Wow. Freedom Concerts are a scam? That’s the claim made by Conservative blogger Debbie Schlussel here
Even in the most positive light (if the expenses were not related to Hannity himself), I think he had an obligation to find out why less than 5% of the money raised was actually going for the intended charitable purpose.
Now I understand why Hannity went on and on talking about how he doesn’t take anything for his participation in the concerts on the radio show last week.
You read, you decide..
I looked over the 2006 tax return. She’s an attorney, so she isn’t going to assert things recklessly.
My college degree was in accounting, but I’m not a CPA – but her analysis looks right to me. They raised about $10 million of which almost 60% went for “program services” – meaning expenses related to running the organization, not grants. They basically rented a mailing list and spent over $3 million on postage and printing, and hired fund raising consultants.. They have $175,000 worth of furniture, and paid staff that are paid well. Less than $400,000 of the $10 million went for scholarships and grants to injured soldiers. $800,000+ went for salaries. They paid $68,000 in interest which makes no sense, since they are sitting on a fund for future scholarships with $11 million in assets, half of which was sitting in non-interest bearing accounts…
Sheesh….
That, of course, assumes that the tax return is real… which, given how easy it is to pull up a blank 1040, is hardly a given. “She’s an attorney, so she isn’t going to assert things recklessly.” Ha, apparently you don’t read much Debbie Schlussel. Just because she may act professional in a court of law doesn’t mean she isn’t going to go off unhinged (as she far too often does) when she’s not at work.
Posting a modified or fake tax return would be “malice” – an intentional act. If she misunderstood what the return said, then you’re in safer territory if someone took you to court for libel/slander. The bar is pretty high for a public personality like Hannity.
I have never read her stuff and she does come off as not fact checking very well. She assumes the travel expenses were related to Hannity. Based on their response, I think the Freedom concerts are showing up as revenue net of expenses – that the Foundation is a recipient of the net proceeds, not the event organizer. In other words, the money you spent on the ticket for the concert is not tax-deductible because the event is not put on by the Foundation and only the proceeds show up on their books.
But they are also shading the facts – “program expenses” they imply are expenses related to helping the veterans and their other functions – renting a mailing list and spending $3 million on it with a charity that has gross income of $10 million says they are not an effective fund raiser
The other thing she misses or didn’t understand is the excess revenue – the difference between the amount they spent this year and the amount they raised is being added to a war chest for future scholarships – but the return I looked at in detail showed them sitting on $5 million in cash in a non-interest bearing accounts, which seems inappropriate and too tempting to just spend on more fund raising mailings hoping to generate more revenue….
What they are trying to do is a huge job – there are a -lot- of veterans from Iraq and Afghanistan with very serious injuries. Spreading $390,000 over them really means that the amount they distribute is not going very far. Even if they were efficient as a charity, that amount of money doesn’t go very far when spread over 100,000 people.
If you want to see the originals, go here:
http://dynamodata.fdncenter.org/990s/990search/esearch.php
and enter 541411430 in the EIN
The 2008 return looks better than the 2006 one – but not by much. The IRS 990 form seems to be asking more pointed questions trying to probe for 501(c)(3) organizations that are there to benefit the people who run them, not the stated purpose of the charity.
The form has a clear place to list “events” run by the organization with a breakdown of the expenses of the event – they list no events, which confirms my belief that Hannity’s freedom tour events are only showing up on these forms as net contributions. That does raise the issue of what entity is reporting that income to the IRS. The freedom concert tour page FAQ doesn’t mention anything about the ticket price being tax-deductible.
Schlussel seems to assume that the Freedom Concerts are primarily a way to make money for charity. I’ve never heard him say that. He does the concerts because they’re terrific.. kind of like a giant Pep Rally for America, only with Skynard in place of the High School Band. While he’s at it, he raises money for a charity he likes. If Schlussel want to raise money more efficiently, maybe she should.
Is the Freedom Alliance handling its money well? I don’t know. But since Schlussel is wrong about the purpose of the concerts and she’s wrong about the “war chest,” I’ll reserve judgment till I have more information. She’s right about the Peacekeepers, though.
Let me help you out.
https://freedomconcerts.com/
“Since 2003, over $10 million has been raised for the Freedom Alliance Scholarship Fund through the Freedom Concerts and generous donations from the Sean Hannity Show and its listeners. The Scholarship Fund is designated for the education of children of U.S. service members who have been killed or 100% permanently disabled in an operational mission or training accident. All net proceeds from ticket sales (after musical talent, production, promotion and venue expenses) are donated to the Scholarship Fund, aiding greatly in this effort to assist hundreds of families who have lost their loved ones while they were protecting and defending our nation and our freedoms. ”
The biggest misunderstanding she seems to have is that Hannity’s efforts are going into the scholarship fund only (if the above is accurate). The concert proceeds are not going to give grants to soldiers or the other activities of the Freedom Alliance..
The bottom line after looking into this – the “Freedom Tour” is run by Clear Channel as a for profit event. Your ticket is not tax deductible.
Clear Channel (aka Premiere Speakers) contributes some portion of the revenue to the Freedom Alliance, and Clear Channel gets the tax deduction.
Now I’m not so sure. Despite the fact that Glenn Beck is a speaker for Premiere Speakers (and Bob Costas in the past), and the FreedomTours domain is owned by them, and they the merchandising business, nothing on the web site indicates a Clear Channel ownership interest. Which brings us back to the question of who is actually running the concerts…