Same Day Rhino Times and News & Record Civil Rights Museum Articles; Earl wants $500,000 per year with no strings

"Greensboro Mayor Nancy Vaughan dropped a bombshell on Monday, Nov. 17, and it started a war.

...Vaughan proposed that the City of Greensboro take over the operations and management of the museum, open up the financial records and make all of the museum’s board meetings open to the public.

Shortly before that press conference, the NAACP released the following statement: "...The museum was built for and empowered by the community and should remain in the hands of the community, and not the city of Greensboro.”

Last I heard, the mueum property
 remains in the hands of Skip Alston and Earl Jones
via Museum Landlord, LLC.

Alphonso McGlen, the president of the Greensboro chapter of the NAACP, ...said that Vaughan’s claims that the museum was in financial straights were not true.

“The museum is relatively stable,” he said.  He said the integrity of the museum should not be jeopardized by wresting control from the hands of those who founded it and built it.

...The museum has been the subject of much heated debate over the years and that was also the case last year when the civil rights museum sought and received a loan last year from the city for $1.5 million.  Of that $1.5 million, so far $1.25 million has been paid to the museum with the remainder of that money scheduled to be paid out in mid-2015.

...Matheny said one thing that should not happen is for the city to pump even more taxpayer money into a sinking enterprise and allow the museum to continue to be run the way it always has.

...Vaughan said that a particularly dire financial outlook for the museum helped spur her decision to have the city take over the museum...

“The reports we got from the development committee – money being raised for the gala and other things – were positive,” [Bruce] Davis said.  “Everything was doable.  It would be different if it were all gloom and doom.”

...Earl Jones, one of the founders of the museum, also said the financial picture for the civil rights museum was very good.  

...Jones added that, though the finances are good, the museum is going to request that the city give the museum $500,000 annually in the future.  

The preceding two sentences
appear to contradict each other.

He said that, just as the museum asks other public and private sources for funding, it is going to ask the city for the $500,000 in the next budget and request a like appropriation for years after that.

$500,000 per year, which according to the city, 
Earl and Skip will be able to recieve some of
as the owners of Museum Landlord, LLC.

...“What the city should be doing is what they are doing now in other places – making annual appropriations,” he said.

Why would the museum need $500,000 per year
if the finances were good?

...He also said that the mayor, in her effort to drum up support for a city takeover of the museum, has been spreading a great deal of misinformation about the state of the museum’s finances.

“She has been giving false and misleading information to the public,” Jones said."

"Museum’s debt close to $26 million"

On Oct. 14, then-civil rights museum director Lacy Ward Jr. delivered some sobering news about the museum’s finances to donors from years past.

“We have no operating reserve,” Ward told the 1960 Society, whose members gave money to the International Civil Rights Center & Museum in 2010.

“It’s at zero.”

Ward’s statement is the most recent — and the most specific — reflection of what city leaders have said in general terms this week:  The museum is broke — and almost $26 million in debt.

And without a takeover by the city, the museum is unlikely to survive.

[Lacy Ward's] firing prompted an uncharacteristically frank dialogue among civic leaders about the museum’s bleak financial position.

...On Wednesday, [Earl] Jones disputed Ward’s comment about the museum’s reserve fund running dry.  “We’ve got $150,000 in reserve,” Jones told the News & Record.

He added: “By any objective standard, the museum is extremely successful.”

But an auditor hand-picked by Jones and other board members — expanded this year from 15 to 25 — found evidence to the contrary.

An audit for 2013 provides a snapshot of the museum’s financial position, showing that as of Dec. 31, the museum:

• Owed creditors roughly $25.9 million...
• Had raised $272,950 in 2013 from contributions, special events and grants.

2014 “Contributions/Membership” expectations = $800,000

2014 “Special Event” expectations =  $370,000, and $825,000 in 2015.

2014 “Grant” expectations = $700,000

• Held about $36,800 for operating expenses.
• Had collected $378,500 from ticket sales.
• Had paid employees $442,000 in salaries.
• Held pledges for $82,646, payable within one year, and others totalling $5,500, payable in one to five years.

Walker Sanders, the executive director of the Community Foundation of Greater Greensboro, said Wednesday that he expects the museum to repay a $50,000 loan when it comes due on March 13.  The foundation loaned the money so the museum could hire an auditor — a condition of receiving the forgivable loan from the city last year.  Sanders said it was a loan, rather than a grant, “because we felt like that was something an organization should be able to pay for.”

...Jones said he blames the addition of Vaughan and Westmoreland on the museum’s board for this most recent public relations crisis.

“We never should have had them on the board,” he said."

If they had not been on the board, 
there would not be a board to be on.

Fiduciary Duties of Directors and Officers of Distressed Nonprofit Organizations

"[Non-Profit] Board members are legally required to be informed and active participants in corporate governance in acting to fulfill the nonprofit’s charitable mission.

...A person who has a relationship of trust or confidence with another is called a fiduciary. A fiduciary’s relationship with an organization is one-sided, meaning that the relationship is designed to meet only the needs of the organization and the fiduciary must act without regard to his or her own needs. ...They must be principally concerned about the performance of the nonprofit and that its interests are pursued faithfully.

...This relationship between board member and the organization is a legal one, and board members have an obligation to monitor and oversee not only the organization’s financial dealings, but its ongoing regulatory compliance program.

Legal Duties

...members should require management to provide sufficient information to make an independent decision. If board members find that the information is invalid or incomplete, they are expected to ask questions about it. Independent advice is required if the nonprofit is buying or selling significant assets, or is entering into a material contract.

...Failure to comply with fraud and abuse statutes, patient privacy regulations and other federal and state laws can expose a [non-profit] to significant criminal and civil monetary penalties...

Duty of loyalty: When acting on behalf of an organization, board members must set aside their own interests, whether professional or personal, or the interests of any other organization. Simply put, the nonprofit organization must come first. A board member cannot seize an opportunity for his or her own gain.

...Members of the organization may sue a trustee on the organization’s behalf because of a breach of duty in a type of lawsuit called a derivative action. Donors also may sue, alleging misuse of gifts or assets."


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