The Business of Boy Scouts and Girl Scouts | My First Million Podcast

Sam Parr

What's going on with Boy Scouts? Adam, look this up. So, Boy Scouts... look it up on Google. Everyone knows what Boy Scouts are. We actually have a lot of non-American listeners, right? I just realized that.

Shaan Puri

even me I grew up in america but I didn't do boy scouts so I have a very loose understanding of okay

Sam Parr

How the hell is it going about Boy Scouts and Girl Scouts when you're between the ages of 8 and maybe 18? It's just like an after-school program and a weekend program. For Boy Scouts, it helps you become a man. It's an organization that's been around probably since the late 1800s. It was rooted...

Shaan Puri

you do it

Sam Parr

No, I played sports. My joke was, "Do you do Boy Scouts?" No, I do sports. So, my mom and dad made me choose between ice hockey and Boy Scouts. I did hockey, but a lot of my friends did both. When I grew up, I was Catholic. It's like altar boy, Boy Scouts, or sports—that's what you choose.

Shaan Puri

you dodged a bullet well yeah fuck

Sam Parr

Yeah, I did. I got all my teeth knocked out from hockey, but at least I did get that other.

Shaan Puri

shit happening

Sam Parr

To me, Boy Scouts and Girl Scouts are basically youth groups. They teach you how to be a man or a woman. Alright, we learn to tie knots, sell cookies, and all that good stuff. It's rooted in religion, though, which is controversial now that religion is not as popular in America. As for the Boy Scouts, what happened? They recently got sued because of molesting boys, is that right?

Shaan Puri

Like, not just sued once. There's just a litany of lawsuits, and they were like, "What are we gonna do with all this?" They basically are declaring bankruptcy.

Sam Parr

Yeah, it's a huge con. A very big deal. So, I was curious, and here's something that's interesting about Boy Scouts, Girl Scouts, and any nonprofit: all their financials are available.

Shaan Puri

yeah just just look up annual letter annual report yep boy scouts and it'll all be there

Sam Parr

Any nonprofit organization allows you to see everything. You can see how they spend their money and what they own. It's really cool. So, I looked up the Boy Scouts, and let me give you some stats here. They have **$1,500,000,000** in assets. Membership right now is around **2,000,000** members, which is at an all-time low. In the 60s, 70s, and 80s, it was all the way up to **6 or 7 million** members. They make **$100,000,000** in revenue. I think in 2018, it was **$200,000,000** in sales. Most of that revenue came from fees. So, you pay a fee to join. Actually, Adam, look up how much it costs to join the Boy Scouts. They also make money from some merchandise and other sources, but the majority of their revenue comes from fees. Additionally, they make between **$50,000,000** and **$80,000,000** a year in contributions and gifts. It costs **$60** a year to join.

Shaan Puri

So, they receive $50 to $80 million in gifts or donations. Yeah, and HQ [headquarters] receives $50 million. What are they spending on here? What's going on?

Sam Parr

Yeah, so HQ includes programming and all that stuff. Basically, they're HQ, and they have 2,000,000 members. They have offices where their headquarters is, and then people volunteer to lead troops. You probably give them a little bit of money, like an allowance or something like that, a small stipend, right? Then they pay for all the programming. So maybe kids have to raise money to go camping, and I think the Boy Scouts will contribute a little bit of that.

Shaan Puri

so what's interesting here for you is that you're interested in the business the ideas

Sam Parr

Or the banking business, and here's why. So, I'm going to compare Boy Scouts to Girl Scouts, and then I'm going to show you the differences in financials. After that, I'll compare it to one other group that I think is actually doing it right. Here's what I think: I believe that these new clubs, particularly young men's clubs, could be massive and can exist in today's world. And you want to know what Boy Scouts' biggest expense is? Insurance.

Shaan Puri

insurance

Sam Parr

they pay a $120,000,000 for insurance they pay a lot of money for it

Shaan Puri

because they're taking kids out into the wild places

Sam Parr

Yeah, and that was wild to me. That's their biggest cost. Okay, so now let's compare this to Girl Scouts. This is timely because Girl Scout cookies just got released. Girl Scouts sell $800,000,000 a year in Girl Scout cookies.

Shaan Puri

unbelievable

Sam Parr

That's fucking crazy, right? Crazy! 75% of that revenue is there. That's how much they paid. 25%... that's it.

Shaan Puri

their take

Sam Parr

They paid 25% to the bakeries, and I think they actually might own the bakeries.

Shaan Puri

yep

Sam Parr

And then, so that's their take. The majority of that revenue goes to the troops. Is it called troops?

Shaan Puri

chapters or what

Sam Parr

The chapters pay for... they give young women scholarships. They just teach them how to be young women. They do all types of programming and things like that. So, here are a few ways in which they're different: $36,000,000 in dues, which is way less. Their membership is about the same as Girl Scouts, and they receive roughly 10% of the gifts back that Boy Scouts do.

Shaan Puri

donations

Sam Parr

Yeah, so, Girl Scouts is a way better business right now. I'm not trying to advocate that these types of things necessarily should be for-profit businesses. There is a place for nonprofit, but let's just say that we want to make this a for-profit. Here's what I would do. Yep, Boy Scouts? They're... they're in trouble. The reason they're in trouble is this whole... so regardless of whether you're religious or not, religion in America is not as popular. It's still very popular, but it's declining. Right?

Shaan Puri

not it's not growing

Sam Parr

It's not growing, and Boy Scouts has a very religious component about it—extremely so. In America, we don't have wars going on right now. When you turn 18, you could join the military, as was the case during World War I, World War II, the Korean War, the Vietnam War, and even up until the early nineties with the Iraqi War. There was a rite of passage for a man. You know, you get a job, you have kids, or you go to war. There's this rite of passage that says, "Alright, you're a man now." We don't really have that now, and I think that's actually a huge problem in young men's lives. Women have it a little bit because, biologically, they have their own rite of passage. I mean, that's like, by definition, a woman. Men, on the other hand, can be like a 25-year-old boy or a 35-year-old boy. Especially in Silicon Valley, there are these guys who still dress like kids and don't act like men. So, I actually think there could be a rite of passage—a group that helps boys become men.

Shaan Puri

but you're thinking past the boy scout age you're talking about 18 18 years old you're talking about younger

Sam Parr

no no no I I think that you can learn that from age 8 to 18 slowly

Shaan Puri

gotcha

Sam Parr

and so the best membership

Shaan Puri

how would you do it

Sam Parr

So, the best membership group I've ever seen—and I've done a lot of research on this—is AARP. AARP is what it is: once you become 60 years old, they mail you a thing, an AARP card, and they go, "You're in!" You're like, "What? I'm in?" Yeah, you just turned 60. They find out how they work with the post office and discover when you turn 60 years old. They send you a card that day. Nice! You get your card, and AARP has 38 million members. It's really cheap to become an AARP member—like $50, maybe less, but maybe $18. It's really cheap depending on the tier you get. However, AARP makes $1.6 billion in revenue. So, where's all that money coming from? It's not coming from fees; it's all coming from the back end. Once you become an AARP member, they go, "Alright." They partner with, I think, United Insurance and a few others, and they make—what does it say up there?—$1 billion a year from affiliates. Meaning, you're now older, and they're going to give you a discount on some insurance because they've pooled everyone together. They say, "You should use United Insurance; it's the best one." That's when they get their $1 billion cut.

Shaan Puri

It's a discount club. As a member, you pay a low fee and make your money back in discounts pretty much from day one. They make their money by getting the vendors to offer them a cut for all the customers that they can drive to them.

Sam Parr

yes

Shaan Puri

And yes, this is brilliant! The first time you told me about this, you were talking about, "Can we do this for millennials?"

Sam Parr

yeah I wanted to do this for the hustle

Shaan Puri

And I was like, "Why didn't you do this? I've always thought this was your best idea." But you must have learned something along the way that made you less bullish on it. What was that?

Sam Parr

I'm not less bullish on it, but I'll explain that. No, sorry, I am a little less bullish, but I still think it could be great. So, AARP, it's like one of the... it might be one of the largest lobbying groups ever. So if you want to become president, you have to appeal.

Shaan Puri

to the aarp

Sam Parr

**Appeal to AARP's 38 million members.** You gotta think about the elderly. We're going to make sure you're taken care of. AARP is so big; they have, like, $3.5 billion. They have a hedge fund. I mean, this is a legit amount of cash they have. When you think about what makes a group like this passionate, it's really similar to a cult. I think what you need is a common bond. So, what brings you guys together? For Girl Scouts, it's that you're a young girl. For Boy Scouts, it's that you're a young boy. For AARP, it's that we're all 60. We have to figure out how to get through this together. You need an enemy. A good example of a really strong group like this is the NRA. If they say they're going to take our guns, they're going to raise so much money off that. So, you need an enemy. Another thing you need is a leader—a face. The NRA had Wayne LaPierre as their leader. I'm not even a gun guy, and I know his name. Another one was the famous actor Charlton Heston, who had that phrase, "From my cold dead hands." That's the leader. You need this mentality of "us versus everyone" and "we're the underdogs." Boy Scouts and Girl Scouts could actually have a little bit of that Christian vibe, but I don't know how you do it without that. Finally, you need rituals. Girl Scouts and Boy Scouts all have that; they have the pledge. I don't know what AARP does, but when I'm thinking about this, I totally think that you could recreate some of these. I think it would take a long time.

Shaan Puri

But it would take a long time. I don't think you need all those things. I think those are all like boosters; they all strengthen the whole thing, and I think they come over time. But I don't think they're prerequisites. You don't, like, I don't know who's the leader of the Boy Scouts. I don't know, like, maybe there was one, maybe there wasn't. I'm not sure.

Sam Parr

Not sure I agree with you. You don't need it, but I think your [argument] is proving my point, which is they're declining and there is a good [reason for concern].

Shaan Puri

Sure, but I guess they got to a certain size and mass. So what I think you just have to do is sort of align a common set of people who have a similar desire or desired lifestyle. Whether it's, you know, Christian faith combined with learning life skills and being out in nature, right? Boy Scouts.

Sam Parr

And actually, I think you can have this **Christian conservative group** that will crush it. What I do every morning is I go to opposite news sites. I go to **HuffPost** and then I go to **Breitbart**. You know what that is? Yeah, okay. They have a smaller audience, I bet, than HuffPost. Every article has 5,000 comments, right?

Shaan Puri

super engaged

Sam Parr

yeah so there there's a big enough group there right

Shaan Puri

To do so, I think as long as you tap into any lifestyle that people care about, you can create a group like this. As long as you have the right combination of benefits, programming, and rituals—all those things that I think are good and helpful. I also think that these can happen. When I saw Boy Scouts was going out of business, I looked up the biggest Boy Scout competitors, and they were all Boy Scout clones. They were all faith-based nature programming for young men. It’s like, okay, well, it just seems like there are other people who want the same job to be done, as they say, who want the same outcome. But they put less value in, let's say, the religious component or maybe less value in the nature component. Did I tell you my sister runs a program? She has two childcare facilities that are like in-home childcare facilities. She took a house and turned it into a daycare or a preschool. One is for younger kids, and one is a preschool. She wanted to do a third, but the permitting was going really slow. So she bought this house, but the permit is going slow. She did kind of a genius thing. She created this program called Nature Kids. She said, "Okay, I can’t get the permit for my in-home thing; they’re just taking six months. But I have this huge waitlist of people who want their kids to be a part of something. What if I made a nature-based program?" So she created Nature Kids. She now needs no permitting. They just go around through the parks and the nature out here. They learn about plants and animals, do little exercises, outdoor painting, tree climbing, and they’re just out all day. Parents love it because they want their kids to be outside and not cooped up or looking at a screen. So, I want my kid out there in nature learning these skills. There’s no religious component to it, and she has a waitlist out the door now. It can scale; she could just create a franchise out of this. This Nature Kids thing is like a tiny speck, but I think it’s comparable to what Boy Scouts is providing.

Sam Parr

So, here are the two trends that this is capitalizing on. The first is... I don't know about you, but I bet you fall in the same category as me. Tech executives, people who have grown up with the internet and phones, do...

Shaan Puri

not want their kids doing this shit

Sam Parr

Do not want their kids doing this stuff. I'm the same way. I bought this thing that locks potato chips in a sealed, like a time locker, right? It's a KitchenAid, and I put my phone in there. Okay, so like, I don't want my kids using phones and stuff like that. So, this tends to get bigger as you and I start having children already.

Shaan Puri

like yeah we're gonna limit this to 40 minutes a day or

Sam Parr

Something, you know, and so we're going to see that happen. The second trend that I don't know if it's a trend, but I do think it's actually needed is we have to have artificial... We have to actually start creating these things that allow young women and young men to become... yeah, men, right? And they...

Shaan Puri

character building

Sam Parr

Yeah, and I've seen it too. I've seen these things now for grown men where you can pay a fee and...

Shaan Puri

mankind project is super popular

Sam Parr

and they're awesome I totally wanna do it

Shaan Puri

yeah

Sam Parr

I went to an all-boys Catholic high school, which was pretty good because they helped us evolve and grow. However, I really wish that my father had been more hands-on. I wish I had more of a "Alright son, here's what you gotta do. You treat people this way..." You know what I mean? I think that can actually be way more impactful.