Charlotte LGBT center operated at $42,000 deficit in 2013

Charlotte Lesbian & Gay Fund says center lacks 'long-term viability'

CHARLOTTE, N.C. — The latest federal tax filings released by the LGBT Community Center of Charlotte show it operated at a significant deficit last year, spending nearly all of its revenue on occupancy expenses alone. At the same time, the group’s single-largest remaining donor has said the center lacks “long-term viability.”

The financial document — known as a Form 990, a tax return non-profit groups are required to file with the IRS — was disclosed to qnotes on Thursday as the newspaper investigated claims of alleged questionable spending by the center’s most recent former board chair.

The tax filing shows the center raised only $51,802 in support while racking up operating expenses of $93,925. That left the center at a deficit of $42,123. More than 90 percent of its revenue — $47,059 — was spent on occupancy expenses alone.

Other expenses, including more than $28,000 in salary and contract labor expenses, ate away at a cash reserve of $43,730 at the beginning of 2013, leaving only $10,476 at the end.

The center has come under scrutiny for nearly a year for its financial mismanagement, fundraising, transparency and accountability problems. A series of community town halls and meetings beginning last December were held to address some of those concerns.

Among them had been the center’s increasingly high occupancy rates in the face of lagging fundraising. Occupancy had accounted for an average of 50 percent of all its expenses from 2002-2012.

Former center leader Roberta Dunn had defended the center’s budgeting priorities and the group’s January 2013 move to a 4,568 square-feet facility on N. Davidson St. Dunn said the new location – which current board members are leaving at the end of December — was cheaper than the center’s former space at the NC Music Factory in Uptown. Despite the cheaper rate, the center still paid out 50 percent of its total expenses in occupancy fees. In 2012, it spent $41,580 on occupancy at the NC Music Factory, accounting for 49 percent of its total expenses that year.

The full extent of the center’s financial problems wasn’t revealed until February, when Dunn announced the group had just $6,000 on hand and would be forced to close at the end of that month. A few fundraising events and donor appeals sustained the group through that critical deadline.

In May, the center considered a last-ditch effort for an influx of cash, considering a proposal to request up to $25,000 in assistance from the Mecklenburg County Board of Commissioners. That proposal, apparently, was never acted on.

Later that month it was revealed the center had failed to pay its sole employee on time and owed at least $7,000 in outstanding payroll taxes to the state and federal governments. Additionally, the center said it had just $600 on hand at the time. The news resulted in the resignation of Dunn as chair.

In June, the center received conditional support of $3,000 from the Charlotte Lesbian & Gay Fund, which said it would grant the remainder of the center’s total $19,950 grant if it met certain goals and benchmarks, including a strategic plan, board growth and financial stability.

The fund, though, has decided not to disburse the center’s remaining $16,950.

Fund vice chair Steve Bentley confirmed his groups decision to qnotes on Thursday evening.

- - - advertisement - - -

‘Not positioned for long-term viability’

As qnotes was going to press with its story Thursday evening, the Charlotte Lesbian & Gay Fund dispatched a letter explaining the funding decision to their stakeholders and donors.

“Although we have been extremely impressed with the energy and hard work the most recent Community Center board members have put forward, it is increasingly clear that as an organization, they are not positioned for long-term viability,” fund chair Jeremiah Nelson wrote to supporters.

Nelson said the fund had “specific areas of concern” for the center, including “a lack of clarity by the Community Center regarding their role and purpose in the community and a lack of planning for short-term fundraising.”

Nelson added: “Unfortunately, at this time, we believe that the Community Center doesn’t have a clear and viable plan for sustaining itself in the future. We take our responsibility as stewards of your investment in the Charlotte community through the Charlotte Lesbian and Gay Fund very seriously and could not in good conscience accept that level of risk with these funds.”

The fund will roll the remaining $16,950 back into its 2015 grant-making pool.

Current center chair Jud Gee told qnotes Thursday that the center board had made progress toward several of the fund’s goals for the group.

“I believe we met the metrics of the fund, I’d say about 95 percent of it,” Gee said. “We didn’t have enough time to really formulate a game plan for all of our fundraising other than some grants and things of that nature.”

Still, Gee said the group had tough decisions to make.

“We are meeting as a board tonight to discuss our future, if there is any,” Gee said Thursday afternoon. “I’m ready to get back to my life, so I probably will step down, though that’s not imminent. A lot of progress has been made by a really good team of people. Things were really starting to work smoothly.”

Gee added: “We had high hopes that the fund would give us the grant, but that didn’t occur. I have a feeling the center may shutter.”

- - - advertisement - - -

Posted by Matt Comer

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