Hold on to Your Wallet

Two organizations, GLAAD and the Democratic Victory PAC have been spending excessively on perks for their senior management.

If this sounds familiar, it is, remember the corruption scandal involving former NRA chief Wayne LaPierre.

First GLAAD:

A light rain fell at the Zurich airport one Sunday morning in January 2023 as Sarah Kate Ellis made her way from a seat in Delta’s most exclusive cabin to a waiting Mercedes. It was there to chauffeur her to the Swiss Alps, where she and her colleagues would stay at the Tivoli Lodge, a seven-bedroom chalet that cost nearly half a million dollars to rent for the week.

Ms. Ellis, who was en route to the World Economic Forum in Davos, doesn’t run a Wall Street bank or a high-flying tech start-up. She is the chief executive of the nonprofit organization GLAAD, one of the country’s leading L.G.B.T.Q. advocacy groups.

The group, which has an annual budget of roughly $30 million, paid for Ms. Ellis’s trip, as well as a day of skiing, according to internal documents reviewed by The New York Times and interviews with current and former employees and others with knowledge of GLAAD’s operations.

The trip was part of a pattern of lavish spending at GLAAD, much of it by Ms. Ellis, that may have violated the organization’s own policies as well as Internal Revenue Service rules.

………

When Ms. Ellis traveled for work, there were first-class flights, stays at the Waldorf Astoria and other luxury hotels and expensive car services. Not to mention a Cape Cod summer rental and nearly $20,000 to remodel her home office, which was outfitted with a chandelier, among other accouterments.

All of that is on top of Ms. Ellis’s annual pay package, which has the potential to stretch into the high six or low seven figures — a sum that would far exceed what her peers at many similarly sized organizations have earned.

Such perks, luxurious business travel and large pay packages might be commonplace at a for-profit company. But legal experts said they were inappropriate for a nonprofit organization with about 60 employees that, in exchange for being exempt from federal and state taxes, must ensure that executive pay is reasonable and aligned with the charity’s mission and the intent of donors.

And then the Democratic Victory PAC, which is somewhat less surprising, given that since Trump was elected in 2016, there have been a fair number of people who have made a career as the face of "The Resistance."

Just a note, that the non-profit space in the United States, and non-profit adjacent spaces like Democratic Victory PAC, are largely unpoliced.

As is noted in Phishing for Phools: The Economics of Manipulation and Deception, if fraud can occur, it is already happening.

Unless and until tax authorities start aggressively investigating non-profits, you need to be very careful donating money to charities.