Public Watchdog.org

After the Taste: The Culture Of Secrecy Continues – Part 2

09.05.08

Like our previous pieces on the Taste of Park Ridge – both the event and the private not-for-profit corporation (“NFP”), Taste of Park Ridge, Inc. (“Taste, Inc.”) – our post “After the Taste: The Culture Of Secrecy Continues” (September 3) got no responses that could clearly be identified with any officer or director of Taste, Inc.

We did receive a few comments, however, which suggest some clarification of our position may be needed. 

For example, we wrote that Taste, Inc. is not legally permitted to make a “profit,” a short-hand explanation of NFPs which at least one reader may have interpreted as meaning that Taste, Inc.’s income cannot exceed expenses, or that it cannot accumulate assets.  What we should have said is: an NFP like Taste, Inc. cannot have shareholders and cannot distribute its profits (or its assets) to its members, directors or officers other than as reasonable compensation for services rendered, or as reimbursement for contributions made for the NFP’s benefit. 

But the one point we continue to stress is that there is something just not quite right about a community organization like Taste, Inc. making such an effort to downplay or conceal its corporate status.  We also can’t help but wonder why Taste, Inc. doesn’t post its IRS Form 990 (or 990-EZ) on its fancy website so that anybody interested in the finances of Taste, Inc. can see them without having to request those reports from Taste, Inc.?

Maybe Taste, Inc. president Dave Iglow (Pine’s Mens Wear of Park Ridge), or vice-president/secretary Albert Galus (Academic Tutoring Centers), or treasurer Jim Bruno (Chase Bank), or directors Dean Patras (Broadway Livery Service), Sandy Svizzero (Parkway Bank & Trust Company), Barb Tyksinski (All on the Road Catering) and John Warnimont (Activision Electric), would like to explain all the secrecy?  Why aren’t they interested in giving the community that keeps their NFP in business a look inside its finances and how it operates?   

While they’re at it, maybe they could tell us why Taste, Inc. gave $1,000 to then-Taste, Inc. vice-president Bob Dudycz’s campaign fund last September?  And if they’re really in an open and honest mood, maybe they could try answering some of those questions we posed in Time For A Transparent “Taste” – Part 2 

After all, if there’s no Culture of Secrecy, why are they hiding?

9 comments so far

Pub-dog’s come on now — you should know why Taste Inc. popped one of its own. What’s this world coming to when you can’t help a buddy out? Help him retire his campaign debt to himself. By our read, that’s 10 large plus! Go look it up Pub-dog’s!

Good point. What are they hiding? Or maybe I should put it the other way: Why aren’t they disclosing. I have checked their website and its very professional, so it should be able to hold that information without any problem.

$1,000 to Duducz sounds wrong to me.

PD:

One of the questions you ask in todays post has to do with the $1,000 check to Mr. Dudycz. Don’t we already know everything there is to know about this?

I looked back on the threads in early July and a TPR board member posted here that the $1,000 was for a table at a retirement dinner. Following is the answer from that post:

“There is more. Yes including $1000 a table at the retirement party for a person who has donated thousands of hours of his time to this and other civic organizations.

You may not like the decision but remember it was made by a group of people in a private organization trying to deliver something positive for the community”.

I am relatively new to the community so I am the wrong guy to judge what this guy has or has not done for the community – I will leave that to you. I would not know him if he knocked at my front door.

So your question has been answered. Many here will question the judgement of their decision but when you ask the question today, what else is it that you want to know?

A12:25,

That might be the “answer” from a TPR board member, but it strikes me more as spin control.

The contribution is listed as an individual contribution to Friends for Bob Dudycz, which is a campaign committee. I believe that might be a violation of the rules governing NFPs, not just a matter of personal opinion about anyone’s judgement.

I’ve also looked at the D2s (thanks for the suggestion PRU) and the filings don’t seem to show any expenses for a “retirement party” for Mr. Dudycz. There is an expense for Hall rental, but that is billed as a rental for fund raising. But maybe I’m just not hip to all the lingo used to describe “retirement parties”…maybe [they] are calling them “fund raisers” these days?

Mr. Dudycz’s campaign committee did provide him with about $10,600 in debt repayment of a $20,000 loan Dudycz made to his own committee back in 2005.

Personally, my concern is with what the taxpayers of Park Ridge have provided to Taste Inc., free of charge, and why Taste Inc. doesn’t provide those same taxpayers with a voluntary accounting of their income and expenses.

This doesn’t strike me as rocket science, but then I’m not very well versed in the fine art of moving campaign contributions around.

In case you are interested A12:25,

The references I’ve used are below, in a rather long cut and paste.  I’ve underlined (hopefully) the interesting and relevant portions:

1.Accounting Dictionary: Nonprofit Organization

Group, institution, or corporation formed for the purpose of providing goods and services under a policy where no individual (e.g., stockholder, trustee) will share in any profits or losses of the organization. Profit is not the primary goal of nonprofit entities. Profit may develop, however, under a different name (e.g., surplus, increase in fund balance). Assets are typically provided by sources that do not expect repayment or economic return. Usually, there are restrictions on resources obtained. Examples of nonprofit organizations are governments, charities, universities, religious institutions, and some hospitals. Most nonprofit organizations have been granted exemption from federal taxes by the Internal Revenue Service. Many of these organizations refer to themselves according to the IRS Code section under which they receive exempt status (i.e., 502(c)(3) organization). This identification lets donors know that their contributions to this organization may be deductible for income tax purposes.

2.Law Encyclopedia: Nonprofit

This entry contains information applicable to United States law only.

A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive.

Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. Like for-profit corporations, nonprofit corporations must file a statement of corporate purpose with the secretary of state and pay a fee, create articles of incorporation, conduct regular meetings, and fulfill other obligations to achieve and maintain corporate status.

Nonprofit corporations differ from profit-driven corporations in several respects. The most basic difference is that nonprofit corporations cannot operate for profit. That is, they cannot distribute corporate income to shareholders. The funds acquired by nonprofit corporations must stay within the corporate accounts to pay for reasonable salaries, expenses, and the activities of the corporation. If the income of a corporation inures to the personal benefit of any individual, the corporation is considered to be profit driven. Salaries are not considered personal benefits because they are necessary for the operation of the corporation. An excessive salary, however, may cause a corporation to lose its nonprofit status.

Nonprofit corporations are exempt from the income taxes that affect other corporations but only if they conduct business exclusively for the benefit of the general public. State laws on corporations vary from state to state, but generally states give tax breaks and exemptions to nonprofit corporations that are organized and operated exclusively for either a religious, charitable, scientific, public safety, literary, or educational purpose, or for the purpose of fostering international sports or preventing cruelty to children or animals. Nonprofit organizations may charge money for their services, and contributions to tax-exempt nonprofit organizations are tax deductible. The Internal Revenue Service must approve the tax-exempt status of all nonprofit organizations except churches.

A vast number of organizations qualify for nonprofit status under the various definitions. Nonprofit organizations include churches, soup kitchens, charities, political associations, business leagues, fraternities, sororities, sports leagues, colleges and universities, hospitals, museums, television stations, symphonies, and public interest law firms.

A nonprofit corporation with a public purpose is just one organization that qualifies for tax-exempt status. Under Section 501 of the Internal Revenue Code (26 U.S.C.A. § 501), more than two dozen different categories of income-producing but not-for-profit organizations are exempt from federal income taxes. These other tax-exempt organizations include credit unions, civic leagues, recreational clubs, fraternal orders and societies, labor, agricultural, and horticultural organizations, small insurance companies, and organizations of past or present members of the armed forces of the United States.

The number of nonprofit corporations in the United States has increased over the last half of the twentieth century. Although nonprofit corporations cannot produce dividends for investors, they provide income for the employees, and they foster work that benefits the public.

The activities of nonprofit corporations are regulated more strictly than the activities of other corporations. Nonprofit corporations cannot contribute to political campaigns, and they cannot engage in a substantial amount of legislative lobbying.

To Anon 9/5/08 @ 12:55 PM:

You are correct. Taste, Inc. Treasurer Jim Bruno did post (on 07.11.08 7:01 am, in response to “Time for a Transparent ‘Taste'”) that the $1,000 contribution to the Dudycz campaign fund went for a table at Dudycz’s retirement (from Maine Twp. gov’t) party, claiming that it was done because Dudycz is “a person who has donated thousands of hours of his time to this and other civic organizations.”

But it’s our understanding from a variety of sources, including the Illinois Attorney General’s website, that payments to or benefiting NFP officers and board members can only be made for limited purposes; and Dudycz’s service “to other civic organizations” besides Taste, Inc. might not qualify for one of those purposes. Additionally, if that $1,000 contribution to his campaign fund was compensation for his service to Taste, Inc., how were the other officers and directors of Taste, Inc. compensated for their services?

Compensation of NFP officers and directors is also governed by the NFP’s by-laws, but Taste, Inc. doesn’t post those on its website, either.

For an organization that appears to have been created in 2005 to hold a monopoly on perhaps our biggest civic event each year by using a wealth of volunteers and government services, we think Taste, Inc. is far too secretive.

Once again we note that if there is nothing “interesting” going on inside Taste, Inc., why are its operators keeping all these secrets?

Hey TPR dudes!

Whatcha gonna do? Your silence is deafening. Show me the money!!!

Is it me, or do you find it funny that you are all complaining about “secrecy” and NOBODY is willing to post under their own name???

Hillarious!!

Ssshhh! on 09.08.08 @ 9:08 pm:

It’s you.

Our complaints about “secrecy” relate to the elected and appointed public officials who populate our taxpayer-financed governmental bodies who owe us transparency and accountability; and those persons/business organizations like Taste, Inc. who take resources from those governmental bodies for their private benefit.



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