The Miss America Organization has weathered financial downturns in recent years, but the institution has survived, in part by partnering with other charities and requiring its contestants help cover scholarship costs with new fundraising.
Atlantic City tourism interests founded Miss America in 1921 to prolong the peak season. Now a nonprofit, its tax records say its official reason for existence is to provide scholarships for women, while promoting community service.
Miss America may never return to the level of national prominence that it served in earlier decades, but steps taken in 2006 to shore up the pageant’s finances continue to pay dividends for contestants seeking a way to cope with staggering tuition bills.
Art McMaster, president and CEO of the Miss America Organization, declined to comment. He has previously said the national, state and local organizations annually make more than $48 million in scholarships available.
Those scholarships have arguably never been more important.
Overall student loans nearly tripled between 2003 and 2012 to $956 billion, according to the New York Federal Reserve Bank. The U.S. Department of Education’s National Center for Education Statistics said the average annual price of a four-year public college rose 71 percent between 2000-01 and 2010-11 in 2011 dollars.
Many former Miss America contestants credit the scholarship program with helping them cover schooling costs. Miss America rules state contestants generally must start using scholarships within four years, and they have as long as 10 years to complete their education with no more than a two-year break. The money can be used for classes, books and other approved educational expenses.
Brianna Durand, 26, of Vineland, won five local titles between 2006 and 2010. She said she completed the requirements for her master’s degree in elementary education in January. She credited the Miss America program, and taking prerequisite courses at a community college, with limiting her student debt to $35,000.
Similarly, Teena Amador, 23, won Miss Champaign Springs 2009 when she lived in the Manahawkin section of Stafford Township. Now a Temple University law student, she said the Miss America program provided about $2,500 in scholarships.
The cumulative value of the national scholarships generally grew in the pageant’s final years in Atlantic City, according to the Miss America website. The pageant provided 108 scholarships worth $588,200 in September 2004, its last pageant in the resort.
However, the Miss America Organization awarded no scholarships in the 2005 calendar year, as it left its lucrative broadcast television contract and Atlantic City behind and transitioned to a January 2006 pageant in Nevada.
Once in Las Vegas, the value of the pageant’s 78 scholarships awarded in 2006 fell more than 50 percent to $279,500 as it faced major financial problems.
Cuts were across the board: In the final Atlantic City pageant, Miss America Deidre Downs won $56,000 in scholarships, while other competitors received at least $5,000. But in Las Vegas, Jennifer Berry, Miss America 2006, received a cumulative $35,000, while the minimum received by other contestants in the national pageant fell to $3,000.
Children’s Miracle Network Hospitals
Miss America took steps to shore up the faltering pageant in 2006 that have strengthened the organization’s scholarships.
Roger Cook, vice president of innovation for the Children’s Miracle Network Hospitals, said the Miss America Organization invited them and several other nonprofits to make proposals to the Miss America executive board in Atlantic City.
The network is a worldwide, $9 million charity that raises funds and promotes awareness of 170 North American children’s hospitals. Based in Salt Lake City, its website says it has raised $4 billion since 1983.
The two organizations have been linked since 1990, when, Cook said, Miss America contacted them to develop a partnership. Miss America became a “Goodwill Ambassador,” for the hospitals network, appearing at fundraisers and the annual telethon.
Cook said Craig Sorensen, Children’s Miracle Network Hospitals chief concepts officer, proposed a new fundraising campaign to benefit the hospitals network and the Miss America Scholarship Fund.
Miss America officials agreed.
Miss America contestants have been required since 2007 to raise at least $100 to compete in local pageants, according to pageant applications. The minimum increases to at least $250 for state pageants and to $500 for the national contest. The hospitals network receives 40 percent of the money, while 60 percent goes to national and local Miss America scholarships.
Supporters have historically separated Miss America from other beauty contests that required contestants to pay entry fees to compete for a sash and crown.
Miss America still officially makes that distinction, saying on its website that there is no “entry fee.” Instead, its enrollment documents note the fundraising “is not an entrance fee, but rather a new service requirement to participate in Miss America-sponsored pageants.”
Contestants generally supported the change, even if some, such as Amador, described the fundraising “as an entry fee, but instead of it being an entry fee for Miss America, it’s money for a nonprofit.”
Biking Ohio and autographs at the steakhouse
And they’ve raised the money in different ways.
Ellen Bryan, Miss Ohio 2011, biked 850 miles around her state to promote lightning safety, according to the Miss Ohio Scholarship Program. She sought to hit 45 cities in 27 days and raised $100,000.
Durand, whose titles included Miss Cumberland 2006, Miss Heartland 2007 and Miss Central Coast 2008, held fundraisers at Millville’s Texas Roadhouse. She signed autographs and posed for pictures while the restaurant donated 15 percent of patrons’ checks. In all, she said, she raised about $3,000 over her five years of competition.
Similarly, when Amador was an undergrad at Villanova University in Pennsylvania, she hosted bake sales and partnered with a pizza shop near the school.
Every year, the top national fundraiser receives the “Miss Miracle Maker Award” and a $5,000 scholarship, while the director of the state program with the greatest per-person average receives another $5,000 in scholarship funds for distribution.
This year’s Miracle Maker was Miss South Carolina Ali Rogers. Published reports said the Clemson University communications student raised more than $20,000.
Miss America has “been an excellent supporter of us and a great fundraiser for us,” said Clint Curry, spokesman for the hospital network. Since 2007, Curry said, the scholarship fund has received $4.8 million and the hospital network $3.2 million.
Under new financial management
In 2006, Miss America officials contacted The Community Foundation of New Jersey to help financially manage its scholarship money, foundation President Hans Dekker said.
The Morris County foundation exists, in part, because of a wrinkle in federal tax law.
Social welfare organizations, such as Miss America, are organized under the rules of Internal Revenue Code Section 501(c)(4). These organizations can lobby for causes such as the mission Miss America lists on its tax returns: to “promote the institutional platform of community service.” But donations to these charities are generally not tax-deductible.
Charitable nonprofits, such as the Community Foundation, are set up under IRC Section 501(c)(3) and face much stricter advocacy limits. But a major benefit is that donors can deduct gifts to these organizations from their income taxes.
The Community Foundation manages the Miss America Scholarship Fund and more than 100 other scholarships, Dekker said, charging a 1 percent fee for assets up to $1 million, and reduced percentages for greater sums. The foundation took in $48 million in revenue and oversaw more than $193 million in assets in 2010, according to the most recent tax returns.
Money from the Children’s Miracle Network Hospitals is now the largest component of Miss America scholarships by far, Dekker said.
The foundation has received more than $4 million in gifts for the Miss America scholarship fund since 2006, Dekker said, paid out almost $2.8 million in scholarships, and had $1.2 million on hand at the end of 2012.
More scholarship money
Figures show that the national Miss America Organization is awarding more scholarships since partnering with the Children’s Miracle Network Hospitals and The Community Foundation of New Jersey in 2006.
While the overall totals are still less than they were a decade ago, the national organization awarded 78 scholarships worth $350,800 in 2012, up 26 percent from the low point in 2006.
Miss America’s scholarship fund has similarly grown. After starting with an initial $185,000 in 2006, Dekker said, the fund received $818,000, paid $928,000 and had $1.2 million on hand at the end of 2012.
Said Amador, “Even on the local level, you still come away with a decent amount of scholarship money to put towards your education.”
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Scholarship ups and downs
The value of the scholarships awarded because of the national Miss America competition has risen and fallen through the years. The values listed represent scholarships awarded in the given year.
|*The Miss America Pageant was not held between September 2004 and January 2006.|
Show us your degrees
The money available for Miss America scholarhips has generally risen, after the national organization largely turned over control to The Community Foundation of New Jersey in 2006. In this chart, the “Gifts” category is the money received by The Community Foundation on behalf of the Miss America Scholarship Fund. “Scholarships” are the money paid out that year for scholarships regardless of the year the scholarship was awarded — contestants have as long as 10 years to use their scholarship money. “End-of-year” is the fund balance at Dec. 31 of the calendar year.
|End of year:||$185,000||$200,000||$583,000||$1.02 million||$1.3 million||$1.4 million||$1.2 million|
|Source: Community Foundation of New Jersey President Hans Dekker