Narconon International: Analysis
[Work in progress] Last updated on July 24, 2008 18:10, Raymond Hill.
Contents
Statement of program service accomplishments
In 2006, Narconon International stopped reporting the following statistics:
- The worldwide number of 'students' who graduated the Narconon drug rehab program in the year
- The worldwide, cumulative number of 'students' who graduated the Narconon drug rehab program
These were useful statistics to gauge concrete accomplishments by Narconon International, in relation with aggregate revenue/spending of other Narconon centers.
It's unclear why Narconon International would stop reporting these useful figures. Could it be because they were leading to embarrassing questions? In the "Aggregate summaries" page, I already questioned the poor correlation between the aggregate revenue/expenses of the Narconon centers, and the reported worldwide number of individuals who graduated...
So I will have to restrict the analysis to the years 2003-2005. Here is a table showing the reported statistics along with aggregate revenue/expenses related to the Narconon drug rehab program:
| 2005 | 2004 | 2003 | ||||
| Narconon International, worldwide number of 'students' who graduated | 1,500 | 1,400 | 1,375 | |||
| Narconon centers which offers drug rehab services | Revenue | Expenses | Revenue | Expenses | Revenue | Expenses |
| Narconon Florida, Inc. | $193,173 | $197,842 | $129,009 | $129,181 | $83,902 | $79,740 |
| Narconon Gulf Coast, Inc. | $1,016,897 | $934,125 | ||||
| Narconon Northern California | $4,908,332 | $2,078,891 | $3,081,564 | $2,506,672 | $3,299,287 | $2,921,850 |
| Narconon of Georgia, Inc. | $1,176,292 | $1,044,559 | $912,565 | $854,231 | $729,004 | $769,738 |
| Narconon of Oklahoma, Inc. | $13,102,970 | $8,564,255 | $11,379,999 | $7,076,771 | $8,870,250 | $5,658,107 |
| Narconon Southern California | $9,439,180 | $4,954,782 | $6,272,662 | $2,497,272 | $4,936,192 | $2,161,138 |
| Narconon Stone Hawk | $7,735,338 | $6,286,929 | $5,135,022 | $3,586,811 | $3,052,598 | $1,542,632 |
| Total | $37,572,182 | $24,061,383 | $26,910,821 | $16,650,938 | $20,971,233 | $13,133,205 |
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Only the figures expressly stated as earned and spent on Narconon drug rehab program are used in the table.
Keeping in mind...
- Only U.S.-based Narconon centers are used in the above table/graph
- Only the Narconon centers which provide 990 filings are used in the above table/graph
... and assuming good faith, how can we explain the dichotomy between the worldwide growth in number of clients who graduated, 9%, and the growth in aggregate revenue and expenses on the Narconon drug rehab program, 79% and 83% respectively, between 2003 and 2005?
Hypothesis one
The Narconon centers which 990 filings are included in the current analysis underwent a dramatic increase in the number of clients who graduated, while the number of clients who graduated from Narconon centers not included in the present analysis decreased dramatically between 2003 and 2005.
This hypothesis doesn't stand scrutiny, for many reasons:
None of the Narconon centers for which we have 990 filings shows a large enough growth rate in the number of clients who graduated between 2003 and 2005.
As a matter of fact, Narconon of Oklahoma, Inc., the largest Narconon center in the U.S. (and worldwide), shows a growth of 2.2% in the number of clients who graduated. Narconon Southern California, the second largest Narconon center in the U.S., shows an actual decrease of 27% between 2003 and 2005.
Narconon Stone Hawk, the third largest Narconon center in the U.S., shows a growth of 200% for the number of clients who graduated between 2003 and 2005, but its share of "graduated clients" represents only 22% of the worldwide figure provided by Narconon International, in 2005.
To be sure, if we remove Narconon Stone Hawk from the analysis, we end up with a negative growth rate in the worldwide number of graduated clients, minus 8%, while the aggregate revenue/expenses related to Narconon drug rehab program grow by 67% and 53% respectively, between 2003 and 2005.
To add to the fact that this hypothesis doesn't stand scrutiny, Narconon consistently boasts in its 990 filings that it is expanding worldwide. (See statements of program achievement for 2006
, 2005, 2004, 2003
Hypothesis two
The ratio taken from number of individuals who graduated relative to the number of individuals who enrolled has gone significantly down. (From here on, let's call this ratio "G-E ratio")
Unfortunately, Narconon International doesn't provide figures for the worldwide number of individuals who enrolled in the Narconon drug rehab program.
Only Narconon of Oklahoma, Inc., and Narconon Stone Hawk present information about the number of individuals who enrolled/graduated for a number of years. In the case of Narconon Stone Hawk, unfortunately we can't rely on the figures, as it was found that Narconon Stone Hawk contradicted itself with regards to the number of individuals who enrolled/graduated.
That leaves us with Narconon of Oklahoma, Inc.:
Narconon of Oklahoma, Inc. 2005 2004 2003 Total Number of individuals who enrolled 914 840 800 2554 Number of individuals who graduated 456 499 446 1401 Ratio graduated/enrolled (G-E ratio) 0.50 0.59 0.56 0.55 Since Narconon of Oklahoma, Inc., is the largest Narconon center in the world, and since the number of individuals who graduate from that center represents at least 30% of the total (between 2003 and 2005), I will assume, for lack of better source of data, that the G-E ratio obtained above is representative of all the Narconon centers as a whole.
As seen, there was no significant change in the G-E ratio, the average being 55% of individuals who enrolled will eventually complete the Narconon drug rehab program.
This absence of significant change in the G-E ratio between 2003 and 2005 means that the current hypothesis is not valid.
Note: Narconon centers advertize their drug rehab efficiency at around 70% or more. This is not the same as the G-E ratio used here. The problem with Narconon's advertized efficiency is that at most, only the individuals who completed the program are taken into account — and even then, there are flaws in how the efficiency is calculated. See Narconon Exposed: "Does Narconon Work?" for further details on the real overall efficiency.
Hypothesis three
The average earning per client, and the average program delivery cost per client for the Narconon drug rehab program in the U.S. went up dramatically.
It is very difficult to obtain the price of the Narconon drug rehab program for any Narconon centers, this is not information readily obtained from any of the websites advertizing the various Narconon centers in the U.S. It's entirely possible that the Narconon centers raised significantly their enrollment fees between 2003 and 2005.
However, we can focus on the cost of delivering the Narconon drug rehab program per individual, which should correlate well to the cost of living, hence the growth rate for the cost of delivering the drug rehab program for a single individual should be somewhat close to the inflation rate for the same period, between 2003 and 2005, in the U.S.
Considering the largest Narconon centers for which we have figures for the number of graduated clients, the inferred growth rate in program cost delivery per individual between 2003 and 2005 (all else being equal):
Growth rate between 2003 and 2005 United States' cost of living [ref] 6% Program delivery cost, normalized, for Narconon of Oklahoma, Inc., 48% Program delivery cost, normalized, for Narconon Southern California 215% Program delivery cost, normalized, for Narconon Stone Hawk 36% Program delivery cost, normalized, aggregate 68% Clearly, inflation alone can't explain the dramatic growth in funds spent for each individual who completed Narconon's drug rehab program.
Which means that despite the Narconon drug rehab program being a precise set of procedures, which do not vary among the various Narconon centers, the Narconon centers in the U.S. have spent much more to deliver these same precise set of procedures in 2005 than in 2003.
This leads to the following questions:
Exactly on what the Narconon centers in the U.S. are spending in 2005, that they were not spending in 2003? This question certainly applies even more so to Narconon Southern California, as its spending per individual has grown dramatically.
Conclusion
The reported worldwide number of individuals who graduated the Narconon programs doesn't correlate well to the aggregate revenue/expenses of the major Narconon centers in the U.S. This implies:
- The Narconon centers raised their enrollment fees significantly (not illegal)
- Narconon International provided false information on its statement of program service accomplishments (could this explain why Narconon International stopped providing the worldwide number of individuals who graduated in 2006?)
and/or
The Narconon centers for which we have 990 filings, fabricated and/or inflated unduly expense items. Further analyses are required to identify suspicious expense items for each of these of Narconon centers for which we have 990 filings.