Reprinted from several years ago as a part of the Brett Kimberlin blog burst.
The blogger known as Patterico is involved in a back and forth with some folks on the left. He’s been accused of all sorts of nastiness, especially being truthful, which hurts the left most of all.
Two organizations are involved in this spat. One is the Justice Through Music Program (JTM), and the other is Velvet Revolution (VR).
Let’s examine some of the facts available online for these groups.
Justice Through Music Program
JTM is registered as a 501 ( c)3 charity with the IRS. It is a Maryland tax exempt non-stock corporation, formed in 2004. The articles of incorporation may be found at this link. All online tax returns for JTM can be found at this link.
The two directors, upon incorporation were Jeff Cohen and Brett Kimberlin. The address on the last online (2008) tax filing is a residence owned by Jeff Cohen.
The purpose for JTM is stated on the Articles of Incorporation as “To shed light on some of the injustices in the world with the power of music”. On its online tax filing for 2007, the program service accomplishments for JTM are described as:
CIVIL RIGHTS, SOCIAL ACTION AND ADVOCACY PROGRAMS. WE HAVE CREATED DVDS WITH MUSICIANS TO EDUCATE YOUTH ABOUT THEIR VOTING AND CIVIL RIGHTS TO GET THEM TO REGISTER AND VOTE. WE CREATED A WEBSITE TO DO THE SAME, AND WE HAVE HELD VOTER DRIVES TO EDUCATE YOUTH AND REGISTER THEM TO VOTE.
Velvet Revolution is described on the 2005 through 2007 tax returns from JTM as a 501 ( c)4 corporation. Referring to VR, JTM responded yes to the question :
52a Is the organization directly or indirectly affiliated with, or related to, one or more tax-exempt organizations described in section 501 ( c) of the Code ( other than section 501( c)(3)) or in section 5277?
The JTM returns for 2006 and 2007 show disbursements to VR in the amounts of $42,500 and $46,500 respectively. The reason given is for “non partisan vote protection”.
VR is a tax-exempt Maryland non-stock corporation under the name VELVETREVOLUTION.US INC. The purpose for VR is stated on the Articles of Incorporation as “The public welfare and a minority for political activity”. All online tax returns for VR can be found at this link.
The four directors, upon incorporation were Brad Friedman, Ben Gelt, Jeff Cohen and Brett Kimberlin. The address of the corporation is a residential property listed as owned by a Carolyn Kimberlin.
VR appears to be what the IRS terms a “social welfare organization”. While “The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.”, it does mean that VR can lobby within the terms of its purpose. Examining the VR site suggests that its activities are directed at non-elected officials and private individuals and corporations.
It is nearly impossible to draw conclusions from form 990′s. The online versions may or may not have all the papers that were submitted. The terminology used by the IRS and the way several accounting accounts may be forced into one for filing purposes are two of the many reasons that an accountant approaches 990 analysis with some trepidation.
JTM disbursed funds to VR in 2006 and 2007. They may have done so in 2008, as well, though the record is unclear. Were the donors of those funds told, up front, that they might be used for purposes that might prevent their deduction as a charitable contribution? Did VR segregate those funds to prevent such a situation?
Occupancy expense for JTM went from $2,354 in 2005 to $80,925 in 2008. Since the location of record for both VR and JTM are private residences not zoned for business use, what was the expense for?
VR recorded expenses to private contractors on its tax returns, and no salary expenses. That is somewhat unusual, especially if any of the directors received any of those funds.
Both JTM and VR use the same P.O. Box in Washington. VR’s donations page advises that contributions are run through JTM in order to be tax deductible. How segregated are the contributions to the two entities? Can a donor rely on his donation being handled correctly?
Brett Kimberlin, through JTM’s 2008 return, is shown to be receiving a salary. His position of director is 40 hours a week, and in 2008, he was making $19,500 yearly. That suggests a man of wealth or compensation from other sources. As a director in both corporations, his compensation should be clearly stated and it is. But other compensation is left in total, leaving some questions.
As a veteran of 25 plus years of senior level not for profit accounting, I would suggest that both groups obtain an audit from a CPA firm as a matter of course. And, that they make that audit available on-line to reassure donors. I would also suggest that both groups obtain a working address in an area zoned for commercial use and not the R-90 residential zoning that they appear to be located in.
If the on-line records are complete, several instances of missing tax schedules exist. Checking the completeness of a return before filing is a critical task for any preparer. As the preparer seems to be Jeff Cohen, an attorney and a director, it would seem to be even more important for both his roles.