Zurik: Nonprofit's parties for a cause actually lost money

Published: Nov. 19, 2014 at 7:29 PM CST|Updated: Nov. 20, 2014 at 3:15 AM CST
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A flyer for the 2012 fundraiser
A flyer for the 2012 fundraiser
A flyer for the 2013 fundraiser
A flyer for the 2013 fundraiser
CPA Patrick Lynch, examining documents during an interview
CPA Patrick Lynch, examining documents during an interview

NEW ORLEANS (WVUE) - The invitation said a $75 ticket would go to help the homeless and disabled. But the reality is the money from those tickets only went to fund a big party that, records show, basically had to be supplemented with taxpayer dollars. How does the non-profit Alternatives Living justify a high-dollar costume ball?

"We consider ourselves servants of people, so we try to hire like-minded people like that," said Alternatives Living chief financial officer Rickey Roberson in an early November interview. "And so, our clients have so many needs, what we try to do is help them in any way that we can."

So in October 2011, the officers of Alternatives Living started what became an annual tradition - a costume ball benefit cruise.

"We're working social services, so we would give all of our money away, trying to help our clients," Roberson told us. "So that's when we decided that we'd try to come up with a fundraiser, something to offset some of the costs."

In reality, this fundraiser didn't really offset anything.

"Is that effective fundraising? I don't believe so," said Patrick Lynch, a certified public accountant and managing partner of Rogers, Lynch & Associates, LLC.

In 2013, Alternatives Living threw the party on Saturday, October 19. Tickets cost $75. Guests boarded the Creole Queen riverboat and cruised for four hours, with hors d'oeuvres and an open bar. For music they hired Naydja Cojoe - she cost $1,500. That's nothing compared to renting the boat - $10,000.

Pictures from the night show it was a big hit. But in reality, it wasn't a big hit for the Alternatives Living bank account. According to the nonprofit's own records, it only cleared $292.80 on the event.

But those numbers don't tell the whole story. That's because they don't include the costs for hotel rooms that the officers charged for the night of the event. Credit card records show they reserved two rooms at the downtown Hilton Hotel. One cost $367.94, the other $432.27. They also paid $41 for valet parking and had another $3.39 charge, for a grand total of $844.60.

So if you subtract that from what the nonprofit reports it made, it actually lost money on the fundraiser: $558.63.

"I ask, is that not a personal party cloaked in fundraising garb?" Lynch said.

The officers defend their fundraiser. When we raised the subject with Rickey Roberson, he acknowledged the loss but told us it was just "a couple hundred, or something like that."

"In our mind, you know, it's a fun activity," said Ada Craige-Roberson, the firm's program director and the CFO's wife. "People like to dress up during Halloween. You know, we set the price for the tickets to pay for the venue. And we were hoping that, you know, any extra money like for the raffle or the auction items - that would be the money to go into the fund."

In the end, records show more money went out then went in. "They're in the red on fundraising," Lynch said after reviewing the company's records for FOX 8.

The 2012 fundraiser on the Creole Queen had Kermit Ruffins perform; he cost $3,000. Tax documents submitted to the IRS show the nonprofit lost $4,049 on that fundraiser. It's unclear if that figures in the two hotel rooms we found on the same night that cost $669.

"I don't remember that," Roberson said when we told him our findings.

All totaled, Alternatives Living's records show they lost as much as $4843.76 for the three fundraisers.

But there's more. According to the records, Rickey Roberson and Ada Craige-Roberson chipped in their own money. The program listed them as gold sponsors in 2011 and 2012 - records show they donated $500.

The nonprofit also reports receiving separate donations from the Open Door Ministries - $500 in 2011, $150 in 2012 and, in 2013 another $150. The officers of Open Door Ministries include Rickey Roberson, Ada Craige-Roberson and Alternatives Living's executive director, Melanie Duplechain. And we couldn't determine from the nonprofit's records whether those checks actually were deposited.

So where did the checks go? "That's a good question," Lynch told us. "I couldn't trace any of them."

We asked the nonprofit by email to show us a record of those checks being deposited into the bank account. They never responded.

In our interview, we did ask why all of the money taken in for the fundraiser didn't appear in their checking account.

"Let's say, if somebody decided that they were going to, at the last minute, pay like $75 for the ticket or whatever," Craige-Roberson said. "Because we keep some petty cash in the office, whatever, it could have just gone in the fund in that way, and not have, like, gone into the bank."

Over the years, records show many large withdrawals of cash from their accounts, sometimes from petty cash. Records show cash was used for supplies, luncheons, other miscellaneous expenditures, and even a $17,500 loan.

According to their website, "All proceeds from this fundraiser will go directly to support…. chronically homeless and at-risk individuals and families living with a variety of disabilities." But according to the records, the proceeds only helped pay for the event. And taxpayers essentially funded the rest – the firm is funded by federal money.

Alternatives Living didn't have a fundraiser this year. It's a nonprofit that owes more than $1 million in unpaid payroll taxes and penalties - a nonprofit that is fully funded by taxpayers.

The state's legislative auditor is investigating Alternatives Living. The nonprofit's officers say they're working with the IRS to pay off their tax bill.

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