NC Pride’s tax-exempt revocation demands more transparency

Editor's Note

The NC Pride Festival and Parade that takes place in Durham every year has a significant place in North Carolina history. For more than 25 years, the parade and related festivities have made their mark on Durham, the Triangle and the state.

Starting in the late 1980s and continuing throughout the next decade, the festival and parade toured North Carolina in cities and towns both large and small, including Asheville, Carrboro, Charlotte, Greensboro, Raleigh and Winston-Salem. As it traveled the state, the group brought with it a message of change, equality and inclusion. There can be no argument: NC Pride is the longest-running LGBT Pride event in the state; itís also one of the largest and most influential. Tar Heel residents and folks from surrounding states flock to the group’s events each year.

For such a successful run of events, it would seem the group’s leadership has a firm grasp on their responsibilities as leaders of a non-profit community organization. Unfortunately, that’s not the case.

In 2010, it was revealed that NC Pride had failed to file the necessary annual returns all non-profit groups must submit to the Internal Revenue Service. Known as a Form 990, the annual return documents a non-profit group’s expenditures, revenue, organizational leadership and staff salaries, if any. The revelation, brought about by qnotes’ first Community Assessment Survey of non-profits across the state, couldn’t have come at a better time for NC Pride; the IRS had recently announced it would begin automatically revoking the tax-exempt status of organizations that had failed to file their necessary paperwork for a consecutive three or more years.

At the time, NC Pride director John Short seemed apologetic and eager to fix the oversight. Yet, the issue soon faded into silence.

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The oversight was finally solved, though I imagine it wasn’t the solution Short or NC Pride supporters had hoped for. On June 8, the IRS released tax-exempt revocations for more than 275,000 non-profit groups across the country — NC Pride included.

qnotes first reported on the revocation on June 11. Our efforts to reach out to Short were ignored, prompting us to dub him the “M.I.A. director” in a follow-up report on June 15. At the same time, we reported on the resignation of NC Pride’s volunteer spokesperson.

While former spokesperson Keith Hayes extolled the history of NC Pride and Short’s commitment to the group, he, too, found himself frustrated by the recent turn of events.

“I cannot continue as a spokesperson for an organization when I am not kept aware of the public issues it is facing,”he told qnotes.

For more than a week, Short refused to make contact with qnotes. Finally, just hours before we were to send our June 25 print issue to press, Short responded via email with a brief, four-sentence statement — one that left much to be desired. (Read that story, “NC Pride’s tax-exempt status revoked; M.I.A. director responds,” at goqnotes.com/ 11513/.)

“At the present time, we are still in talks with the IRS about our 501(c)(3) status and the correct completion of all forms required to bring us back to full compliance,” Short said in an email to qnotes.”However in that process, we have also learned that since we receive no grants or private donations, and that all of our funding is from advertising revenue, we will not be affected in our yearly projects and operations of our websites while this process continues.”

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Short continued, “It is also important to remember that the Pride Committee of NC, Inc. is a group of part-time non-paid volunteers that assemble once each year in the summer to organize and direct the NC Pride Parade and Festival in September that has become the largest and most successful GLBT [event] in our state, and in its success encouraged at least eight other local Pride events around North Carolina. It is also important to note that all of our NC Pride events are always free to the public.”

Short’s brief statement seems almost flippant and unconcerned with their tax-exempt revocation, and because he refused to speak directly with qnotes several concerns remain unaddressed.

His statement that the group continues to work with the IRS is one we’ve heard before — an unfulfilled promise that all would be brought back to order last year. Short’s explanation of NC Pride revenue also seems inaccurate considering the group collects vendor fees for its day festival on the grounds of Duke University’s East Campus. It’s also hard to imagine that the group has never, not once, collected a monetary or in-kind contribution or donation that wasn’t an exchange for advertising in its Pride Guide.

Several other questions remain unanswered — questions whose responsibility to ask will undoubtedly now fall on individual NC Pride contributors and supporters. Among them: What is the amount of NC Pride’s annual revenue? Where does that money go and how is it spent? Are there adequate checks and balances to ensure accurate accounting? Other than Short, who is in charge of the organization’s direction and finances? Who are the members of NC Pride’s board of directors and do they provide adequate oversight of Short’s direction? Most importantly, in the face of their tax-exempt revocation, will NC Pride now begin to act as a for-profit venture? At whose expense will that profit be made and who will benefit?

That NC Pride is an all-volunteer organization is of no consequence — scores of Carolina LGBT non-profits run on an all-volunteer basis have been transparent, compliant with IRS regulations and open to public scrutiny. Short’s excuses fall on deaf ears.

One cannot review the success of NC Pride’s events without also acknowledging Short’s years of hard work and dedication. Short’s place as an LGBT community leader in this state is one that he has earned. For the most part, Short has undertaken his responsibilities as NC Pride’s director with humility and grace. But, Short — and NC Pride’s board, if any — must be held responsible for his organization’s lack of transparency and lack of responsibility.

qnotes encourages Short to reach out to us and to use this medium as a chance to clear the air and answer tough but necessary questions — answers to which NC Pride has a legal and moral obligation to provide to its donors, supporters and tax-paying public. We encourage him to step up and solve NC Pride’s current situation in a way that is responsibly transparent and open.

It would be a shame to see NC Pride fall victim to a preventable tragedy. It is time for Short to open up, bring new leadership and partnerships to NC Pride’s table and ensure that the organization continues to perform the premier service it has offered this state since LGBT folks first took to the streets of Durham in 1981. : :

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Posted by Matt Comer

Matt Comer previously served as editor from October 2007 through August 2015 and as a staff writer afterward in 2016.

3 Replies to “NC Pride’s tax-exempt revocation demands more transparency”

  1. David Q. Cooke July 9, 2011 at 1:19 pm

    This editorial seems to be based on a narcissistic demand by Cormer for Short to affirm Cormer’s sense of Q-Notes’ importance. If there is specific, credible evidence that NC Pride has made false claims about its goals or intentions, then let’s see them in print.

  2. Mr. Cooke, it’s “Comer”, not “Cormer”.

  3. Mr. Cooke, the point is that no one has made any claims regarding the continued failure to document non-profit status with the IRS.
    A lie of omission is still a lie.

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