CHARITY CLAIMS EXTRA CREDIT HALF OF DONATIONS FROM OTHER GIVERS.Byline: Beth Barrett Staff Writer
The McCormick Tribune Foundation, the charitable arm associated with the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Times' parent company, has stirred controversy in Los Angeles' philanthropic circles by claiming it contributed $6.1 million to area charities in 2004 although at least half of the money came from other local donors.
Some nonprofits speak highly of the program that increases their revenue but such leading philanthropists as former Mayor Richard Riordan Richard J. Riordan (born May 1, 1930) is a Republican politician from California, U.S. who served as the California Secretary of Education from 2003–2005 and as Mayor of Los Angeles from 1993–2001. Riordan ran for Governor of California unsuccessfully in 2002. are highly critical. And several nonprofits have dropped out of the program, saying they end up doing most of the work in partnered fundraising events and are uncomfortable with the way the foundation uses an unusual but legal means of reporting its contributions.
In its simplest form, the foundation requires nonprofits to give it a substantial check representing between 40 and 80 percent of the net contributions from local donors at fundraisers. Afterward, the foundation returns the money plus its own donation, but the Chicago-based foundation publicly reports contributing the whole amount.
``We're not doing it this year,'' said Wendy Free, executive director of the I Have a Dream Foundation - Los Angeles, a nonprofit that provides after-school and summer enrichment opportunities for first-grade classes
in the region. ``Some of our donors were confused; they thought they were giving money to the Tribune foundation.''
Riordan said the foundation paints a misleading and inflated picture of its charitable activities since the Tribune Co., in a merger with Times Mirror Co., took over the Los Angeles Times Los Angeles Times
Morning daily newspaper. Established in 1881, it was purchased and incorporated in 1884 by Harrison Gray Otis (1837–1917) under The Times-Mirror Co. (the hyphen was later dropped from the name). in June 2000 and promised to take an active role in the community.
``My gripe gripe
To have sharp pains in the bowels.
1. gripes Sharp, spasmodic pains in the bowels.
2. A firm hold; a grasp. is, they're not saying what they're giving,'' said Riordan, who sits on the board of LA's BEST (Better Educated Students for Tomorrow), a nonprofit that is staying with the foundation program because in the last two years it has realized a $214,500 net gain over the $502,500 in donor money that was raised.
``Here's what they do: they take credit for donor (funds) plus what they put in. That's where the dishonesty comes in. It is a violation of basic integrity of taking credit for money that they have not donated.''
Catherine Brown, director of the communities program for the McCormick Tribune Foundation, defended the way the foundation reports its grants, noting the Internal Revenue Service agrees that local donor dollars can be accounted for as part of the overall contribution by the foundation, which in 2003 petitioned the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. and officially became a public charity.
``We consider those dollars ours,'' Brown said.
She said no nonprofit is obligated ob·li·gate
tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates
1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force.
2. To cause to be grateful or indebted; oblige. to participate in fundraising and all those that have participated in the program in Los Angeles have gained revenue from it. She said the foundation brings value to the fundraising partnership events, including visibility, sharing of some administrative costs administrative costs,
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. , and usually ``some nice press involvement.''
``We do it to get more money into each individual community than otherwise would be there,'' Brown said.
The foundation was established in 1955 on the death of the Chicago Tribune's editor and publisher, Col. Robert R. McCormick Robert Rutherford McCormick (July 30, 1880 – April 1, 1955) was a Chicago newspaper baron and owner of the Chicago Tribune. A leading isolationist, opponent of United States entry into World War II and of the increase in Federal power brought about by the New Deal, , and has an endowment of approximately $1.5 billion. It has partnerships across the country, including one with the Denver Post, the flagship of the MediaNews Group Not to be confused with Media General, an unrelated newspaper and TV group.
MediaNews Group, based in Denver, Colorado, is one of the largest newspaper companies in the United States. of newspapers that includes the Daily News. It also has partnerships with the Los Angeles Times and KTLA KTLA KCBS TV in Los Angeles , both owned by the Tribune Co., the Los Angeles Angels and the Mighty Ducks
Mighty Ducks is a half-hour Disney animated series aired on ABC and The Disney Afternoon in the fall of 1996. Twenty-six episodes total were produced. .
The foundation raised more than $30 million through fundraising partnerships, and gave out more than $57.5 million in grants nationwide in 2004, including the local donor dollars.
The foundation reported making community grants of $6.1 million in Los Angeles in 2004, with a foundation official saying the percentage of donor dollars is roughly the same in each community.
It also reported making $10.6 million in donations in Denver, where the Tribune Co. owns a television station, and nearly $14 million in Chicago. It also donated $35.3 million, much of it in the Chicago area, from its general fund, which is not part of the fundraising program.
Trent Stamp, executive director of New Jersey-based Charity Navigator Charity Navigator is an independent, non-profit organization that evaluates American charities. Their stated goal is "to advance a more efficient and responsive philanthropic marketplace by evaluating the financial health of America's largest charities. , a nonprofit watchdog of charities, said the mechanism used by McCormick Tribune Foundation is unusual, and that there could be an appearance of using local fundraising to inflate the organization's charitable claims.
``Certainly it's not standard operating procedure standard operating procedure Medtalk A technique, method or therapy performed 'by the book,' using a standard protocol meeting internally or externally defined criteria; a formal, written procedure that describes how specific lab operations are to be performed. within the foundation or the charitable world,'' Stamp said. ``It's probably not illegal if they document it in the tax record, but it doesn't pass the smell test at all.''
``You have an organization that appears - if true - to be double (counting) the amount of money they give to the nonprofit. You have, in effect, sort of a money-laundering scheme.''
Despite Riordan's criticisms, Andrew Frances, LA's BEST's senior director of communications Director of Communications is a position in the private and public sectors. The Director of Communications is responsible for managing and directing an organization's internal and external communications. , said the nonprofit considers the relationship with the foundation to be ``very fruitful and very respectful,'' and intends to continue it. LA's BEST is a nonprofit aimed at improving educational opportunities for elementary school elementary school: see school. children mainly within the city.
Free, with I Have a Dream, said the fundraisers involved ``extra work,'' and there was always a certain risk the donors' money that went to the foundation wouldn't be recouped through a grant - though in reality that never occurred.
``We always discussed why give money to a foundation, and whether it was worth the risk or not,'' she said.
Carol M. Dedrich, vice president of development, special events & communications for the Fulfillment Fund, a nonprofit that helps Los Angeles Unified high school students graduate and continue their education, said she passed on partnering with the foundation more than two years ago because of lack of staff for the proposed fundraising events.
John Culpepper John Culpepper (1761 - 1841) was a Congressional Representative from North Carolina; born near Wadesboro, Anson County, N.C., in 1761; attended the public schools; became a minister in the Baptist Church; presented credentials as a Federalist Member-elect to the Tenth Congress and , director of Friends of Cabrillo Marine Aquarium Cabrillo Marine Aquarium is an aquarium in San Pedro, California, a community within Los Angeles. It concentrates on the marine life of Southern California. In addition to its displays, it also offers school and group programs. in San Pedro, said his nonprofit support group isn't partnering with the foundation this year, a decision made by mutual agreement.
``There is exposure,'' he said. ``Everything you send them sits in the bank ... they get all this interest, and then they give you the grant back.
``They're not legally obligated to give you the grant, but it ends up happening. You work in partnership with a certain amount of trust you'll get the grant.''
The aquarium's last black-tie gala resulted in 75 percent of the $77,000 in mainly ticket sales, or $57,000, being remitted to the foundation. He said a subsequent grant was applied for with the understanding the aquarium stood to get a grant worth $1.40 for every $1 it send the foundation.
The result was an $81,000 grant, for a net profit of $24,000 to the nonprofit.
``We sent them $57,000 and we got back $81,000. It's a grant application, but you take on faith they'll be good for it.''
Beth Barrett, (818) 713-3731