parks.  However, there  have been some recent concerns within the Park Service that the  Foundation is not supporting its priority needs.  In this context, you asked  us to determine (1) the Foundation’s roles and responsibilities for raising  funds to support the Park Service, (2) the amount and kinds of donations  the Foundation has raised between fiscal years 1999 and 2003, and (3) the  extent to which the contributions obtained by the Foundation assist the  Park Service in addressing park priorities.  You also asked us to address  several questions pertaining to the Foundation’s grant disbursements,  employee salaries, cooperative agreements, and contributions made by  Proud Partners, which are discussed in appendixes to this report.
To address the roles and responsibilities of the Foundation, we reviewed  the Foundation’s charter, as amended, and its bylaws.  We reviewed Park  Service rules and regulations governing fund-raising and donation and  discussed their applicability to the Foundation with the Department of the  Interior’s Office of the Solicitor officials.  To determine the amount and  kinds of donations the Foundation has raised on behalf of the Park Service,  we reviewed Foundation revenues from fiscal years 1999 through 2003 and  analyzed private contributions made to the Foundation during this same  period.  We also examined 41 cooperative agreements between the  Foundation and the Park Service or other federal agencies (see app. III).   Moreover, we reviewed strategic plans of the Foundation and its fund- raising goals.  To determine the extent that contributions assisted the Park  Service in addressing park priorities, we reviewed the Foundation’s  available discretionary funds and grants to Park Service units and  interviewed Foundation officials about how these funds and grants are  used to satisfy park requests.  We also reviewed the Foundation’s processes  over contributions.  We analyzed the Foundation’s financial statements for  fiscal years 1999 through 2003, which received an unqualified opinion by  independent auditing firms.  We did not attempt to track each park’s receipt  and use of contributions due to the time that would be required.  Appendix  I provides further details about the scope and methodology of our review.
We conducted our work from August 2003 through May 2004 in accordance  with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: The national park system is comprised of 387 parks, including a diverse  array of national parks, military parks, national monuments, national  historic sites, recreation areas, and other designations.  The Park Service  manages the park system and is charged with preserving and protecting  these public lands for future generations.  To manage this diverse system,  parks are arranged under seven regional offices.  These offices offer  administrative or specialized support that is not always available at the  local park level.  Within these regions, a superintendent manages each park  and has considerable decision-making authority over local park operations.
Federal appropriations to the Park Service have increased from about $2  billion to about $2.5 billion over the past 5 years, but these funds still fall  short of addressing system needs.  For example, the park system has a  maintenance backlog estimated to be about $5 billion.  In addition to  federal appropriations, the Park Service relies on support from various  sources.  For example, the Park Service receives additional support  through (1) admission and user fees collected at park sites; (2) franchise  fees paid by over 600 park concessionaires; and (3) donations from various  individuals and groups, such as nonprofit organizations, which provide,  among other things, technical, volunteer, and financial assistance to parks.   The Park Service is actively increasing its partnerships with nonprofit  organizations as an additional source of support.
In 1967, the Congress chartered the Foundation as the official national,  nonprofit fund-raising partner of the Park Service.  The Foundation’s  primary purpose is to encourage private contributions that benefit park  programs, activities, or services.  The Foundation’s charter was expanded  in 1998 to assist and promote fund-raising at individual national parks.   The Foundation is governed by a board of directors.  The Secretary of the  Interior is the board’s chairperson and appoints all board members, who  serve without pay or other compensation.  With the exception of  appointment powers, most of the chairperson’s responsibilities for  overseeing Foundation operations are delegated to the board’s vice  chairman, who is the private citizen leader of the board.  The Foundation  has a staff of about 40 employees, including a chief executive  officer/president who is responsible for managing the Foundation’s day-to- day operations.  Although congressionally chartered, the Foundation does  not receive federal appropriations.  Its expenses are paid from the revenues  that it collects.
The Foundation’s revenues and expenses have dramatically increased in  recent years.  Foundation revenues more than doubled from about $24  million in fiscal year 1999 to about $52 million in fiscal year 2003.  Similarly,  the Foundation’s expenses, which are mostly contributions to the parks,  have increased from $16.5 million to over $48 million during this period.   Figure 1 show the trends in the Foundation’s revenues and expenses for  fiscal years 1999 through 2003.
The total Foundation revenues for fiscal years 1999 through 2003 amounted  to about $200 million.  Of these, contributions (cash and in-kind) were the  largest category of revenues, accounting for about $160 million, or 80  percent.  Other revenue sources included income from investments,  payments from federal agencies, litigation settlements, and fees imposed  for services provided to other nonprofit organizations.  On the other hand,  the Foundation’s total expenses were about $176 million during this time.   The majority of these expenses were for direct program support and  grants, amounting to $160 million, or 91 percent, of all expenses.  Other  expenses were for general and administrative costs and fund-raising costs.   These costs included rent payments, purchases of equipment and supplies,  and salaries for administrative personnel.  Figure 2 shows the Foundation’s  total revenues and expenses for fiscal years 1999 through 2003, by category.
section_title: The National Park Foundation Has Considerable Discretion in Raising and Distributing Private Donations to Parks
paragraphs: The Foundation has considerable discretion in raising and distributing  private contributions to the Park Service.  The Foundation’s chartering  legislation does not prescribe a specific process to be used by the  Foundation in raising donations for the Park Service.  The Foundation has  determined that systemwide projects that are unlikely to receive federal  funding have the greatest potential for fund-raising success.
subsections: section_title: Legislative Charter Provides Broad Discretion in Fund- raising
paragraphs: The 1967 legislative charter provides the Foundation with broad discretion  in determining its fund-raising approach.  Under the legislation, the  Foundation is authorized to “accept, receive, solicit, hold, administer, and  use any gifts, devises, or bequests, either absolutely or in trust of real or  personal property or any income therefrom or other interest therein for the  benefit of or in connection with, the National Park Service, its activities, or  its services.”  In 1998, the Congress amended the Foundation’s charter and  also required it to “design and implement a comprehensive program to  assist and promote philanthropic programs of support at the individual  national park unit level.”
section_title: Fund-raising Is Targeted at Systemwide Projects That Are Not Federally Funded
paragraphs: In general, the Foundation attempts to secure private support for  systemwide projects that are not federally funded.  Foundation officials  refer to this selection approach as its “Bright Line Theory.”  This theory is  based on the view that donors will typically not make a contribution if they  believe their donations will simply be used to supplant government funds  or if their donations do not provide additional value.  The Foundation  considers projects that are systemwide and nonfederally funded to be  above the bright line and to have the greatest possibility of attracting  private support.  The Foundation usually identifies these projects in  consultation with Park Service headquarters officials.  Such projects  include the Park Service’s Junior Rangers Program, which seeks to provide  school children with knowledge about the benefits of national parks, and  the Parks as Classrooms Program, whereby teachers are encouraged to  supplement learning about nature by visiting local parks.  Because the  Foundation focuses on systemwide, nonfederally funded projects, it does  not typically attempt to secure private donations for certain individual park  priorities, which, Foundation officials believe, fall below the bright line and  would potentially be viewed by donors as a federal responsibility.
section_title: Corporations Contributed to Significant Rise in Private Support
paragraphs: For fiscal years 1999 through 2003, private contributions more than  doubled, from approximately $18 million in 1999 to just over $41 million in  2003.  Cumulative private contributions during this period were about $160  million, with the majority of these contributions coming from corporations.   Most corporate donations are targeted for a specific use (restricted).  The  Foundation is in the process of revising its current fund-raising approach in  an effort to increase its pool of discretionary donations.  The Foundation  hopes to satisfy more individual park needs with these discretionary  donations.
subsections: section_title: Corporations Are a Major Source for Private Donations
paragraphs: The Foundation has made a concerted effort to direct its fund-raising  efforts primarily at corporations.  Of the approximately $160 million that  the Foundation raised in private donations for fiscal years 1999 through  2003, $120 million, or 75 percent, came from corporations.  Individuals and  foundations accounted for the remaining $40 million, or 25 percent.  Figure  3 shows the percentage of donations, by source, for fiscal years 1999  through 2003.
In-kind contributions comprised about 52 percent of the corporate  contributions during this time.  As shown in figure 4, in-kind contributions  have increased, whereas cash contributions have decreased in fiscal years  2002 and 2003, due largely in part to the implementation of the  Foundation’s Proud Partners Program.
The Foundation’s fund-raising and grant-making processes consist of  several phases.  Fund-raising efforts typically begin with the Foundation’s  board members identifying corporate donors that could potentially provide  donations in support of the Park Service.  After identifying these corporate  donors, the Foundation researches their philanthropic interests, such as  demonstrated support for educational programs.  Next, the Foundation  contacts potential donors to explore the donors’ philanthropic interests  and to ascertain their willingness to make donations in support of the Park  Service.  If the donors are willing to contribute, the Foundation then  contacts Park Service headquarters officials with relevant subject matter  expertise to help identify potential systemwide projects that correspond  with the donors’ interests.  The Foundation then presents these projects to  the donors for their consideration.  The donors then may decide to make a  cash or in-kind contribution through the Foundation to support (1) one or  more of the proposed systemwide projects, (2) projects in a specific park,  or (3) general Park Service activities.  In instances where the donors decide  to support systemwide projects, the Foundation requests that all interested  parties submit grant proposals, indicating how they would use these  donations. The Foundation, in consultation with Park Service officials,  reviews the submitted proposals and selects recipients for the awards.  In  instances where the donors decide to support projects in a specific park,  the Foundation makes a grant to the selected park.  The Foundation may  use various means to distribute general donations to support park  activities.  Figure 5 illustrates the steps involved in the Foundation’s fund- raising and grant-making processes.  Appendix II provides additional  details on the grant-making process.
To better align its fund-raising with Park Service programs, the Foundation  is currently expanding its fund-raising approach and reviewing, with the  Park Service, the priority uses of the funds raised.  Under its expanded  approach, the Foundation and the Park Service have identified five  program areas—Volunteerism, Visitor Experience, Education, Community  Engagement, and Programs of National Significance—for which to target  donations.  Within each of these five program areas, the Foundation and  the Park Service have identified systemwide programs that donors can  support.  Moreover, these programs will be used as a basis for identifying  potential donors that have a history of supporting similar type programs.
subsections: section_title: Proud Partners of America Program
paragraphs: Corporate donors support the Foundation’s Proud Partners of America  Program, which was initiated in November 2000.  The Foundation names as  Proud Partners those corporations that have committed to multiyear  support to help raise awareness about national parks, promote interest and  support through sales of the National Park Pass, and encourage and  provide meaningful experiences for park visitors.  Currently, there are five  Proud Partners: American Airlines; Discovery Communications, Inc.; Ford  Motor Company; Eastman Kodak Company; and TIME magazine.  Each  Proud Partner is expected to pledge a minimum of $12 million over a 3-year  or longer period, and, according to Foundation officials, the Proud Partners  have committed an estimated $88 million to the parks.  The program was  limited to five corporations to allow close management of the program and  to minimize potential conflicts with donations tied to advertising at  individual parks.  A Foundation official stated that they have, however,  recently initiated discussions with the Park Service and the Foundation’s  Board of Directors about doubling the number of partnering corporations  to 10.
Under the Proud Partners Program, the Foundation receives both cash and  in-kind donations from corporations.  This support is centered on (1)  increasing public awareness of the breadth and depth of the parks, (2)  engaging the public in support of parks through purchase of the National  Park Pass and encouraging voluntary contributions, and (3) providing  grants to parks for pilot programs intended to help improve the visitor  experience.  Appendix IV provides more detailed information on the Proud  Partners Program and its related support.
section_title: Bulk of Donations to the Foundation Is Restricted for a Specific Use
paragraphs: The bulk of the private donations received by the Foundation is restricted  or targeted for specific uses.  For example, about $139 million, or 87  percent, of the $160 million in donations that the Foundation received for  fiscal years 1999 through 2003 were restricted.  Conversely, the Foundation  raised $21 million—the remaining 13 percent—in discretionary donations,  most of which were used to support systemwide programs.  Figure 6 shows  the amount of restricted and discretionary donations for fiscal years 1999  through 2003.
The Foundation is also developing procedures to secure more  discretionary funds from corporations and individuals.  With regard to  corporations, the Foundation plans to develop a pool of discretionary  donations within each of its five program areas.  Corporations can make  discretionary donations within these broad program areas that can then be  used to support individual park needs.  To increase discretionary donations  from individuals, the Foundation is exploring various means to better  target individual donors.  For example, the Foundation and the Park  Service are exploring the feasibility of allowing park visitors to volunteer  their contact information in order to follow up and ascertain how they can  support national parks.
section_title: Poor Communication and Documentation Affect Efforts to Assist the National Park Service
paragraphs: Poor communication and documentation problems as well as weaknesses  in management oversight hamper the Foundation’s partnering relationship  with the Park Service.  We identified three factors that contribute to the  problems that affect the Foundation’s efforts in assisting the Park Service:  (1) no written agreement exists between the Foundation and the Park  Service describing the Foundation’s fund-raising strategy and clarifying the  roles and responsibilities of each partner, (2) the lack of written  agreements on certain fund-raising and donation projects and the lack of  effective management procedures to ensure that documentation standards  are met, and (3) disagreement about the Foundation’s fund-raising and  donation strategy and the objectives of the Proud Partners Program.  The  Foundation and the Park Service have efforts under way to improve  communication and enhance the partnering relationship, but these efforts  have not addressed the need for written agreements.
subsections: section_title: The Foundation and the Park Service Lack Comprehensive Agreement Specifying Their Respective Partnering Roles and Responsibilities
paragraphs: The Foundation and the Park Service have not documented in a written  agreement the Foundation’s fund-raising and donation strategy, the roles  and responsibilities of the parties to implement the strategy, the approach  for accomplishing the strategy, or the specific guidelines and procedures  that should be followed to implement the strategy.  The lack of a written  agreement providing more specificity has created confusion about how the  Foundation performs its role of supporting the Park Service.  Foundation  officials informed us that they view the Foundation’s charter as the  overarching agreement between the Foundation and Park Service, and that  certain activities of the partners are further documented through standard  operating procedures as well as a memorandum of agreement.  While (1)  the Foundation’s legislative charter provides a basic framework for its  fund-raising efforts, (2) the memorandum of agreement addresses  advertising and promotional campaigns for Proud Partners, and (3) the  Foundation’s standard operating procedures provide direction with regard  to grant-making activity, there is no one comprehensive document that  clearly discusses the Foundation’s fund-raising strategy, work  requirements, and roles and responsibilities of the Foundation and the Park  Service in their partnering relationship.  The Park Service does, however,  enter into detailed written agreements with other nonprofit organizations  that include detailed descriptions of the fund-raising approach to be used  and the work to be performed by each partner.  Park Service headquarters  officials said that an agreement, similar to those it requires for other  nonprofits, would benefit the partnership with the Foundation and help to  minimize confusion on the partners’ roles and responsibilities.
section_title: The Foundation and Individual Parks Sometimes Enter into Verbal Fund- raising Agreements
paragraphs: The Foundation and individual parks sometimes rely on verbal agreements  in conducting fund-raising, leading to misunderstandings between the  Foundation and the Park Service officials regarding the roles and  responsibilities that each party is to perform, such as the specific fund- raising objectives and agreed-upon fund-raising actions.  Furthermore,  neither the Foundation nor the Park Service tracked fund-raising requests  or verbal agreements.  Thus, neither agency can measure whether  performance under these agreements met expectations.  We requested the  views of officials from all seven regional offices about their relationship  with the Foundation.  Deputy and associate regional directors confirmed  that some field staff are dissatisfied with the Foundation for not keeping its  fund-raising promises.  For example, some regional Park Service officials  told us that they had verbal fund-raising agreements with the Foundation,  and that the Foundation did not honor its commitments.  In one instance, a  Park Service regional official stated that the Foundation agreed to raise  $500,000 for a restoration of a historic site in Atlanta, Georgia.  The  Foundation denied it had made the commitment and attributed the  misunderstanding to erroneous information provided by a Park Service  headquarters official.  Similarly, a Park Service regional official stated that  the Foundation had verbally agreed to raise support for the region’s top  priority—construction of a Native American memorial at Little Bighorn  Battlefield National Monument.  In this case, Park Service regional and  Foundation officials collaborated on a work plan that identified these  priorities for Foundation assistance.  However, the support never  materialized.  According to the Foundation, it was unable to attract  sufficient private contributions to implement all of the early phases of its  campaign.
Without written fund-raising agreements and a system for tracking verbal  agreements, the Park Service and the Foundation cannot ensure proper  management oversight that is consistent with sound internal control and management practices.  Specifically, internal control standards specify  that all transactions and other significant events need to be clearly  documented, that the documentation should be readily available for  examination, and that all documentation and records should be properly  managed and maintained.  Other fund-raising efforts on behalf of the Park  Service must comply with Director’s Order 21—the Park Service’s guidance  on fund-raising and donations—and be authorized in a written agreement.   Under Director’s Order 21, fund-raising agreements should include the (1)  project or programs to be funded and the priority order of funding; (2)  procedures under which the fund-raising will be conducted, including  adherence to Park Service policies; and (3) procedure for Park Service  review and approval of planning, design, and construction when  appropriate.  An official from Interior’s Office of the Solicitor told us that  this order does not apply to the Foundation given its unique status as a  congressionally chartered fund-raiser.  Although Foundation officials  stated that they comply with the order on a voluntary basis, and that their  procedures require written agreements for fund-raising involving specific  park projects, we found that there were no written agreements.   Foundation officials stated that this is a recent policy and that they have  not entered into any local park agreements since this policy was adopted.   In any event, the Park Service and the Foundation could improve their  internal control procedures by entering into written fund-raising  agreements.  Doing so would provide a means for the Park Service and the  Foundation to improve their management oversight of fund-raising  activities.
section_title: Some Park Service Officials Disagree with the Foundation’s Fund-raising Strategy and Key Aspects of the Proud Partners Program
paragraphs: There is also disagreement within the Park Service about the effectiveness  of the Foundation’s fund-raising strategy for raising funds to support Park  Service programs.  Some Park Service headquarters officials agree with the  Foundation’s fund-raising strategy and the Secretary of the Interior and the  Director of the National Park Service serve on the Foundation’s Board of  Directors, which approves all fund-raising activities of the Foundation.   However, some regional Park Service officials, while appreciative of the  Foundation’s support, disagree with the Foundation on its fund-raising  strategy and objectives of the Proud Partners Program.  With regard to the  fund-raising strategy, these officials told us that the Foundation’s strategy  should be targeted at the priority needs of individual parks.  For example,  several regional officials commented that the Foundation’s unfamiliarity  with park needs resulted in missed opportunities to solicit contributions  for important park projects.  In addition, these officials suggested that the  Park Service periodically provide its list of individual park priorities to the  Foundation for fund-raising consideration.  Although the current park  priority listing focuses on projects eligible for funding from over 80 federal  sources, the officials believe the list could be modified to include projects  for which nonprofit funding is needed and appropriate.  Foundation  officials believe that individual park priorities can be better addressed by  local nonprofit organizations.  Foundation officials acknowledge that, in  some cases, donors are interested in supporting a park priority need that  could be viewed as a federal responsibility.  For example, one corporation  agreed to raise $5 million to support the restoration of the Washington  Monument in Washington, D.C.—a project that was on the Park Service’s  priority list in anticipation of future federal funding.
Some regional officials stated that some support provided through the  Proud Partners Program was unrelated to park needs.  For example, one  company donated 500 electric vehicles, valued at about $4.2 million, to  national and state parks in California, and, according to one Park official,  the actual funds would have better met park needs.  Park Service  headquarters’ officials recognize that much of the Foundation’s corporate  revenues are restricted and heavily tied to promotional or advertising  objectives, but they believe these contributions have nevertheless provided  valuable assistance.
In addition, the Park Service and the Foundation appear to have differing  viewpoints with respect to one of the three objectives of the Proud  Partners Program.  In a May 2001 memorandum sent to the Park Service’s  Leadership Council, the Acting Park Service Director communicated to the  service’s regions and local park superintendents that the objectives of the  Foundation’s Proud Partner Program includes providing “direct support for  National Park Service priorities.”  According to Foundation officials, the  objectives of the Proud Partner Program were designed to support  systemwide Park Service programs, not individual park priorities.  The  Foundation’s published objectives for the Proud Partner Program are to  provide servicewide benefits to the park system by (1) raising awareness  about the breadth and depth of national parks, (2) generating individual  interest and support for parks through sales of the National Parks Pass and  encouraging contributions, and (3) piloting visitor experience grant  programs to help the Park Service address the challenges of encouraging  and providing meaningful park experiences while preserving park  resources.  In practice, however, the Foundation policy has not always  been followed.  For example, the Director of the Park Service and the Park  Service’s Associate Director for Partnerships, Interpretation and  Education, Volunteers, and Outdoor Recreation, recently stated that the  Proud Partners Program has supported some local park projects, such as  the restoration of the historic fleet of red buses at Glacier National Park at  a cost of about $8 million.  Such inconsistencies in communication and  practice have led to misunderstandings about the kinds of projects the  program will support.
Lastly, Foundation and Park Service officials have different views about the  exclusivity terms in the Proud Partner agreements.  A memorandum of  agreement between the Foundation and the Park Service, originally signed  in 1994, established policies and guidelines that should be followed in  managing commercial advertising and promotional campaigns, such as the  Proud Partner Program.  Although predating the Proud Partner Program by  6 years, this agreement, along with an earlier internal Park Service  memorandum, establishes the Foundation’s responsibility for managing  national, cause-related marketing campaigns.  The 1994 agreement also  stipulates that all promotional and advertising arrangements will be  consistent with Park Service policies and provides for Park Service review  of promotional material before their public distribution.  Additionally, the  agreement authorizes the Foundation to sign letters of agreement with  corporate partners and to provide product or service category exclusivity.
The issue in question is whether these exclusivity arrangements preclude  other nonprofits from making park-based marketing agreements with  businesses that promote products or services that fall within the Proud  Partners’ categorical areas of operation.  Foundation officials advised us  that the terms of their agreements with corporate partners do not prevent  other Park Service nonprofit partners from negotiating park-based  marketing agreements with businesses that provide the same type of  product or services as the Foundation’s five national partners.  However,  the Interior’s Office of the Solicitor officials, along with nonprofit officials  with whom we spoke, believe that such park-based agreements are  generally prohibited.  Under this interpretation, a local friends group at any  national park, for example, generally could not negotiate a park-based  automotive-related marketing agreement with the Toyota Corporation  because the Ford Motor Company is a Proud Partner and has exclusive  marketing rights within the automotive product category.  Because the  Foundation has provided nondisclosure guarantees to its Proud Partners, it  does not make the actual terms within the specific agreements between the  Foundation and the Proud Partners available for Park Service review (see  app. IV for more details).
section_title: The Foundation and the Park Service Have Efforts Under Way to Improve Collaboration and Communication
paragraphs: Both the Park Service and the Foundation have several ongoing efforts,  which when fully implemented should help address recognized  communication problems between their organizations.  In April 2003, the  Park Service and the Foundation jointly created the Partnership Committee  to take actions to, among other things, ensure common, consistent, open,  and timely communication between the two entities.  This committee,  comprised of Park Service headquarters officials and regional directors and  Foundation board members and staff, also focuses on achieving shared  goals and recommending actions to resolve differences between the two  organizations.  In addition, the Director of the Park Service and Foundation  officials recently agreed to meet monthly to find ways to promote better  communication.  Although this committee has been formed, it has yet to  develop any action plans to address specific communication issues that it  has identified.
The Foundation and the Park Service are also taking independent actions  to improve communication.  For example, the Foundation is providing  quarterly reports to the Park Service’s National Leadership Council that  provide updated information on the Foundation’s grants, Proud Partners  Program, funding, and partnership highlights.  The reports are then  distributed to all park superintendents, program managers, and other staff  in the Park Service.  The Foundation also plans to provide briefings to Park  Service regional staff that discuss and clarify the Foundation’s roles and  responsibilities and fund-raising policies.  Similarly, the Park Service  established the NPS Partnership Council in 2002 that facilitates open  communication and dialogue among the Park Service’s field, regions, and  directorate; the National Park Foundation; and other nonprofit partners.   The council consists of 24 members, including Park Service headquarters  officials, regional directors, and field representatives (preferably at the  superintendent level) and a Foundation representative.  In addition, Park  Service officials said that they were considering a proposal for a general  agreement between the organizations to clarify the roles and  responsibilities of the Foundation and the Park Service in their partnering  relationship.
Although the Foundation and the Park Service have taken positive steps to  improve communication, these actions are recent and have not been fully  implemented.  For example, although the Foundation has recognized the  need to provide briefings to Park Service regional officials, the briefings  have not been provided to date.
section_title: Conclusions
paragraphs: Although the Foundation’s support has contributed to the betterment of the  Park System, poor communication between the Foundation and the Park  Service has caused confusion regarding how each of the parties is  operating in the partnership.  Much of this confusion stems from the lack of  a written agreement that clearly describes the Foundation’s fund-raising  strategy and clarifies the roles and responsibilities of the Foundation and  the Park Service in its partnering relationship.  Until roles and  responsibilities are better defined and policies and procedures are outlined  to implement fund-raising efforts, confusion and uncertainty may result  and fund-raising opportunities may be overlooked.
The Foundation’s approach to fund-raising for systemwide programs has  led some Park Service officials to contend that the Foundation’s support is  not being focused where it could do the most good—to better support  individual higher priority projects at local parks.  Although the Foundation  is attempting to increase its discretionary funds that could be used for  individual park priorities, the Foundation could also benefit from a list of  individual park priorities, which the Park Service has not yet provided.
Some Park Service officials are concerned that the Foundation has not  fulfilled its commitments to provide fund-raising support.  Without written  fund-raising agreements, neither the Foundation nor the Park Service can  demonstrate that they met fund-raising commitments and that the  agreements were carried out.
The Foundation and the Park Service are embarking on several initiatives  to remedy some of these problems, such as providing formal briefings to  Park Service regional officials on the Foundation’s roles and  responsibilities.  Moreover, the Park Service is currently considering the  development of an overall written agreement with the Foundation that  clearly articulates each party’s roles and responsibilities in the partnering  relationship.  While these are steps in the right direction, many of these  initiatives are still in the initial planning phase.  However, the proper  implementation of these steps should help resolve the communication  problems that exist between the Foundation and the Park Service and  strengthen their partnership.
section_title: Recommendations for Executive Action
paragraphs: To reduce the confusion and misunderstanding and improve  communication between the National Park Foundation and the Park  Service, we are recommending that the Secretary of the Interior require the  Director of the National Park Service to take the following five steps:  work collaboratively with the Foundation to develop an overall written  agreement that, among other things, articulates the Foundation’s fund- raising strategy and clarifies the roles and responsibilities of the  Foundation and the Park Service in their partnering relationship;  identify and document all current and future fund-raising agreements  made with the Foundation, specifying the terms of work agreed to by  each party;  provide a list of individual park project priorities, including those  potentially fundable by nonprofits, and communicate them to the  Foundation for consideration in fund-raising;   develop and implement internal controls such that fund-raising  agreements are documented in writing and subsequent performance is  tracked against the agreement; and  clarify whether the exclusivity terms in Foundation agreements with  Proud Partners apply to park-based cause-related marketing  arrangements and communicate this information to all of the Park  Service’s fund-raising partners.
section_title: Recommendations to the National Park Foundation
paragraphs: To improve its communication with the Park Service and improve  management controls, we are making four recommendations to the  National Park Foundation, namely that it take the following four steps:  enter into an overall written agreement with the Park Service that  includes its fund-raising strategy and clarifies the roles and  responsibilities of the Foundation and the Park Service in their  partnering relationship;  identify and document all current and future fund-raising agreements  made with the Park Service, specifying the terms of work agreed to by  each party;  develop a process, either through training or briefings, to help ensure  complete and consistent understanding of its fund-raising strategy and  roles and responsibilities with the Park Service headquarters, regional,  and local park officials; and  in developing its fund-raising approach, consider the list of individual  park priorities compiled and provided by the Park Service—this list  could be used for identifying patterns of park needs for systemwide  projects as well as for identifying specific needs that may be of interest  to potential donors.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the National Park Service and the  National Park Foundation for review and comment.  Both provided written  comments.  The Park Service agreed with the five recommendations we  made to the Secretary of the Interior.  The Foundation agreed with three of  the four recommendations that were directed to it and stated that it is  committed to working with the Park Service to ensure the implementation  of these recommendations.  While the Foundation agreed that close  coordination with the Park Service is important, it disagreed with our  recommendation calling for the development of a comprehensive written  agreement that clarifies the respective roles and responsibilities of the two  parties.  The Foundation stated that such a written agreement is  unnecessary because cooperation is already adequately ensured by its  chartering legislation and the positions held by the Secretary of the Interior  and the Director of the Park Service, who serve as chairperson and  secretary, respectively, on the Foundation’s Board of Directors.  Moreover,  the Foundation cited that the powers of the board’s chairperson to appoint  all board members as an effective means of ensuring cooperation.  Finally,  the Foundation stated that its recent efforts to consult extensively with the  Park Service regarding fund-raising and grant-making, as well as its efforts  to create standard operating procedures, underscores the Foundation’s  commitment to furthering cooperation between the two entities.
We agree that the Foundation’s charter and the positions held by the  Secretary of the Interior and the Director of the Park Service on the  Foundation’s board are important elements of coordination between the  Foundation and the Park Service.  This arrangement is an important part of  the Foundation’s governance structure.  Because neither the Secretary of  the Interior, nor the Director of the Park Service, nor the appointed board  members are responsible for, or involved with, daily operational  relationships, additional safeguards are needed at the operational levels to  help ensure effective communication and working relationships.  Although  board policies and guidance can facilitate effective communication and  working relationships, it is the Foundation’s managers and staff that are  responsible for the implementation of such policies and guidance.  As our  report indicates, implementation can be improved.  We continue to believe  that a comprehensive written agreement between the Foundation and the  Park Service would further enhance communication, working  relationships, and management controls at all levels of the partnership.  In  commenting on the draft report, the Park Service also stated that such an  agreement would enhance the communication between it and the  Foundation.
The Park Service comments are contained in appendix VI, and the  Foundation comments are provided in appendix VII.
As arranged with your offices, unless you publicly announce the contents  of this report earlier, we will plan no further distribution of this report until  30 days after the date of this letter.  At that time, we will send copies of this  report to other interested congressional committees, the Secretary of the  Interior, and the National Park Foundation.  We will make copies available  to others upon request.  In addition, the report will be available at no  charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions, please contact me at (202) 512-3841  or hillbt@gao.gov.  Key contributors to this report are listed in appendix  VIII.
section_title: Scope and Methodology
paragraphs: We examined the partnership relationship between the National Park  Foundation (Foundation) and the National Park Service (Park Service),  focusing primarily on the Foundation’s efforts to provide assistance to the  Park Service in accordance with its stated charter.
To identify the Foundation’s roles and responsibilities, we gathered and  reviewed several documents.  We reviewed the Foundation’s legislative  charter, and its amendments, to identify the purpose for which the charter  was established and what functions it is responsible for performing.  We  discussed the basis and application of the authorities with Foundation and  Park Service officials to understand how the Foundation should perform its  fund-raising to support the Park Service.  We also reviewed the  Foundation’s bylaws and the policies and procedures that govern its fund- raising and donation strategies and operations, and we discussed their  application with Foundation officials.  We reviewed Park Service rules,  regulations, and guidance, specifically director’s orders governing fund- raising and donation activities and agreements.  We discussed the  application of these rules, regulations, and guidance with the appropriate  Park Service and Foundation officials to gain an understanding of how they  are to be applied to the Foundation’s roles and responsibilities.  In addition,  we reviewed the Foundation’s strategic plans and 41 existing cooperative  agreements between the Foundation and the Park Service or other federal  agencies to ascertain the roles and responsibilities contained therein.
We examined Foundation financial and management reports to determine  the amount and kinds of donations that the Foundation has raised on  behalf of the Park Service.  Specifically, we collected, reviewed, and  analyzed the Foundation’s audited financial statements for fiscal years 1999  through 2003 to identify the revenues and expenses of the Foundation.   From these statements, we identified the sources and amounts of  contributions made.  We discussed with Foundation officials their fund- raising and grant-making processes and activities, including the Proud  Partners of America Program.  The Foundation provided us with data  describing how the Proud Partners and other grants were allocated within  the Park Service.  In assessing the reliability of these data through (1)  interviews with knowledgeable officials and (2) reviews of existing  information, we found problems with the accuracy and completeness of  these data.  Nevertheless, we determined that the reliability of these data  was adequate to describe the grants within the Park Service.  We performed  an analysis of this information to determine the (1) sources of donations,  such as corporations, individuals, or other foundations; (2) amounts  received from these sources; (3) types of contributions, for example, cash  versus noncash (in-kind); and (4) amounts of contributions that were for  discretionary use or dedicated for a specific purpose (restricted).  We also  developed a list of cooperative agreements using data provided  independently by the Foundation and the Park Service.  We assessed the  completeness of this information by comparing the documentation  provided by the two organizations.  We collected the source documents for  all of the cooperative agreements to ensure the accuracy of the  information.
To determine the extent that contributions assisted the Park Service in  addressing park priorities, we reviewed the Foundation’s grant awards and  available discretionary funds and interviewed Foundation officials about  how these funds are raised and used to fulfill individual park requests.  We  discussed with current and former Park Service officials the support  provided by the Foundation.  These individuals included officials at Park  Service headquarters, regional offices, and some individual park units.  We  discussed with these officials their views regarding the usefulness of the  support provided by the Foundation, such as how the support addressed  local park priorities.  We did not attempt to track each park’s receipt and  use of contributions due to the time that would be required to review such  data.  We also reviewed internal control documentation standards to  ascertain whether the agreements between the Park Service and the  Foundation met those standards.  Finally, we analyzed the Foundation’s  financial statements for fiscal years 1999 through 2003, which received an  unqualified opinion by independent auditing firms.
We conducted our work from August 2003 to May 2004 in accordance with  generally accepted government auditing standards.
section_title: Grants to National Parks as Reported in the National Park Foundation’s GIFTS Database
paragraphs: The Foundation uses its GIFTS database to, among other things, monitor  the number of grants awarded to national parks.  The information  contained in this appendix is based on a query of this database.  According  to Foundation officials, GIFTS is a newly installed database and does not  contain all of the grant information for fiscal years 2000 through 2003.  We  performed several tests of the database and found that the data were  indeed incomplete.  For example, although GIFTS includes some  information on grants awarded to Glacier National Park for the renovation  of its red bus fleet, the database does not contain all grants awarded for  this project.  Though we found that the data in the GIFTS system were  incomplete in our reliability assessment, we present the data in this  appendix as background information on grants awarded to national parks.   Consequently, information pertaining to grant award amounts and  allocations may be underreported.
According to the GIFTS database, for fiscal years 2000 through 2003, the  Foundation awarded 768 grants totaling approximately $58 million to  support the Park Service.  Of this, 610 grants for $32 million went to 210  national parks.  In addition, Park Service offices received 88 grants  totaling $22 million.  The remaining 70 grants went to such entities as  foundations, societies, and local friends groups for activities in support of  the Park Service.  Grants included both monetary and nonmonetary (in- kind) contributions, such as photoimaging equipment and electric vehicles.
The Foundation typically awards grants through a competitive process.   Grant applicants must submit proposals for specific funds indicating,  among other things, how they plan to use the grant.  A selection committee,  comprised of Foundation and Park Service officials, reviews all proposals  and makes a selection.  The committee then presents its selection to the  Foundation Board of Directors for approval.  To be approved, (1) grant  proposals must have gone through the standard review process or be for a  grant that a donor has directed for a specific purpose; (2) grant proposals  must fall within one of the Foundation’s four program areas—Visitor  Experience, Volunteerism, Education, or Community Engagement—or fill a  pressing need for the Park Service under the category of Programs of  National Significance; and (3) funds must be available.  A grant agreement  is then forwarded to the recipient for signature, and once it is received by  the Foundation, a disbursement is made.  The Foundation tracks the grants  throughout the process using its GIFTS database.  Figure 7 shows the total  grant dollars awarded for fiscal years 2000 through 2003 as reported in the  Foundation’s GIFTS database and audited financial statements.
The GIFTS database shows that the number of grants awarded by the  Foundation significantly increased in recent years.  Foundation grant  awards doubled from fiscal years 2000 through 2003, from about 120 grant  awards to just over 265 grant awards, as shown in figure 8.
For fiscal years 2000 through 2003, the Foundation provided grants to 210  national parks.  On the basis of the grants included in the GIFTS data, the  top 3 national parks receiving grant assistance during this time were  Edison National Historic Site, Glacier National Park, and Yellowstone  National Park.  These 3 national parks combined received about $13  million, or 22 percent, of the total grant dollars awarded during this time.   Edison National Historic Site received the largest grant awarded— approximately $5 million for building restoration.  Table 1 provides  selected national park grant recipients for fiscal years 2000 through 2003.
section_title: Cooperative Agreements and the National Park Pass Contract
paragraphs: Since fiscal year 1997, the Foundation has entered into 41 cooperative  agreements with federal agencies that total over $3.1 million. Of these 41  agreements, 37 are with the Park Service, and 4 are with the Bureau of  Land Management and the U.S. Fish and Wildlife Service, respectively, to  support joint programs between those agencies and the Foundation.  Each  agreement establishes the responsibilities of the Foundation and its federal  partner, specifying the product or service the Foundation must provide as  well as the funding the federal partner must provide.  These agreements  between the Foundation and federal agencies have often been modified  and extended.  Table 2 provides a detailed list of the Foundation  agreements with the Park Service and other Department of the Interior  agencies.
Not all of the 37 agreements that the Foundation has with the Park Service  have been completed.  Park Service contracting officers who are  responsible for monitoring these agreements reported that, for those  completed, the Foundation successfully met agreement terms.  The  Foundation also has a contract with the Park Service to administer the  National Park Pass Program.  This program allows park visitors to  purchase a pass, good for 1 year, that allows for admission to parks with  entry fees.  Current contract terms allow for cost reimbursement for  administration, limited to 15 percent of the National Park Pass revenue.  In  October 2003, the Park Service contract officer expressed concern with the  Foundation’s reimbursement request because it exceeded the program  budget by over $300,000.  Upon review, the contracting officer agreed that  most of these costs were appropriate, disallowing about $33,000.
In March 2004, the Foundation and the Park Service signed a general  agreement that lays out policies related to cooperative agreements.  Among  other things, the agreement lists the prerequisites for entering into  cooperative agreements.  Specifically, these criteria are that the activity  covered by the agreement (1) is of a type that is consistent with the mission  of the Park Service, (2) is not normally undertaken through a procurement  contract, (3) requires the Park Service and the Foundation to be active  participants, and (4) is consistent with congressional mandates for both the  Park Service and the Foundation.  In addition, the agreement details  various procedural requirements.  Table 2 provides the name of the  agreement and information on the original and modifications to it, the  product or service to be delivered, and the awarded funding amount for  each agreement from fiscal years 1997 through 2003.
section_title: Proud Partners of America Program Contributions and Pledges as Reported by the National Park Foundation
paragraphs: The Foundation representatives provided us with data estimating the value  of Proud Partners’ contributions that directly benefited national park units.   Subsequently, Foundation officials stated these data were not reviewed by  management and were inaccurate.  They provided new data that made  significant changes, including how systemwide and park-specific support  was allocated.  In assessing the reliability of these data through  interviewing knowledgeable officials, we found problems with accuracy.   For example, the Foundation had listed about $10 million as a park-specific  contribution to Glacier National Park.  In reviewing the supporting material  for that contribution, we determined that about $2 million of the $10  million was a systemwide contribution.  As a result, these data should be  viewed as background information on contributions and pledges made  under the Proud Partners of America Program.
Under the Proud Partners Program, five large corporations and the  Foundation develop a marketing campaign that provides mutual  promotional benefits to the Park Service and the corporation.  Since the  program’s inception in November 2000, the Foundation estimates that  partners have provided or committed $93 million to the parks.  Foundation  data show that about $62 million has been received and used primarily for  systemwide ($38 million) and park-specific support ($13 million).   Included in these data, as systemwide support, is over $6 million of in-kind  contributions for on-air programming featuring individual national parks.   For example, Discovery Communications, Inc., donated programming for  films on Glacier National Park valued at $630,000, Grand Canyon National  Park valued at $1.7 million, and Yellowstone National Park valued at  $1,365,000.  Foundation officials stated that these films were part of a  broader effort to raise awareness about all national parks and were  considered systemwide, rather than park-specific support.  Proud Partner  park-specific support has directly benefited about 190 parks, with Glacier  National Park being the primary recipient because of the Ford Motor  Company’s red bus renovation initiative.
In addition to providing systemwide and park-specific support, nearly $3  million of the Proud Partner funds supported entities outside of the Park  Service, such as other federal and state organizations and nonprofits.  For  example, Ford’s donation of 500 electric vehicles included 225 vehicles,  valued at about $1.8 million, which benefited non-Park Service  operations—mostly California state parks.  Also, Eastern National, a Park  Service cooperating association, received a professional digital camera  donation from the Eastman Kodak Company valued at $3,000, and the  National Park of American Samoa received photoimaging equipment from  Kodak valued at $2,000.  The Foundation reports that administrative and  fund-raising costs associated with the Proud Partners Program have totaled  about $7 million.
The Proud Partner Program is based on the view that large corporate  sponsors seek to invest in the positive image, exposure, visibility, and  public acceptance that are associated with the national parks.  Recognizing  this, Foundation staff attempt to customize a promotional program for  each partner that meets corporate marketing, philanthropic, and public  affairs objectives and that is consistent with the Foundation’s principal  program objectives for benefiting the park system.
The Foundation’s Board of Directors plays a key role in developing  corporate partnerships.  Usually, board members identify prospective  partners.  They also may contact the corporation directly or facilitate  contacts by Foundation staff.  Before meeting with a prospective partner,  Foundation staff perform research to identify the corporation’s  philanthropic and promotional interests.  Also, informal discussions may  occur among the board, Foundation staff, and the Park Service to ensure  that the corporation’s values are in-line with those of the Park Service and  the Foundation.
As the process continues, Foundation representatives make a customized  presentation to the potential partner.  The presentation uses information  gleaned from staff research, such as the corporation’s philanthropic  interests, and identifies partnering contribution requirements as well as  broad program benefits that corporations might expect.  For example, if a  corporation has a philanthropic interest in education, Foundation  representatives would note educational opportunities and needs associated  with the national parks.  Among the broad benefits, the representatives  note that by aligning their corporate image with the popularity of the  national parks, corporate sponsors can demonstrate excellent corporate  citizenship, increase sales, heighten brand awareness, and target specific  markets and consumer demographics.  Information on specific program  benefits may also be provided during the presentations.  Foundation staff  point out, for example, that Proud Partners receive the following:  exposure through Proud Partner advertising and promotional literature,  outreach to park visitors,  exclusive advertising and promotional rights,  unique hospitality opportunities, and   the use of a highly visible Foundation Web site.
As with other Foundation programs and grants, Proud Partners Program  initiatives and grants are reviewed and approved by a board committee and  require board approval.  Grants are expected to align with program  objectives identified during a planning process that entails considerable  Park Service input.  Also, the distribution of partner donations, via grant  awards, works much the same as with other Foundation grants,  implementing a standard request for proposals process to direct partner  support to the parks.  At times, a representative of the Proud Partners  participates in the review of grant applications.
The Foundation provided us with data describing how the Proud Partners’  contributions were allocated within the Park Service.  In examining data  provided by the Foundation, we found that it was not clear how these  contributions were allocated systemwide versus to specific parks.  For  example, the Foundation categorized a contribution for filmmaking at  Glacier Park as systemwide because it viewed the film as benefiting the  whole national park system.  We also performed tests to determine the  completeness and accuracy of these data and found problems.  Due to time  constraints, we did not assess the complete reliability of the Proud  Partners data.  Thus, we present these data in this appendix as background  information on contributions and pledges made under the Proud Partners  Program.
Table 3 identifies the Proud Partners, the category of product or services  they provide, and the term of their agreement with the Foundation.  It also  shows each partner’s reported total contributions as of June 30, 2003, and  estimated contributions over the program’s life.  Contributions as of June  2003 do not include $7 million in administrative support contributed by the  Proud Partners.
Proud Partners’ support is commonly directed at promoting visitor interest  in the parks.  However, the support initiatives designed to accomplish this  differ markedly from partner to partner.  Moreover, while most initiatives  are intended to support servicewide benefits, considerable Proud Partner  support has benefited individual parks.
TIME magazine, for example, focuses on raising awareness of parks  through special magazine features and advertising in its magazine, as does  Discovery Communications, Inc., through public service advertisements  and television programming.  American Airlines supports the objective of  generating interest and support for the parks through sales of the Park Pass  and encouraging contributions.  The airline’s support initiatives include  offering frequent flyers extra miles for contributions and providing funding  for migratory bird conservation and education projects within national  parks.  Kodak also promotes Park Pass sales and enhancing visitor  experiences.  Kodak initiatives include supporting an annual national park  photo contest and a national park “photo quilt” on its Web site.  Table 4  shows the major Proud Partner initiatives and their estimated value.
The Proud Partner agreements provide considerable support to the Park  Service, but the Park Service does not review the agreement and is not a  signatory.  The Foundation advised us that Proud Partner agreements  provided corporate partners with nondisclosure assurances, and that the  agreements are kept confidential because of proprietary information  contained therein.  Instead, the Foundation makes agreements with  corporations and then provides the Park Service with information  describing the terms of their partnering agreement.  The Foundation also  provides advertisements and other promotional materials intended to be  used for the Proud Partners Program to the Park Service for its review  before distribution.  The Foundation did not provide agreements to us for  our review, but they did provide us with a standard contract template that,  according to Foundation officials, is included in each agreement.  Although  the template does not address financial arrangements or specifically refer  to Park Service policies or guidelines, it appears to promote conformity  with the Park Service’s advertising and promotional policies.
When the Proud Partners Program was first announced, several Park  Service regional directors requested additional information on how the  program related to park fund-raising efforts.  Park Service and local  nonprofit officials also voiced concern about categorical exclusions  limiting fund-raising opportunities by other partners without Park Service  review of the partner agreements.  To date, neither the Foundation nor the  Park Service has conducted a formal assessment of the extent to which  exclusivity terms that are part of the Proud Partners’ agreements affect  local nonprofits.  Table 5 provides a detailed list of national parks that have  received direct program contributions.  The table also contains an  unverified estimate, provided by the Foundation, of the value of those  contributions ($13 million).
section_title: Foundation Compensation
paragraphs: The Foundation’s Board of Directors establishes compensation for the  chief executive officer (CEO) on the basis of comparisons with persons in  similar positions in big foundations and major nonprofits.  The CEO, within  the established Foundation budget, sets compensation for the Foundation’s  staff.  In 2003, the Foundation’s CEO received compensation of $311,000  (excluding fringe benefits).  This amount included the following:  $51,000—retirement contributions and deferred compensation   In fiscal 2002, compensation (excluding fringe benefits) for other senior  management staff was as follows:  $132,471—senior vice president, marketing and communications  $120,743—vice president, field development  $87,419—senior director, finance The salaries of executive directors of the Foundation’s affiliated groups in  fiscal year 2002 ranged from $84,000 at Outside Las Vegas to $40,000 at the  Glacier Fund.
Generally, reasonable compensation is defined as an amount that similar  persons in similar positions with similar duties at similar organizations are  paid.  Although there are no hard-and-fast rules for setting compensation,  the Internal Revenue Service applies three conditions when evaluating the  reasonableness of executive compensation set by foundations and  nonprofits: (1) approval by a board of directors that does not have a  conflict of interest with respect to the compensation arrangement, (2)  reliance on comparable data such as compensation surveys, and (3)  adequately document the basis for the determination concurrently with  making the determination.  The Foundation has not made its salary  information publicly available.  The Foundation is exempt from all taxes,  and the Internal Revenue Service has issued an opinion that the Foundation  need not file a tax-exempt report.  The Foundation recently decided that it  would file a tax report for fiscal year 2003.
In setting its CEO’s compensation, the Foundation’s Executive Committee  relied on a compensation survey published in the Chronicle of  Philanthropy that captured CEO compensation (mainly salary) and total  assets managed by the organizations.  Although the Foundation’s total  assets were about $89 million in fiscal year 2003 (revenue was $52 million  and program contributions were about $43 million), Foundation officials  decided that compensation data from the survey’s list of “Big Foundations”  and “Major Nonprofit Organizations” ($500 million to $1 billion  organizations) were most applicable to the Foundation.  Foundation  officials explained that the Foundation provides benefits (including direct  grants) of $50 million a year, and that grant-making foundations with $500  million in assets would ordinarily make grants of 5 percent of that amount,  or $25 million.  On the basis of its comparison with big foundations and  major nonprofit organizations, the Foundation’s Executive Board  concluded that its CEO compensation was within the correct range.
Table 6 compares CEO compensation among the Foundation and nine  nonrandomly selected nonprofit organizations, as recorded on their tax  reports.  Six of the nine organizations we included had greater revenues  and assets than the Foundation; of these six, four compensation packages  were below the Foundation CEO’s compensation.  Two of the nine  organizations had revenue and assets that were below the Foundation’s;  both had compensation that was below the Foundation CEO’s.  One  organization had lower revenues but higher assets.  The CEO’s  compensation for this nonprofit was below that of the Foundation’s CEO.   According to the Congressional Budget Office, the median salary for chief  executives at nonprofits with annual budgets of $25 million or more was  about $176,800 in 2002.  We focused on CEO compensation because,  although other employees are hired and can resign or be terminated  relatively freely, CEOs are generally hired on a contractual basis and the  terms of their employment can vary considerably.  In addition, CEO  compensation, including CEO nonprofit compensation, has been the  subject of considerable scrutiny and criticism in recent years.
section_title: Comments from the National Park Service
section_title: Comments from the National Park Foundation
paragraphs: The following are GAO’s comments on the National Park Foundation’s  letter dated April 22, 2004.
subsections: section_title: GAO Comments
paragraphs: 1. We agree that the Foundation’s charter and the positions held by the  Secretary of the Interior and the Director of the Park Service on the  Foundation’s board are important elements of coordination between  the Foundation and the Park Service.  This arrangement is an important  part of the Foundation’s governance structure.  Because neither the  Secretary of the Interior, nor the Director of the Park Service, nor the  appointed board members are responsible for, or involved with, daily  operational relationships, additional safeguards are needed at the  operational levels to help ensure effective communication and working  relationships.  Although board policies and guidance can facilitate  effective communication and working relationships, it is the  Foundation’s managers and staff that are responsible for ensuring the  actual implementation of such policies and guidance.  As our report  indicates, implementation can be improved.  We continue to believe  that a comprehensive written agreement between the Foundation and  the Park Service would further enhance communication, working  relationships, and management controls at all levels of their  partnership.  Furthermore, as evidenced by the Park Service’s  comments, it also agrees that such an agreement is needed to help  improve communications between it and the Foundation. 2. Although we recognize the influences that donors have in directing  support provided through the Foundation (see pp. 9 and 38 of the  report), we believe that the Foundation’s comments are overall  inconsistent with its literature, our prior conversations with its  officials, the views of some Park Service regional officials, and our  review of Proud Partner Program grants.  As stated on page 19 of the  report, and supported by discussions with Foundation officials, the  literature of the Foundation does not mention providing direct support  for National Park Service priorities as an objective of the Proud  Partners Program.  Moreover, as noted on page 18, this interpretation is  inconsistent with views held by several park regional officials who  believed that the program should be targeted at securing support for  individual park priorities as opposed to systemwide needs.  Finally, this  interpretation appears incongruent with some grants that have been  issued under the Proud Partner Program.  As noted on page 19 of the  report, our review found that some Proud Partner grants, such as those  used to restore the red bus fleet at Glacier National Park, principally  appear to support local, rather than systemwide, Park Service  priorities. 3. The Foundation takes issue with our mentioning the Glacier red bus  renovation as an example of an inconsistency in application of its  program strategy.  Although we agree that several cited transportation  initiatives provided systemwide benefits, most of these initiatives’  support did not provide systemwide benefits.  For example, of about  500 electric vehicles donated during the period we examined, 225 went  primarily to California state parks (parks not affiliated with the  National Park Service).  Additionally, virtually all of the 275 electric  vehicles donated to Park Service units were directed to park units only  in California.  Further, the National Park Service Director as well as the  Park Service’s Associate Director for Partnerships, Interpretation and  Education, Volunteers, and Outdoor Recreation referred to the Glacier  bus restoration as supporting a local park project (see p. 19). 4. We do not agree with the Foundation’s position that potential conflicts  only arise under circumstances where a park-based project involves a  national marketing component.  Director’s Order 21 states that when  the Foundation has a national cause-related marketing arrangement,  this may take precedence over a park-based cause-related marketing  effort in the same business category.  The order does not specify that  the precedence applies only when the park-based project has a  national marketing component as interpreted by the Foundation.   Further, as reported on page 20, Interior’s Office of the Solicitor  officials, along with nonprofit officials with whom we spoke, believe  that park-based agreements, in the same business category as a Proud  Partner, were generally prohibited.  Thus, we continue to believe (1)  that there is general confusion in the Park Service, especially in the  field locations, regarding the applicability of the Proud Partner  exclusivity terms to park-based cause-related marketing arrangements  and (2) that the Foundation should help further clarify this issue. 5. Although there is evidence that the Foundation has contributed funding  toward renovation of the Ebenezer Baptist Church (a facility within the  Martin Luther King, Jr., National Historic Site) and did complete a  feasibility study for the Native American monument at the Little  Bighorn National Monument, the exact terms and conditions for these  two fund-raising efforts is speculative because there was no written  agreement.  Our point in this section is not whether the Foundation did  or did not provide support.  Rather, the examples illustrate that verbal  fund-raising agreements can lead to disagreements about whether  commitments were met.  Verbal agreements also provide little means  for measuring performance in such arrangements.    6. We agree that the information contained in figure 8 may understate the  full amount of grants issued by the Foundation for fiscal years 2000  through 2003.  On page 28, we clearly stated that the GIFTS database  was incomplete.  At the time we completed our audit work, the  Foundation had not provided us with information showing the extent to  which the database was incomplete.  We have revised figure 8 to reflect  those total grant amounts contained in the Foundation’s audited  financial statements.
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Barry T. Hill (202) 512-3841 (hillbt@gao.gov)
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, John C. Johnson, Roy K. Judy,  Stephanie A. Luehr, Jonathan S. McMurray, Peter J. Oswald, and Amy E.  Webbink made key contributions to this report.
section_title: GAO’s Mission
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section_title: Public Affairs