Originally published on Forbes.com June 14, 2013
Do you think it is Time To Audit The IRS ? If so, Tea Party Patriots, Inc. wants you on the West Lawn of the US Capitol on June 19th from Noon to 2:00 PM. I listened in on the planning call last night with over 7,000 people. There was some good practical advice. Somebody wanted an address for the GPS. They explained that it is between the Capitol Building and the Washington Monument, so it is not too hard to find. Nonetheless, don’t even think about trying to park anywhere nearby. Park your car at a Metro stop, which could be as far out as Greenbelt, MD and you’ll be able to get there in 20 minutes. They said to get off at the Smithsonian.
The discussion of issues on the call was a little random. Besides the concern about targeting, there was quite a few comments on illegal immigration and Obamacare. Gutting the military and making life hard on Christians in the military were also mentioned. The message was that this is the most important rally that Tea Party Patriots have ever put on. This video which is on the website gives you a sense of the spirit of the call
The thing is all this persecution of the Tea Party is because “they” are afraid. Who are “they”? As far as I could tell it is the unelected bureaucrats of the out of control government and the “institutional left”. All those illegal immigrants who will be getting amnesty will be trained by the “institutional left” – groups like Acorn.
The Other Theme Of The Call
Besides getting people stoked to attend the rally, the other goal of the call was to raise $27,000. We were told that if we pressed 7 efficient, but friendly, operators would quickly take our donations and we would be back on the call without missing anything. At the beginning of the call I heard mention of a few folks like Joe from Idaho who gave $105. Halfway through the call, they told us that there were 7,000 people on the call who had not yet pressed 7. I finally broke down at that point, but my plan was to ask a question of the friendly, efficient operator. I never got to ask the question, but before I tell you what it is I’ll give you a little background.
What Is Tea Party Patriots Inc ?
Tea Party Patriots, Inc. is not the entire Tea Party movement. I know enough people who hold strong Tea Party type views to be pretty confident that the movement has a strong populist base. To be clear, I will refer to Tea Party Patriots, Inc as Inc. I actually had just a little bit of trouble getting information about Inc. I understood Inc was a 501(c)(4) organization, which means it is required to file Form 990. I can almost always find an organization’s Form 990 on guidestar.org. There were several local Tea Party Patriot groups, like Tea Party Patriots of Southern New Jersey, but not Inc., which does in some ways seem like the mother ship, although I think the local groups are independent.
Inc.’s website does allow for media inquiries so I fired one off asking to see the 990. Here was the initial response
Thank you for your inquiry. Find an article about how Tea Party Patriots spends the donations we receive at:
http://support.teapartypatriots.org/customer/portal/articles/751001-tea-party-patriots-spending-2012
Thank you for supporting Tea Party Patriots and the movement to restore fiscal responsibility, constitutionally-limited government and free-market principles!If you require something more specific, please let us know. Thanks!
That was a start anyway. It is two pie charts showing categories of expenditures. The second pie chart used a net of fundraising number as the denominator. I sent a follow up request and did some more hunting. I found that Stephanie Mencimer has written quite a bit about Inc. and I tweeted her. She sent me a link to the 990 for the year ended 5/31/2011. I have to thank her for her help, but meaning no disrespect, Ms. Mencimer writes for Mother Jones. Talk about the institutional left. Here is how she is described:
Stephanie works in Mother Jones‘ Washington bureau. A Utah native and graduate of a crappy public university not worth mentioning, she has spent the last year hanging out with angry white people who occasionally don tricorner hats and come to lunch meetings heavily armed.
Gee. And people call me snarky.
Thankfully, after some clarification of exactly what I was looking for I received an e-mail from Jameson Cunningham, an account executive, with Shirley & Banister Public Affairs. The e-mail included a copy of the Form 990 for the year ended May 31, 2012.
What Does Inc.’s 990 Tell Us ?
According to the 990 which was dated 4/1/2013, Tea Party Patriots, Inc.’s (Inc) 501(c)(4) application was still pending. That is one of the things they and others are aggravated about. (As far as the 4/1/2013 goes, a 990 for a May 31 year-end with extension would be due on April 15 of the following year.) Extensions for 990s are pretty routine.
For the fiscal year Inc. raised $20,238,287. It may be building reserves as its net worth increased from $1,465,024 to $3,253,536. Most of the $3,937,909 in assets is cash, although there is $650,284 in notes and loans receivable (up from $93,000). The 990 breaks down the $17,660,824 in functional expenses among program services – $5,903,210, management and general $3,149,975 and fund raising $8,607,639. For whatever that is worth, it does not appear to match the pie charts on the website. On line 26 of Page 10 there is a breakdown of “joint costs” of combined educational campaigns and fundraising solicitation. I am really embarrassed. I should probably understand that a little better than I do. One more project, I will have to get to.
On Page 2 we learn that about the mission
The impetus for the Tea Party movement is excessive government spending and taxation. Our mission is to attract, educate, organize, and mobilize our fellow citizens to secure public policy consistent with our three core values of fiscal responsibility, constitutionally limited government, and free markets. These core values are derived from the Declaration of Independence, the Constitution of the United States of America, and the Bill of Rights as explained in the Federalist Papers.
You have to go to a futher page to get the whole thing.
We learn on Page 3 that Inc. did not have audited financial statements prepared, but that it was included in somebody else’s audited financial statements. I am glad I am just a tax blogger and not an investigative reporter, so I am not absolutely obligated to look into that. It would be interesting to know who it was that included Inc. in consolidated financial statements.
We learn that there are 18 employees and that the two most highly compensated are Mark Meckler and Jennifer Martin who each had salaries of $192,010 for their 60 hour weeks. Those are not enormous salaries, but they are pretty good for a not-for-profit. It is more than just about anybody makes working for the IRS, but the IRS is reputed to give you a better work life balance and a good pension.
The five highest paid independent contractors are Integram, Southwest Publishing & Mailing, The Richard Norman Company, MDS Communications and Big Eye Direct. The are listed as direct mail, fundraising and telemarketing and each received between $1,269,283 and $2,577,541.
Schedule B is somewhat supportive of Inc. relying on grassroots support. It is a schedule of individual contributions, although identities are not disclosed in the public copy. There are only three six-figure contributions and the largest is $200,000. So there does not appear to be a reliance on large donations.
Schedule G shows how well the fundraising organizations do. Richard Norman appears to be the best raising $15,956,311 and keeping only $1,781,772 for itself. Strategic Fundraising raised $1,662,552 of which it kept $1,405,109. MDS Communications raised $1,199,816. It kept most of it. The net to Inc. was only $33,044. If I had gotten through when I pressed 7, that is what I intended to ask about. The telemarketing companies do seem to hang on to an unseemly amount of the contributions that they collect. I think if you are a Tea Party supporter and you get a call, you should probably thank them for the reminder and then mail a check to your local Tea Party organization. Just saying.
Inc. spreads some money to to local groups, but not very much. According to Schedule I, Atlanta Tea Pary LLC received $19.500. Illinois Tea Party received $35,000 and another $35,000 went to Moore TEA Citizens.
We learn in Part III of Schedule J that
The CEO of the organization frequently travels to multiple destinations in a week. Due to the volume of travel, the board allows the CEO to travel first class on domestic flights. Oftentimes, first class travel is a result of automatic upgrades due to airline loyalty programs.
At one of our CCR partner retreats, we had a consultant tell us that we should fly first class because we would be more likely to meet the type of people we were interested in meeting. Of course, we were gunning more the 1% than the grassroots. That is one of those suggestions the managing partner never followed through on it – at least when it came to me.
We also learn that:
The organization does not make its governing documents, conflict of interest policy or financial statements available to the public at this time.
If you are curious, I suppose you could ask.
More To Look At
Apparently most of the notes receivable balance is due from Tea Party Patriots Foundation, a 501(c)(3) organization. I’ll try to get to that, but no promises.
Who Put All This Together
The 990 was prepared by Capin Crouse LLP and signed by David C. Moja.
Since 1972, CapinCrouse has been serving not-for-profit entities including megachurches, institutions of higher education and secondary schools, and international missions agencies by providing a full range of audit, review, tax and advisory services
Conclusion
I wish I could make the rally, but I don’t think I’ll be able to. Mainly because I am too cheap. As far as all that financial stuff on the 990 goes, why don’t you draw your own conclusion ? Share it in the comments section.
You can follow me on twitter @peterreillycpa.