CAN GLAAD SURVIVE? $2.5 MILLION LOSS 2007 – 2009 REFLECTS BOARD MISMANAGEMENT | Jive in the [415] Blog | Gay LGBT News Political Commentary

June 29, 2011


Los Angeles, CA: The Gay and Lesbian Alliance Against Defamation (GLAAD) is one of the most visible charitable organizations in the gay community. GLAAD produces star-studded award ceremonies in New York, Los Angeles, and San Francisco, annually. They monitor gay portrayals in television and film, and they call out television networks, production companies, and media publications, including newspapers and magazines, if they feel their deeds or actions slight, defame, or misrepresent the LGBT community.

Most recently GLAAD has been facilitating Tracy Morgan's introduction to members of our community, who have experienced becoming homeless due to family rejection as a result of one's sexuality, victims of gay bashing, and other transgressions, that have been caused by being LGBT.
According to IRS Form 990, filed with the IRS, GLAAD received $7 million dollars in contributions and grants in 2007, $14 million dollars in contributions and grants in 2008, and $5 million dollars in contributions and and grants in 2009. Figures for 2010 are not available. According to the audited Financial Statement for 2008, GLAAD received an $8 million dollar bequest from a donor, which is why the 2008 contributions are so large. After taking the donor's charitable trust out of the equation, GLAAD's contributions have been declining approximately $1 million dollars a year from 2007 - 2009.
GLAAD's income and expenses are recorded using the accrual method of accounting. Most organizations utilize this method, because you book transactions as they occur, which gives a more accurate income statement and balance sheet, than employing cash-basis accounting. One large drawback of accrual basis accounting exists when evaluating financial statements, because revenue is recorded when a transaction occurs, and not when the cash is collected. Therefore, you do not get a true reflection of whether you have enough cash to cover operating expenses., at any given time.
GLAAD has experienced a 29% reduction in contributions from 2007 to 2005. In 2007 GLAAD had revenue of $7M, expenses totalling $7.5, and lost $400K.
The charitable trust that bequeathed $8 million dollars to GLAAD in 2008, will be paid quarterly over an eight year period. This $8 million dollars in revenue is reflected in 2008, despite the remittances being paid over 8 years. If you subtract this income from GLAAD in 2008, add 1/8th of this income to donations and contributions of $6.1 million which totals $7.1 million in actual revenue, with expenses totalling $8.7 million, you will see how GLAAD lost $1.6 million in 2008. In 2007 and 2008 combined, GLAAD lost $2 million dollars.
In 2009 revenue was $5.1 million, while expenses totalled $6.6 million. If you add the actual revenue as outlined above (adding the $1.0M bequest), the loss was $500K. From 2007 through 2009, GLAAD has lost $2.5 million dollars.
In 2008 payroll costs were $4.2 million, or 60% of revenue. Rent, office expenses, advertising, IT, and travel, consumed another $2.7 million. For each dollar donated to GLAAD in 2008, 97% or 97 cents went to administrative costs and overhead. In 2009 payroll costs were $3.3 million, which represented 56% of revenue. Rent, office expenses, advertising, IT, and travel, consumed another $1.8 million. The $5.1 million in contributions, plus the $1 million bequest, represents 84% of income, or 84 cents of each dollar went to salaries and overhead.
There are additional expenses related to outside services, where GLAAD contracts with different vendors to supply goods and services, including the GLAAD Awards, that have not been included in the above figures. Are people comfortable making donations to a charitable organization that gobbles between 84% and 97% or more, toward administrative costs and salaries?

The real question to be answered, is GLAAD an organization that will survive current economic struggles? Does GLAAD have the ability to continue functioning as a business and charitable entity beyond the next year? Are there any factors that may put the company's status as a going concern in doubt? It is incumbent upon the accounting firm, and the GLAAD Board, to disclose in their audited financial statements for 2010, whether material uncertainties exist as to whether GLAAD can continue to operate. After examining the financial information available publicly, I would have to conclude that material uncertainties are present, particularly in light of the negative operating results over the past 3 years.
As hard as it may be, forget about the "Barrios Coronado AT&T gate" scandal right now. As troubling as that may be, the financial mismanagement of GLAAD, by the leadership and Board, over the last 4+ years, is what is destroying this once noble organization.
Whether there are 31 Board members (2008), or 36 Board members (2009), or the 22 Board members currently reflected on the GLAAD website, who should be held responsible for the mismanagement of contributions? The Board has a fiduciary responsibility which they have abrogated completely. I have to make clear, I am not accusing anyone of misappropriating funds, or doing anything illegal. I am pointing out that the Board of Directors are the only voting members assigned with the task of supervising revenues and expenditures, and they have been asleep at the wheel. If things keep going they way they are, GLAAD will cease to exist.
Raise the alarm! The current Board must resign! Find an entirely new Board immediately! Look at the organization from top to bottom, and identify a way to continue the mission of the organization. Otherwise, without drastic action, it will be adios cuidad GLAAD.
I started looking at the finances of GLAAD when the first evidence of trouble turned up. I emailed Rich Ferraro on June 15th , with a list of 24 questions, which he failed to respond to . The questions I asked were wide ranging, and primarily related to finances. I asked about the employment contract, and severance agreements, related to Jarret Barrios employment. I asked for explanations of the large expenditures related to outside services. I asked if there was a travel policy for employees of GLAAD, related to the large expenditures for travel. I asked about the AT&T donation, and subsequent merger endorsement. I asked what the conflict of interest policy contains for GLAAD Board members, and also asked how the policy is monitored and enforced.
I never received a response to my inquiry. On June 17th I sent a second request with the same questions. This was addressed to GLAAD spokesman Rich Ferraro, and the President Jarrett Barrios. My email was ignored again.
In order to maintain GLAAD's status as a non-profit, tax-exempt 501(c) 3 status, they must make their financial statements, and financial information, and conflict of interest policies, available upon written request. Failure to comply can result in the organization being audited by the IRS, and penalized. If my emailed questions are not sufficient, and do not qualify as a written request, I can be more formal and fax, mail, email or employ a carrier pigeon, to relay my requests. I truly am not interested in hurting GLAAD, but hope that through exposing the dire finances of the organization, that positive change will occur. Remember, without drastic action, it will be adios cuidad GLAAD, and that would be very sad indeed.

Written and posted by Haightmale on the blog " Tie-dyed Jive in the (415)"

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