IRS Filings Lag: Group Has Not Filed Financial Reports Since ’05, Feds Say.

Cameron McWhirter, Atlanta Journal-Constitution, January 14, 2008

Southern Christian Leadership Conference officials say the civil rights group has raised more than $6 million in the past three years, including $3.3 million to build a new headquarters on Auburn Avenue.

But the 50-year-old organization has filed no financial reports with the Internal Revenue Service—required once a year under federal law—for almost three years, according to the IRS.

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Without the filings, the IRS and the public do not know how the SCLC has spent donations raised from some of Atlanta’s biggest corporations, including Georgia Power Co., Coca-Cola and Delta Air Lines.

The SCLC last filed a report in February 2005 for the tax period ending in June 2004, according to the IRS nonprofit hotline.

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Federal law requires tax-exempt organizations to file financial reports annually so the government and public can know how the organization is using its money, IRS spokesman Mark Green said.

Organizations that do not submit the filings are likely to be audited, Green said. “An organization could lose its exempt status,” he said.

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The SCLC has had tax problems in the recent past, including unpaid employee taxes totaling tens of thousands of dollars in 2004, when current SCLC President Charles Steele took over. Steele said the dispute had been resolved.

SCLC Executive Director Ron Woods said the organization was current in its tax reports—called Form 990s—when first asked about the financial reports. Later he acknowledged it was years behind.

Steele said last week that the SCLC would file the late documents within 45 days and make those reports available to the public. Under tax law, those documents should be available for public inspection year-round.

“In 45 days, you will have all the answers,” he said.

Steele declined to comment on his own salary, saying, “You will know in 45 days and you will be surprised at how little I make.”

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The SCLC’s unsigned 2005 tax return reported revenue of $787,359 and operating expenses of $436,384. The expense total did not include $169,173 listed elsewhere on the return as compensation for officers and directors. Wimbish said he could not explain why.

The filing reported the SCLC’s largest source of revenue and its largest expense was its magazine, which brought in $1.3 million but cost $1.4 million in sales commissions, contract labor, printing and other costs.

Steele said the organization—with about 20 staff members and consultants—now has an operating budget of between $1.2 million and $1.5 million, largely spent on utilities, salaries and benefits. He said he hopes to raise the budget within several years to $5 million annually.

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Georgia Power President Michael Garrett headed the fund-raising campaign for the new headquarters, which was presented to the SCLC debt-free.

The building contains first-floor retail space for the group to generate rental income. None of the space has been rented yet.

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In recent decades, the organization has lost influence, funding and membership. Infighting crippled the organization.

In 2003, animosity among board members erupted in lawsuits and resignations. At the SCLC’s 2004 convention, police were called when fights broke out among competing factions.

After more turmoil, Steele, a funeral director and former Alabama state senator, took over.

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