Concerns Raised Over $60 Million in Black Lives Matter Funds
Feb 02, 2022
"'Irrespective of where any person falls on the political spectrum or what their position is on any social justice issue, hopefully, we can all agree that tax-subsidized public charities have an ethical responsibility to be transparent with the public about how they are operating and how the donations they receive are being used,' Styron said. 'The amount of money involved here is not insignificant.'" – Washington Examiner, 01/27/2022
Any charity with a mission or programs that some find controversial can expect to receive ongoing criticism from those who oppose its cause. The fact that some of this criticism may be unfair or politically motivated should not distract donors from the fact that all charities need to be held accountable for basic benchmarks of governance, transparency, and financial stewardship. Several media outlets, including the Washington Examiner, Fox Business News, and others, have raised concerns about the Black Lives Matter Global Network Foundation (BLMGNF), the 501(c)(3) national public charity arm of the Black Lives Matter Global Network (BLMGN). Donors should be careful to not confuse BLMGNF with the completely unrelated charity of a similar name, Black Lives Matter Foundation, which was on track to receive an estimated $4.35 million in donations intended for the social justice movement Black Lives Matter in the wake of George Floyd's death, according to a July 6, 2020 MarketWatch article.
One concern raised about BLMGNF is that the charity appears to have been operating without a leader since some time in May of 2021 when its co-founder stepped down from the executive director position, according to a January 27, 2022 article published in the Washington Examiner. According to the same article, "BLM co-founder Patrisse Cullors appointed two activists to serve as the group's senior directors following her resignation in May... But both quietly announced in September that they never took the jobs due to disagreements with BLM. They told the Washington Examiner they don't know who now leads the nation's most influential social justice organization."
While it is not uncommon for charities to appoint interim leaders while they take time to vet more permanent candidates for a president or executive director role, what is concerning about BLMGNF is that it is unclear who exactly is currently running the daily operations or governing the organization. Only two "Officers, Directors, Trustees, and Key Employees" are listed in the charity's 2019 IRS tax Form 990-EZ, one of whom, Patrisse Cullors, left the charity in May of 2021. As of February 2, 2022, CharityWatch has been unable to locate a list of BLMGNF's current board of directors on the charity's website. CharityWatch reached out to BLMGN via its press email contact address twice in June of 2020 for clarification about the legal structure of its network but received no response. We reached out again recently on January 28, 2022 to request copies of its fiscal 2020 audited financial statements and tax filings and with some basic questions about its leadership and governing body. As of February 2, 2022, we have not received a response.
"'Like a giant ghost ship full of treasure drifting in the night with no captain, no discernible crew, and no clear direction,' CharityWatch Executive Director Laurie Styron said of BLM [Global Network Foundation]." – Washington Examiner, 01/27/2022
BLMGNF received a transfer of nearly $66.5 million from its former fiscal sponsor in October of 2020, according to the fiscal 2020 audited consolidated financial statements of that sponsor, Thousand Currents. According to BLMGNF's "2020 Impact Report" posted on the BLMGNF website, the charity "raised just over $90 million in one year, 2020." In its "Impact Report," BLMGNF also states that it has "committed" approximately $21.7 million to 30 local organizations and BLM chapters. However, some BLM chapters take issue with how BLMGNF has been sharing the wealth and have also complained that BLMGNF has not allowed them to participate in key decisions or been adequately accountable to the public. In a BLM chapter statement entitled "It is Time for Accountability," published in November of 2020, these chapters specifically addressed issues surrounding the central organization's financial support of the local organizations, stating: "To the best of our knowledge, most chapters have received little to no financial support from BLMGN since the launch in 2013. It was only in the last few months that selected chapters appear to have been invited to apply for a $500,000 grant created with resources generated because of the organizing labor of chapters. This is not the equity and financial accountability we deserve."
The Trouble with Charity "Impact" Reports
Self-published "impact" reports have been gaining in popularity over recent years with charities and the trade associations and big data websites that represent and market them. CharityWatch has observed a disturbing trend in which independent audited financial statements produced by outside certified public accountants (CPAs) that quantify a charity's accomplishments and disclose sometimes unflattering but critical information have been deemphasized in place of promotional "impact" reporting that charities use to market themselves. In a July/August 2021 article titled "Busting the Myths of 'The Overhead Myth'" published in the Thomson Reuters journal, Taxation of Exempts, CharityWatch executive director, Laurie Styron, warned donors to not conflate a charity's promotional "impact" reporting with independent financial efficiency ratings published by CharityWatch that are based on an in-depth analysis of charities' audited financial statements and annual tax filings, or equate such promotional materials with meaningful evaluations published by rigorous impact evaluators like GiveWell.
For example, in its 2020 Impact Report, BLMGNF states that it has "committed to 30 local organizations and BLM chapters approximately $21.7 million." This statement does not say that these funds have actually been distributed to the chapters, and the term "committed" is not defined to communicate if and when such distributions have or will take place. An adequate analysis of BLMGNF's independent audited financial statements and tax filings could shed more light on which chapters received support, when they received it, and in what amounts, as well as the central organization's other financial activities. The same is true for many other "impact" claims BLMGNF made in its 2020 Impact Report—verifying these requires an independent analysis of the charity's audited financial statements and tax filings, which BLMGNF has thus far not been willing to provide to CharityWatch. CharityWatch's search for BLMGNF's fiscal 2020 audit and IRS Form 990 on the IRS and other websites, and in the public databases of state charity regulators has also been unsuccessful as of February 2, 2022.
Black Lives Matter started as a grassroots movement consisting of an international network of individuals and chapters collectively operating under the Black Lives Matter Global Network umbrella. When CharityWatch reached out to BLMGN in June of 2020 for clarification about how the organization is structured, our questions were met with silence. It turns out that CharityWatch is not the only one that thinks some clarification is needed to help the public better understand which BLM organizations are receiving their donations and how they will be used. In a statement published in June of 2021, "Tell No Lies," the signatory BLM chapters said:
"We recognize that it can be difficult to fully engage in discussions about the Black Lives Matter Global Network, #BLM, Black Lives Matter, and BLM Chapters because there are multiple entities involved and few if any details have ever been offered publicly about the differences among them."
The statement links to a PDF containing the collective knowledge of these chapters about how the various Black Lives Matter entities are organized. It provides the following breakouts:
- The BLM Network
- Local Chapters
- Black Lives Matter Global Network Foundation
- BLM PAC [Political Action Committee]
- Strategy Table
- The Transition Team
The statement describes the intention of the BLM Network to be "a Network of chapters that would build an organization with political alignment, clear shared objectives, and shared decision making processes." Local chapters "were created by organizers in cities all over the country, not by BLMGN," according to the statement. The statement describes the BLM Global Network Foundation as follows:
"The BLM Global Network Foundation was a new organizational formation beginning in 2020 first as a fiscally sponsored project of Thousand Currents, a 501(c)(3) nonprofit that has served as BLMGN's sponsor since 2016. Fiscal sponsorship was transferred to Tides [a different nonprofit fiscal sponsor] in 2020. Chapters were told that Patrisse Cullors was the sole board member. No details about the legal incorporation or current Board members have been provided."
The #BLM10, according to the statement, "includes the chapters that have united to publicly demand accountability after continued internal calls of accountability were unmet by the BLM Global Network Foundation." As for the Black Lives Matter political action committee, BLM PAC, the statement asserts the following:
"Patrisse Cullors is the Co-Founder and Chair of the Black Lives Matter Political Action Committee and was announced in October of 2020. There was never an internal conversation around the formation of this entity. BLM members were informed when it was announced to the public. We have no knowledge of the PAC, who it represents, what funds were used to create it, or why it was created..."
Additional details about these and other entities can be found in the BLM 10+ Black Lives Matter Entities PDF. CharityWatch is in possession of the Black Lives Matter Global Network Foundation's 2019 IRS Form 990-EZ (tax ID #82-4862489) and has put in a request with the BLMGN for 2020 audits and tax filings for this legal entity, as well as for BLM Grassroots. As of February 2, 2022, BLMGN has not responded to our request.
CharityWatch Calls for Accountability
Calls for the Black Lives Matter Global Network Foundation to be more transparent and accountable have made for some strange bedfellows as right-leaning media outlets and BLM chapters alike have echoed the same sentiments about governance and other issues at this organization. As a relatively new 501(c)(3) public charity, BLMGNF may reasonably experience some missteps and growing pains as it navigates the difficult task of centralizing the voice and goals of the larger BLM movement while also managing the enormous amount of financial resources it has received from the public since 2020. Transparency, accountability, and good governance are all necessary in order to achieve public trust and ensure that stakeholders have a voice in how the resources many helped to generate for the organization are best used.
CharityWatch calls for BLMGNF to demonstrate its commitment to public accountability by providing us with copies of its fiscal 2020 audited financial statements and IRS Form 990 for our analysis. It is extremely concerning that the national public charity entity of arguably the largest social justice movement in the United States has not done a better job of communicating its financial activities to the public in a timely manner or of adequately addressing other questions related to its governance.
Read CharityWatch's UPDATE on Black Lives Matter Global Network Foundation.
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