Money to popular nonprofit festivals may not be going to charity


A nonprofit organization that hosts a dozen festivals across Atlanta won't reveal details of who contributes to and benefits from the charity. It raises questions about whether The Georgia Foundation for Public Spaces truly provides financial assistance and scholarships to artists or puts the money into an affiliated for-profit company.

On city permit applications, the GFFPS is listed as the host organization for Festival on Ponce, Old Fourth Ward Park Arts Festival, Piedmont Park Arts Festival and others.

GFFPS President Patrick Dennis told CBS46 News in October, "the money the festivals make ... go into the nonprofit group that we have which gives scholarships and artist assistance."

But when CBS46 investigative reporter Jeff Chirico repeatedly asked to see documents detailing the group's finances, Dennis declined through his business partner Randall Fox.

"Just run your story," said Fox to Chirico over the phone.

Like other nonprofits, the GFFPS benefits by paying less in-city event permit and application fees and actively solicits tax deductible contributions from sponsors. In fact, the various festivals have over 100 sponsors and yet the group claimed in three annual reports to the IRS that it generated less than $50,000 a year.

"Given the size of the events that are being put on here and the number of sponsors that are contributing, it's hard to believe this organization is generating less than $50,000 in sponsorship revenue," said Greg Charleston, a financial management expert with Conway MacKenzie in Atlanta.

So where is the money going?

Some worry the GFFPS is simply a front to make money for the group's for-profit partner - the Atlanta Foundation for Public Spaces, which Dennis also leads as executive director.

The AFFPS is listed on city permit applications as the "professional event organizer" for festivals hosted by the nonprofit group, likely making the AFFPS the largest vendor of the nonprofit GFFPS.

"The IRS would see that and probably audit it immediately," Charleston said. "These two companies have the same officers. So how do they determine what revenue belongs to which company and which expenses belong to which company?"

Information can often be learned about a nonprofit's finances from the 990 forms it files with the IRS. However, since the GFFPS claims to collect such little revenue it doesn't have to reveal details of donations and expenses.

"It's not a good situation when you have an organization that lacks transparency," said Greg Frayser, a resident of Cabbagetown.

People living in that community and neighboring Reynoldstown protested the GFFPS's recent masquerade party inside the Krog Tunnel. Suspicious that the GFFPS-hosted event was a front to make money for its for-profit company, artists painted over the iconic artwork inside the tunnel hours before the party. A message on the tunnel wall read, "Krog is not for sale."

"How much is going back to the nonprofit and how much is going back into the pockets of people who run both of these entities?" Frayser said.

Neither Dennis nor Fox would agree to an interview.

It leaves artists, volunteers and sponsors with a lot of unanswered questions.

"Do they believe they're working for a charity, that the money is going to a charity? I'm guessing they do and they might be surprised to know they're giving their time to a for-profit organization, helping them make money on the event," Charleston said.

The director of the city's Office of Special Events, which issues permits for festivals, said her office verifies applicants' nonprofit status by checking their 990 filings but claimed the office isn't responsible for monitoring how groups spend their funds.

"Regarding the activity of the [GFFPS], the city is not the authority in this matter," wrote Ebony Barley in a statement to CBS46.

Mark Green, spokesman for the IRS office in Atlanta, would not confirm or deny whether the agency is investigating the GFFPS.

Copyright 2014 WGCL-TV (Meredith Corporation). All rights reserved.

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