Lambda's Cathcart: About Our IRS 990s
and the $11M Bequest . . .
Before I drafted my post this morning about the latest IRS 990 filing for Lambda Legal, I sent my third email to their executive director, Kevin Cathcart. I had also attempted to get an email reply from their media reps, regarding their reported drop in revenue. It wasn't until mid-afternoon that I heard back from Kevin, saying he and his staff had not received any emails from me, except the one I sent as a courtesy, alerting them to my post. Yes, odd that the other emails didn't get through but the courtesy alert did.
This is a golden time to repeat what I suggested this morning. Lambda and other Gay Inc orgs should post an explanation on their sites along with their 990s, helping folks to understand the filings. Over at GLAAD's site, they issued a letter to members, when questions arose about figures in their newest IRS 990. Lambda should consider doing likewise.
We really need Gay Inc orgs taking a pro-active approach to their IRS 990s, from making them available on the day they are accepted from an accountant, to posting three years' worth on their sites, and issuing explanations about the filings.
Now that I got that housekeeping stuff out of the way, here is the full note I received from Kevin. Looking over his words, I find they are exactly the sort of statement I want Lambda to post on its governance and finance page.
I was surprised to get this email [blast alert] and read your post because neither I nor anyone in Lambda Legal's Media Relations Department received any email from you in the past week. If we had received your question, we would have answered it.
The explanation is quite simple. In 2008 Lambda Legal received an extraordinary bequest of $11,186,297. While the bequest will be paid to us over an eight year period, we are required by the Financial Accounting Standards Board (FASB) to recognize the full bequest as income in that year's IRS Form 990 and audit.
Thus our FY08 income was approximately 60% higher than our FY07 income, and our FY09 income, without an extraordinary bequest, showed a drop back to our more normal level. If you take this one bequest out of the picture, Lambda Legal's income increased from year to year, so your theory of a trend among LGBT organizations does not hold true for us.
Lambda Legal's FY10 financial information will be posted to our web site in March, as soon as our audit and tax filings for this fiscal year are complete. I agree that it would be wrong to have a bunker mentality about our IRS Form or our audit. Happily, we do not.
And to Kevin I say, thanks for the explanation.