Investigating Private Companies and Non-profits

Feb. 23, 2011Chris Roush

croush@email.unc.edu

Public vs. Private• Business reporters spend a lot of time writing

stories about publicly traded companies who file documents with the SEC

• Makes it easier to cover business, because lots of information is disclosed.

• Does it make reporters lazy? In some cases, I would argue yes.

Private companies• Small companies are the backbone of local

economies.

• 22.9 million, according to the U.S. Small Business Administration.

• Small businesses provide 75 percent of the net new jobs added to the economy, and represent 99.7 percent of all employers.

• More than half of the private work force is employed by a small business, which accounted for 52 percent of the private sector output.

•Can sometimes be harder to find information about private companies.

• If you look hard enough though, you’ll find what you’re looking for.

•Many private companies will disclose the information somewhere, to someone.

Private companies

•Don’t be afraid to ask.

•When someone tells you no, keep digging.

Private companies

Basic places to look

State records•The Department of the Secretary of

State’s office has records on every business incorporated in North Carolina: http://www.secretary.state.nc.us/corporations/

•Here you can search by company name,

new corporations or by registered agent.

What this will show you

• Incorporation records give you a listing of a businesses officers, or executives.

• It will also give you a mailing address and a phone number.

•Has their license expired? If it has, that could be a sign of financial trouble.

Secretary of State records

•You can also search Department of Secretary of State records to get similar information for other operations.

•These include non-profit entities, limited liability corporations such as law firms and limited partnerships.

Occupational Licensing Boards•There are regulatory boards that govern

dozens of industries in North Carolina. •They range from electricians to real estate

agents, from cosmetologists to professional boxers: http://www.secretary.state.nc.us/blio/occboards.asp?dtm=525787037037037

•Other regulated areas include hotels,

restaurants, alcohol and tobacco retailers, condominiums and mobile home parks.

County records•Before any sole proprietorship or

partnership does business in North Carolina under an assumed name, the business name must be registered.

•An assumed name is any name other than

the real name of the owner or owners the business.

•Business names or partnerships must be

filed with the Register of Deeds Office in the county or counties where it does business.

The WARN Act•Employers who are laying off or firing workers

are required to disclose such moves 60 days before they do it.

•This is a document filed with the Department of Commerce division of employment and training (State Dislocated Worker Unit).

•Regularly check for WARN act filings.

The WARN Act• An employer must give notice if a plant will be shut

down, and the shutdown will result in an employment loss for 50 or more employees during any 30-day period.

• An employer must give notice if there is to be a mass layoff which does not result from a plant closing, but which will result in an employment loss at the site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33 percent of the employer's active workforce.

Safety and Health• Worker complaints about unsafe or

unhealthy working conditions are made in writing to the Occupational Safety and Health Division.

• The division conducts investigations of complaints made by workers, investigations of work-related accidents and deaths, general schedule inspections of randomly picked firms, and follow-up inspections of firms previously cited for OSHA violations.

Workplace injuries•The Occupational Safety and Health

Administration inspects workplace deaths and injuries:www.osha.gov/cgi-bin/est/est1

•This site allows you to look at accident

investigation reports and inspection reports for companies by industry.

•Found 7 reports for Martin Marietta Materials between 1998 and 2002. Most recent inspection was at a plant in California where one violation found.

My favorites

UCC Records

•Who owes money to whom, and how much?

•These documents are available through the Department of Secretary of State’s office in North Carolina:http://www.secretary.state.nc.us/ucc/soskb/SearchStandardRA9.asp

UCC Records• A UCC filing occurs when one business sells

something to another business on credit. The business that sold the tractor to the farmer, for example, filed a UCC form showing that the tractor is collateral for the loan.

• If the business that purchased the tractor fails to pay the loan, the other business can repossess the tractor. UCC forms can show whether a business is borrowing a lot of money to make purchases.

• This could be a sign that the company plans to expand its operations.

UCC Records• When the Pittsburgh Post-Gazette investigated a

church that wanted to redevelop a shopping center, it looked at its UCC filings and discovered that banks and other lenders had given it seven loans despite the fact that it had fallen behind in paying its taxes and other debts.

• When USA Today researched former WorldCom leader Bernie Ebbers, it pored through UCC filings around the country to get a detailed list of everything he’d invested on or purchased in the past decade. That helped show the reader where the money he’d made from WorldCom had gone.

Non-profit organizations•Even though they’re not in operation to

make money, you can still find out financial information.

•www.guidestar.com is a Web site with information about non-profit organizations across the country.

•Found the financial information for 256 non-profits in Raleigh on this site. Some of them look like businesses to me.

Raleigh non-profits•WakeMed had $426 million in revenue

and $414 million in expenses.•Raleigh YMCA: $41.1 million in revenue

and $40.1 million in expenses.•North Raleigh Christian Academy: $3.6

million in revenue, $2.5 million in expenses.

•Are these really “non-profits”?

Non-profit organizations• Form 990 filed with the Internal Revenue Service.

• Form 990 is required to be filed by tax-exempt organizations with more than $100,000 in annual receipts or total assets of at least $250,000. Form 990-EZ must be filed by smaller organizations, with at least $25,000 in annual receipts and total assets of less than $250,000.

• The forms are public documents that reveal income,

expenses, assets and liabilities; expenditures by program category; program accomplishments; names of officers, directors and key employees; compensation paid to officers, directors and key employees.

• Most religious organizations are not required to file Form 990.

Non-profit resources•http://www.grantsmart.org -- A searchable

database for Form 990 filings with the Internal Revenue Service for more than 60,000 foundations. Can search by name, location or assets. More than one year may be available.

•http://www.charitynavigator.org -- Has independent evaluations of more than 2,500 charities. Database can be searched by category, region or keyword.

Non-profit resources• http://www.give.org -- The Better Business Bureau

Wise Giving Alliance maintains reports on nationally soliciting charitable organizations that are the subject of donor inquiries. These reports include an evaluation of the subject charity in relation to the voluntary BBB charity standards.

• http://www.internet-prospector.org/charities.htm -- State charities databases on the Web. Some states do not have an online search for charity information, while others allow you to search by name or word.

Small Business Administration

•Federal agency created to help small business owners.

•Virtually every small business is private.

•Millions of companies registered with SBA to receive benefits or to qualify for contracts and business.

Small Business Administration

•https://www.ccr.dlis.dla.mil/ccrinq/scripts/search.asp

• I searched for small disadvantaged

business enterprises in Raleigh and found 53. (Can do a lot of other searches here.)

•American Craftsmen Inc. is a Hispanic-owned business that is a painting and wallpaper contractor.

Small Business Administration

•Luba Corp. is a black-owned company that says it’s involved with sheep and goat farming, as well as X-ray equipment.

•Remote Management Services in Raleigh is also black-owned. It does PC consulting.

•Sometimes these filings will list revenue and major clients.

Credit unions•Many cities have dozens of credit unions.

Yet many newspapers don’t write stories about them.

•Credit union financial information is available online from the National Credit Union Administration.

•http://www.ncua.gov/ Click on “Credit Union Data” on the left-hand menu to find specific information about any credit union.

Credit unions• Jefferson-Pilot credit union in Greensboro

reported net income of $71,000 in the third quarter of 2009, nearly three times the net income from same quarter a year ago.

•News & Record credit union reported net income in the third quarter that was four times higher than any previous quarter for the past year.

Is there a turnaround story here?

Banks• Regulated by state and federal agencies.

• Data on bank branches -- including private banks -- such as market share is available online.

• http://www.fdic.gov. Go here and click on “Bank Data” to get market share info.

• http://www3.fdic.gov/idasp//. Find any bank holding company or location insured by the FDIC. Search results will tell you the bank’s total deposits and assets, as well as financial performance.

Banks

•Carolina Bank Holdings from Greensboro has four branches, three in Guilford County and one in Randolph County.

•They range in deposits from $1.0 million to $93.0 million, but two with less than $4 million in deposits.

•Where are those two branches located?

Are the branches with small deposit amounts new locations, or are they candidates to be closed in the future?

Random Web sites

Political campaign contributions

•How much did Michael Jordan give to certain local political campaigns? http://www.followthemoney.org/

•What about federal campaigns?http://www.tray.com/cgi-win/indexhtml.exe?MBF=NAME

•The last database goes back to 1980. Can

search company names as well.

Lobbying• Does the company have a lobbyist, and how much

are they paying them?http://www.opensecrets.org/lobbyists/index.asp

• North Carolina Peanut Growers Association are big

lobbying spenders in Washington.

• University of North Carolina at Chapel Hill spends $120,000 on lobbyists, while UNC-Greensboro spends $80,000.

• Duke Power spent more than $860,000 on Washington lobbyists. What is it getting out of it?

Hospital financial information•http://www.ahd.com/freesearch.php3

•Here’s the list of Greensboro hospitals that they have financial information for: Behavioral Health, Kindred and Moses Cone.

•This is a subscriber site.

Patents and Trademarks•http://patents.uspto.gov/

•Type in a company’s name and see what they’re getting patents for.

•Red Hat has received 33 patents, including ones recently for a “Method and system for responding to file system requests” and one for “detecting duplicate and near-duplicate files.”

• Information in the patent application goes a long way in explaining what a business does.

The EPA•http://www.epa.gov -- Click on the docket to

the left on the home page to see Federal Register notices, support documents and public comments for regulations the agency publishes and various non-regulatory activities.

•Also a nice search engine of environmental

information available by ZIP Code, which lists EPA regulated businesses.

Toxic Waste•http://d1.rtknet.org/tri/ -- The Toxic Release

Inventory is a database of information about releases and transfers of toxic chemicals from manufacturing facilities.

• Facilities must report their releases of a toxic

chemical if they fulfill four criteria. This can be searched by geographic regions as well as by facility, parent company and industry.

Activists

•http://activistcash.com/ -- Profiles anti-consumer activist groups, along with information about the sources of their exorbitant funding.

•Breaks them up among activist groups,

foundations, celebrities and major individual players in the activist community.

Amusement parks•http://www.cpsc.gov/cpscpub/pubs/

amuse.pdf -- This file lists who regulates amusement park rides on a state-by-state basis.

EEOC•http://www.eeoc.gov -- The Equal

Employment Opportunity Commission investigates charges against businesses for unfair employment practices or discrimination.

•“Litigation” section on the left side of the

page has a link to a monthly report on all of the actions taken by the agency.

Consumer advocates•http://www.nasuca.org -- National

Association of State Utility Consumer Advocates, which represents the interest of consumers before state and federal agencies in 40 states and the District of Columbia.

•Nice list of its testimony and filings.

Consumer products•http://www.planetfeedback.com/ -- Search

for complaints of compliments about any product and any company at this site.

• If you’re writing about consumer products companies, the postings here might provide some story ideas.

One last thought

•Good business writers are hard to find.

•Make a name for yourself writing business stories, and your career will take off.

•A knowledge of how to write business stories about private companies can be applied to any beat at a newspaper or any publication.