Chris Wink, NEastPhilly got his report out so fast on the meeting last week that it gave me time to digest to event. You can see NEastPhilly coverage here which includes video. There most significant points raised at the meeting to me were:
- The old Frankford Y continues to deteriorate and people who live in that area say it is attracting some bad activity. Barry Howell (president of the Northwood Civic) noted that no progress is being made at turning it into something positive for the community. That is what we all would like. Then he went on to say that if something doesn’t happen he (the Northwood Civic) will be contacting the political representatives to demolish it. With the threat of demolition, it might force those with the power to do something to actually do something.
- Tracy O’Drain of the Frankford CDC was present and spoke about their revitalization efforts on the 4600 block of Frankford Avenue. Barry praised their efforts in that regard and said that revitalization of Frankford Avenue is important to Northwood.
- Barry announced that next month nominations for office in the Northwood Civic will be conducted with elections at the November meeting. He said that there is a need for some new people to step up and take leadership positions. The present leadership, including himself, would like to take a break.
Next meeting of the Northwood Civic Association meeting will be on Tuesday, October 18th.
20 thoughts on “Northwood Civic Association Meeting”
Barry Howell was on the right track:
New Frankford Community Y Stakeholders Meeting – posted 4/20/2010:
“Friday night my father and I attended a dinner meeting at Gallo’s Friday night for a presentation on the new plan for what is going to happen to the New Frankford Community Y. Among the attendies were democratic ward leader Dan Savage, State Rep Tony Payton Jr and his chief of staff Jorge Santana, representatives from state senator Christine Tartaglione, and counselwoman Sanchez. Francis Clay and Barry Howell from the Frankford and Northwood Civics were also in attendance.
After an optimistic initial presentation, discussions of the Y’s future turned contentious and questions of legality were raised when the development team proposed to turn the non profit center into a for profit business, with the Northwood Civic voting last month to file a suit in Orphan’s Court to see the past financial records of the center.”
One year ago, plus seven months, Barry Howell was absolutely right in protecting the New Frankford Community Y and took took a vote.
The membership of his own Civic association told him (by a vote) to file a Case in Orphans Court, but he did not.
Barry decided to help all the thieves escape scott free.
He must have known about this when he started grand-standing on knocking down buildings at his last Civic meeting as this went to sale just a week before:
BENEFICIAL MUTUAL SAVINGS BANK VS THE NEW FRANKFORD COMMUNITY Y
Sheriff’s Sale Notices for September 13, 2011
4704 Leiper st. 23rd Wd 33125 sq. ft. BRt#. 882938230 Improvements:
276-894 23rd Wd. 33, 125 sq. ft. BRT# 882938230 improvements Misc.
THE NEW FRANKFORD COMMUNITY Y
C.P. August term, 2010 No. 000911
$178,464.93 plus interest through the Date of sheriff sale, plus costs.
No wonder he wants out of the Civic.
No one listens to what he says because he doesn’t do what he says.
What does Barry mean “With the threat of demolition, it might force those with the power to do something to actually do something.’ Who exactly are those that he thinks have power? I thought that he was king.
Why isn’t he concerned with all of the flop houses on Leiper St.? I thought that a few years ago , Barry was going to take the Y board to court…..someone please refresh my memory on that.
skeeter Says: “What does Barry mean ‘With the threat of demolition, it might force those with the power to do something to actually do something.’ Who exactly are those that he thinks have power?”
Terry Tobin has the power. It’s pretty simple to understand. Terry Toben was a either a hypnotist or a master chef and the 990’s were his cook books.
All of Frankford has been Tobinized and it hasn’t yet worn off.
Tobinization wears off when placed under arrest & put in a jail cell.
If you visit the New Community Frankford Y and look at the property. Just Look at it! Then look at the 990’s.
Received a grant: 224,000
Repairs & Maintenance: 98,127
Equipment Rental: 3,628
Total Functional Expenses: 467,933
Look at the roof of the building. Then look at the 990’s for what is suppose to be there.
What you will see is all the missing roof repairs, all the missing building repairs, all the missing computer software, all the missing computers, and all the missing money along with all the missing people who’s names appear as the Vice President, Treasurer & the Board of Directors.
You will read the names of all the missing people who will not be held accountable & you will not see them.
Why? Because birds of a feather cook together.
Because most of Frankford’s non-profits have been Tobinized.
Because it is a cover-up. Selling the building or knocking it down is a cover-up.
If the Frankford’s Y books were cooked; that’s Charity Fraud & Tax Fraud.
There needs to be an investigation. Perhaps it should begin with this list off the 990’s of 2009:
Terry Tobin – Executive Director (deceased)
Tony Herman – Treasurer
Tony Rachuba – President
Marie Delany – Vice President
Steve Blackburn – Secretary
Tom Brady – Director
James Gill – Director
Lorraine Nell – Director
Howard Pruyn – Director
Charles Sgrillo – Director
Carol Hancock – Director
Rick Mariano – Director
What is interesting about that list of names from the 990’s is
some of these people have already met Philadelphia District Attorney Seth Williams.
It also has some names that stand out who are operating or have operated not for profit organizations, like Former Vice President of the Y, Marie Delany who also heads the Overington House & the Frankford CDC.
Now take a look at this list of blight on the Frankford Avenue:
Frankford CDC Snapshot Survey Business List # Business Name
From the list: Steve Blackburn, the former Secretary of the now defunct New Frankford Community Y.
What is he doing today?
He is running a couple of Frankford Avenue Non-Profits:
“Children’s Aid Society (Frankford) Steve Blackburn 4137 Frankford Avenue” and “Steve Blackburn Frankford Neighborhood Center 4451 Frankford Avenue.”
About 4451 Frankford Avenue – you would really rather get Tobinized & read crooked cooked books than know.
As an afterthought, about the Y, who is collecting the mail?
The Un-Tobinizer Knows!
Who do we contact to get an investigation started on the Frankford Y?
As you stated some of the people who were involved with the Y are still operating and receiving funds here in Frankford (Maria DeLany, President of Frankford CDC and Steve Blackburn). The Board of Directors of the Frankford Y should be held accountable for any wrong doing by Terry Tobin.
I remember about two years ago when Terry Tobin hooked up the Anthony Bannister in an effort to change the Y into a “for-profit” business. Terry Tobin was going to be the manager. Barry Howell’s first response to this deal was ” I small a rat”. Terry Tobin refused to present the financials for the Y per Barry’s request. But then Barry and others were taken to lunch at Gallo’s over this deal and all investigations were stopped and Anthony Bannister was given the go ahead with his plan for the Y as long as the Y remained a non-profit. The financial situation with the Y was so deplorable that even Mr. Bannister backed away from this deal and we never found out what was uncovered.
I’m sure it’s not easy being a president of a neighborhood civic organization. There is the pressure from residents complaining about various things going on in the community and there is the pressure from politicans who ask for “favors” in exchange for future “favors”. Sometimes a civic president is faced with the decision of doing what is best for the community or doing what is best for the present political power.
WOW That was quick ,I said before I spoke one word about the Frankford Y ,that what I said was going to make the blog nut’s go crazy,sure happned. I don’t mind being slamed ,the only thing I wish it was coming from poeple who do things to help ,Northwood become a better place , not just run there mouths about other poeple . Elections are coming up for NWCA officers come out and get active ,that way you can grandstand yourself . Good Luck Barry
When people are Tobinized, they cannot not see that a CRIME has been committed.
The Frankford Y was almost 90 years old. It had been operated successfully for most of them.
It was funded by Public Money. It was in a sense a Public institution for the benefit of the Public.
This is no different than an “inside Job” bank robbery. The robbery was facilitated or aided by the same people who are currently operating other area non-profits.
A good old fashioned “wash sale” is what is happening now, but it should be done through the Orphans’ Court, not the sheriffs department.
This situation is like a banking crisis. When bank one fails the rest will fail too.
If there is no investigation, this will be the death knell for all Frankford’s non-profits.
Who would continue to fund any area not for profit, knowing that the money will be mis-used or stolen?
Only Politicians who are getting kick-backs or peddling influence would keep funding them.
Barry Howell (an x-boxer) was never serious about this.
On the outside of the arena he talks a good fight, but once in the ring he is suppose to lose.
This is how it is done:
“…two motions were passed unanimously allowing the civic to file lawsuits. A suit in orphan’s court will be filed against the New Frankford Community Y to force them to open up their finances. Civic president Barry Howell said that on several occasions the NFCY director Terry Toben has declined to explain where the money for the Y has been going for the last ten years.”
He was just using an old boxing tactic called “Taking A Dive.” It is how to fix a fight to pre-determine the winner.
It is very likely that Barry was ordered to stand down by the local Politicians.
Now it looks as if Barry wants to run away from his Civic responsibilities and pass all the problems (he helped create) onto some one else.
I apologize to Barry, if this is not the case.
But if this is not the case, he should finish what he started or will be suspect in aiding & abetting a cover up & criminal conspiracy.
The Un-Tobinizer Knows
Tobinizer With the Info you have you should call the State A.G ‘s office ur shut up . May-be you should take a dive . Barry If you want any more info about the Y put up 10.oo bucks and join NWCA. .Barry
I would urge everyone to contact the District Attorney about the Frankford Y: http://wn.com/Seth_Williams_for_DA_Community-Based_Prosecution
I don’t need my intelligence insulted by joining the NWCA. I can see right through you. You have been Toninized into taking a dive, and now are part of the cover-up.
You used the name of the Frankford Y to authorize a vote to use $1500 to pay your attorney:
“A pair of unanimous 18-0 resident votes urged President Barry Howell and his board to go ahead with plans to request an injunction on the opening of an addiction recovery facility on Roosevelt Boulevard and to sue the Frankford Community Y to open its financial records.
‘We oppose this as much as you do,’ State Rep. Tony Payton
The unanimous vote authorized Howell to use $1,500 of the association’s funds to retain a lawyer to begin investigating how to force an injunction on VOA’s operation…
‘This is going to be expensive,’ Howell said. ‘But this is why we’re here, this is what we want to fight.’ …”
Show us what work was done on this by your attorney.
Don’t pass this off on the next guy.
Get off the floor and finish the fight Barry!
Steve Blackburn, the former Secretary of the now defunct New Frankford Community Y.
What is he doing today?
He is running a couple of Frankford Avenue Non-Profits:
“Children’s Aid Society (Frankford) Steve Blackburn 4137 Frankford Avenue” and “Steve Blackburn Frankford Neighborhood Center 4451 Frankford Avenue.”
What is especially interesting is that I contacted the Children’s Aid Society of Pennsylvania http://www.caspa.org/ and they have no offices in Frankford, nor have they ever heard of Steve Blackburn.
In fact neither of Steve’s organizations are listed with the Pennsylvania Department of Corporations or Charities.
His business is listed Here:
September 2007 To our Friends, Neighbors … Children’s Aid Society at Frankford, 4137 Frankford Avenue, 215-685-1472. Provides parent education and empowerment seminars. Offers separate Parenting … http://www.impactservices.org/comm_dev/downloads/community_resources_070828.pdf
Children’s Aid Society at Frankford. 4137 Frankford Avenue. Philadelphia, PA 19124. Office: 215-685-1472. Provides parent education and empowerment
And (even though this is not listed in the Frankford Y’s 990’s as anyone paying rent), in 2003, Steve Blackburn is also listed as having an operation here:
Frankford Family Development Center
4700 Leiper St, 3rd Floor
Phila. PA 19124
Phone: Jennifer Barrile at: 215-685-1476
Office Hours: Monday through Friday 8:30am-5:00pm
A project of Mayor’s Office of Community Services
To empower families to achieve self-sufficiency through the coordination of services supporting family life and the healthy development of children and youth.
Steven Blackburn, Project Director
Jennifer Barrile, Administrative Assistant
Emi Shibata-Tidwell, Truancy Case Manager
Armstead King Jr., Truancy Case Manager
Carmita Johnson, Case Manager
Eric Gibson, Youth Coordinator/Case Manager
Milton Holmes, Community Services
Frankford Family Development Center is a collaborative effort with area community based organizations, city departments and other MOCS programs providing:
• Family services and support
• Truancy prevention
• Youth prevention activities ages 12-17
• Super-cupboard program
• Employment services
• After-School and summer programs
• Parent support workshops
• Emergency assistance
• Computer Classes
• Community Voice Mail
• Information and referral
The Un-Tobinizer Knows
@Lorraine-I’ve been to plenty of meetings both public and private where a certain civic president was present; and I never once heard a politician ask him for a favor. That’s a pretty bold statement you made with having absolutely zero knowledge or proof of any such ‘favors’ being granted. You are right though; a civic president gets a lot of complaints from neighbors and residents about things in the neighborhood. It would be nice if these complainers got off their rears and did something about the problems other than complain to a person who volunteers their time and effort for the betterment of the community. I can assure you this though; he looks into every complaint he gets and does what he can to help. The Un-Tobinizer, which is what he’s calling himself now, does nothing for anyone that doesn’t allow him to massage his inflated ego and afford him the chance to say, ‘see I told you so.’
Sorry Tobinzer Can’t give any info on NWCA biss. your not a member . But if the D.A. ask to see them I will supply him with any info he wants. By the way, I received a tip that ELVIS PRESLEY is living at the Frankford Y ,look into that and report that to the un-tobinizer .Barry
If we really want to get rid of these phoney non-profits (that are in it for the profit) then we need to act as a group to investigate them or have the Attorney General do an investigation. Beginning with the Frankford Y. It’s my understanding the Frankford Y was over $300,000. in debt. A petition letter could be drawn up to the Attorney General asking them to investigate what we suspect as improprieties and holding the Board of Directors liable.
In the meantime let’s stay on top of the non profits that are still in business. If they are receiving government funds under the guise of community improvement then we should be able to get an accounting of what they have actually done do warrant those funds.
Because Frankford has become “Non-Profit Heaven”, maybe we should start a group called “Non-Profit Overseers”. A volunteer group, without funding, that would demand to see what these non-profits and organizations are really doing.
Thank You Un-Tobinizer for posting on Steve Blackburn.
He & his crew operated out of the Frankford Y between 2003 till it’s closing and must have been a drain on it’s resources;contributing to it’s closing.
But like blood sucking parasites, when the host dies and the blood is cold, they leave & find fresh blood.
Your posts on PhillyBlog have conjured up old memories of incestuous political relationships in Frankford:
02-03-2006, 03:30 PM post 251
This was from MLK Day celebration at St. Joachim’s:
Albeit, This was a very worthwhile event and a great gathering for the community. The interesting thing here is, again, the interlocking of administration and staff of the non profits and funding. Hopefully, this $2500 will be put to good use.
I’m surprised FCDC didn’t get the $2500 check. Usually FCDC gets just about any funding that gets tossed Frankford’s way.
Ms. Folks is on the Board of Directors of FCDC and her husband Sloan Folks is the Director of Economic Development at FCDC. (economic development is just booming here!)
As always, the event featured a multitude of area sponsors and coordinators, including Frankford Group Ministry; Joan Oliveto Catering; Nulty Funeral Home; Frankford Garden Club; the Frankford CDC; Frankford Hospital; and Frankford High School students, who served the meal after their school’s ROTC members led lead the group through a presentation-of-arms and the national anthem.
The dignitaries represented a “who’s who” of Frankford’s last two decades and spoke of this year’s theme, Peacemaking in the Neighborhood.
Steve Blackburn, of Frankford Family Support Services, talked about the need to bridge the racial gap at a young age.
“They’re going to carry the torch,” said Blackburn, referring to the youth in the room. “This is not a day off, this is a day on.”
Councilman Rick Mariano (D-7th dist.) was smiling and cheerful despite his looming trial in federal court for multiple corruption charges and a possible prison sentence.
Mariano presented the Frankford Coalition of Neighbors with a Philadelphia Activities Fund check for $2,500, commenting that he didn’t know what the next year would bring. He added, if “I can, I’m going to be right here.”
In their addresses, the Rev. Marie Johns, pastor of Second Baptist Church of Frankford, the Rev. John Clodfelter of St. Mark’s Episcopal Church, and the Rev. Robin Hynicka, who preceded Catherine Bowers as executive director of the Frankford Group Ministry, urged everyone to be mindful of King’s message and its local impact.
It was a group of Frankford’s clergy members, after all, that formed the Human Relations Coalition (HRC) in 1986 to improve ethnic relations in the neighborhood, where racial tensions had reached fever pitch.
“People have told me stories about getting chased home from school,” said Jennifer Powell-Folks, who heads HRC’s offspring, the Frankford Coalition of Neighbors (FCN). The group, which took over the annual breakfast six years ago, focuses on volunteerism and fostering peace via community gatherings.
Raymond Perry, former president of HRC’s board of directors and current administrator of Redirection Center, Inc., reflected on the ups and downs endured by the grassroots organization that ultimately served as a driving force in progress.
The HRC eventually disbanded, he said, for a simple reason:
“We didn’t need it anymore,” said Perry.
But the message was clear that Philadelphia as a whole — which tallied 380 homicides last year, up from 330 in 2004 — still needs help.
The keynote speaker at Monday’s breakfast, Bilal Qayyum, heads Men United for a Better Philadelphia (MUBP), a prevention group that formed in 2002 to combat drug-related homicides citywide with teams in each sector of Philadelphia.
In honor of the holiday, MUBP had launched a street-corner outreach on Jan. 13. Dubbed the Peace Tour, volunteers traveled by RV encouraging men of all ages to take advantage of Philadelphia’s employment resources.
King, said Qayyum, was not just a mere dreamer, he was a revolutionary of positive change and social progress.
“We’re asking men to stand up and be a man in their community,” Qayyum told the group. “Until we develop that mindset, nothing’s going to change. We’re all in this together.” ••
Reporter Jeannie O’Sullivan can be reached at 215-354-3038 or email@example.com
Last edited by Dragonfly : 02-03-2006 at 03:40 PM. Reason: Adding information and correcting name.
Friend of Dragonfly
I would like to take a break here on Steve Blackburn and get back onto the New Frankford Community Y.
I was doing some carousing as I read in the paper today, looking for the Sheriff Sales.
What I did find was just behind the Sheriff Sales on page 19 of the Philadelphia Public Record. [Serving citywide Political, Labor, Legal and School communities of Philadelphia: http://www.phillyrecord.com/ ]
Marie Delany, formerly the Vice President of the Frankford Y is mentioned in a news article on Page 19, is forming the “2012 Philadelphia Preservation Foundation”
She has aspirations to turn the Divine Loraine Hotel into a Giant Soup Kitchen for Women Veterans – Nice!
Hotel is on the National Register of Historic Places so there is money to be had for various things in building repairs.
Marie Delany is sort of an anomaly in the Republican Party as the Republicans hate funding social programs, even Social Security, they hate it. They especially hate helping feed the poor, even if they are American War Veterans.
Good luck to Marie on that one.
I did however find the Y listed for Sale here:
Sheriff’s Sale Notices for October 4, 2011
276-894. 4704 Leiper St. 23rd Wd 33125 sq. ft. brt#. 882938230 Improvements: http://www.law.com/image/pa/ads/Sheriff_2011_09_26.pdf
Will return after dinner and disseminate other information concerning Frankford.
Many people have said: It’s just the Frankford Y – who really gives a $hit?
As per this thread, Northwood Civic Association had pledged to file a lawsuit in Philadelphia Orphans’ Court for an accounting on the Y.
They took a vote on it & that was their decision.
No one knows why, but thus-far they have failed to do so. That failure makes them part of the theft by deception as they paid their lawyer.
As for Frankford as a whole being proliferated with non-profit organizations displacing honest business – I suppose my beef is the methodology used to accomplish their goals.
It has not been done honestly, openly, with transparency, or with any accountability.
Frankford was socially engineered to become the Philadelphia’s Soup Kitchen; serving the poor. It now also serves as a pressure relief valve for the prison population.
Basically the Tax Paying Public have been lied to and ripped off by Frankford’s non-profit community and our Elected Officials have everything to do with it.
How many of these “businesses” in Frankford would still exist if they received one audit from the IRS, or the Attorney General, or the Orphans’ Court?
It appears that there are just too many people being “protected.” There is almost no way to fight against “The House” when the deck is stacked.
Just examine the incest & cross-contaminated skeletons in there collective closets:
Freshman Rep Wants Another Term | Re-Elect Rep Tony Payton, Jr! and Councilwomen Maria Quinones-Sanchez and Blondell Reynolds Brown.
Others in attendance included Steve Blackburn, director of Frankford Family Support Services; Barry Howell, president of Northwood Civic Association; Seth Williams, district attorney …
By: María Quiñones-Sánchez:
Today I joined Dr. Imani and Brother Steve Blackburn, who was recognized this morning at Sankofa Freedom School in Frankford for his outstanding work with ex-offenders and Frankford Youth. Congratulations Brother Steve!
Sankofa Freedom Academy CS-Charter … – Commonwealth Portal
Name of School: Sankofa Freedom Academy Charter School … member of the Frankford Community, an urban low income community in the city of ….. In particular, through our Vice-Chairperson, Steve Blackburn, we have forged a strong …
The Ex Files
photo: Ronald Coalson
Two North Philly buddies who did prison time have formed a group to keep kids out of trouble. by Daryl Gale
Wayne Jacobs and Steve Blackburn grew up in the tough neighborhood around 12th & Susquehanna, hung out with the same bad crowd and committed various crimes against society until the old friends found themselves reunited at Graterford prison. Fortunately, that’s not the end of this story, it’s only the beginning.
In 1995, Jacobs, in prison for burglary and other property crimes, decided it was time to turn his life around.
He swore that when he got out, in two years, he’d make a positive contribution to society and to his old North Philly neighborhood.
And he’d figure out a way to make sure the next generation of North Philly teenagers wouldn’t just move into his empty cell. So he got started right from his prison cell.
He talked to other inmates about the motivations and reasons for their crimes, and even conducted a jailhouse survey on how and why the prisoners did what they did.
And in doing so, Wayne Jacobs made a remarkable discovery. … more:
X-Offenders for Community Empowerment lead by Wayne Jacobs and Steve Blackburn to help the “Band the Box” initiative. This would forbid employers from putting the box on the job applications that forces formerly convicted individuals to notify the employer prior to ever meeting the perspective
This allows the citizen an opportunity of an interview, so that they can show
their potential and work experience. We need to allow the formerly convicted an equal opportunity to be productive members of the work force and not discriminate against the formerly convicted or any other demographic.
Ban The Box « CBS Philly
Philadelphia Ex-Councilman, Ex-Con Mariano Promotes ‘Ban The Box …
X-OFFENDERS FOR COMMUNITY EMPOWERMENT
Pardon Me Clinic
Assisting the formerly convicted who are no longer on probation or parole and who are seeking Clemency and a Second Chance at employment opportunities, etc. through the Governor Pardon Process
Frankford Neighborhood Center
4451 Frankford Avenue,
Philadelphia, PA 19124
Time: 6pm to 8pm
May 2, 2011
June 6, 2011
Oct. 5, 2011
Nov. 7, 2011
Dec. 5, 2011
Contact Wayne Jacobs of X-offenders for Community Empowerment Phone: (267) 325-0335, E-mail: firstname.lastname@example.org
Sponsored by Bread Roses Fund , Univ.of Penn.Law School , Isaiah Thomas (Mature Cradle, Inc.)
Website: http://www.x-offenders.org, On Facebook as: xoffendersempowerment or xoffendersPA & Twitter @xoffendersPA Philadelphia African American Fund http://aaufpa.blogspot.com/
Time: May 2, 2011 from 6pm to 8pm Location: Frankford Neighborhood Center Street: 4451 Frankford Avenue, City/Town: Philadelphia, PA 19124 Website or Map: http://www.google.com/search?… Phone: (267) 325-0335 Event Type: pardon me clinic Organized By: X-OFFENDERS FOR COMMUNITY EMPOWERMENT Latest Activity: Apr 30
Lorraine said: “A petition letter could be drawn up to the Attorney General asking them to investigate what we suspect as improprieties and holding the Board of Directors liable.”
You and a few others are on the right track, the rest of these ‘talkers’ are attempting to divert your attention.
Why is the Frankford Civic not pounding the table all the way to the Attorney General’s Office?
Why is the Frankford CDC not involved in a new use or business plan?
Read this: Subject: Non Profit Audit
My question: Is there any service or institution that will audit a non profit organization to find out if there is any corruptions in the organization. Or is there anything I can do to look for specific evidence that might help bring people to justice?
Yes, the IRS can audit and does audit some nonprofit organizations every year. The State’s Attorney General also gets involved if there is evidence of corruption. You have little ability, though, without their assistance to obtain evidence.
Attorney at Law
Legalities of selling a nonprofit
Federal oversight of any nonprofit sale is handled by the Internal Revenue Service (IRS). The IRS primarily is concerned that the nonprofit is sold at fair market value and that the funds of the nonprofit are not used for the benefit of private individuals.
The IRS does not require pre-approval of the sale of a nonprofit, but the IRS may question the sale through, among other things, an audit of the nonprofit’s tax return for the year in which the sale is reported. A nonprofit can voluntarily seek IRS approval in advance of the sale, but the ruling may take from three months to a year to obtain.
If pre-approval is not sought, the nonprofit’s board of directors should understand that the IRS can impose financial penalties after the transaction if the sale price is less than fair market value. To ensure the transaction can withstand such post-sale scrutiny, the board should accurately value the transaction and determine whether the purchase price is fair. This is known as a fairness opinion, and it can be invaluable if the transaction is later questioned by the IRS.
Most states exercise some authority and oversight when the assets of a nonprofit corporation are sold to a for-profit business. In some states, state attorneys general may initiate litigation in an attempt to exercise control over such transactions; in other states, specific statutes require prior approval of such transactions.
In Pennsylvania, the Orphans’ Court Division of the County Courts of Common Pleas has jurisdiction over matters involving charitable organizations. Many sales of nonprofit assets to for-profit businesses must be approved by this court because state law mandates that assets dedicated to a charitable purpose cannot be diverted from that purpose without court approval.
To obtain court approval, the selling nonprofit must file a petition with the Orphans’ Court and provide a copy to the Pennsylvania attorney general, who is charged with representing the public interest.
The Charitable Organizations Bureau and, in large transactions, the Antitrust Division of the Pennsylvania state Attorney General’s office will consider whether the sale … will be used for a charitable purpose.
It is wise to work with the attorney general’s office in advance of the Orphans’ Court hearing on the transaction. Generally, the seller and its legal representatives will meet with the attorney general’s office to identify potential problems that would hinder court approval. These advance negotiations can be critical to a smooth approval process.
During the public hearing at the Orphans’ Court, the inquiry generally will focus on whether the selling nonprofit is receiving fair value for the assets sold and whether the sale proceeds will continue to be used for similar charitable purposes. In many instances where advance discussions have already occurred, the Pennsylvania state Attorney General’s office does not send a representative to the hearing.
Instead, the office sends a letter to the court stating that the attorney general’s office will not object to the sale. If the court approves the transaction, the seller generally will be protected from future public challenge, since the court and attorney general acted as representatives of the general public.
When a nonprofit is sold to a for-profit, the sale proceeds must remain “charitable assets” that are dedicated to a similar mission. Difficult issues often are presented where particular assets or funds of the nonprofit were donated for specific, named purposes.
In most cases, because the nonprofit is selling to a for-profit, donor-restricted funds will not be available to support the for-profit business in the same manner as they supported the nonprofit. Therefore, creative solutions may be required to continue the use of such funds in a manner as consistent as possible with the donor’s original intent.
There are many ways that the proceeds of the sale of a nonprofit corporation may be used to continue the mission of the selling corporation. The most common ways to return the benefit to the community are to:
• Continue as an operating charitable organization providing other charitable benefits and services that are consistent with the organization’s original mission.
• Establish a new, stand-alone foundation to make charitable grants to be used for purposes consistent with the organization’s original mission.
• Give the proceeds to the nonprofit’s existing foundation (if applicable).
• Form a relationship with a community foundation.
• Give the proceeds to an unrelated organization whose mission is aligned with the selling corporation.
There are many complex issues involved in selling a nonprofit to a for-profit business. But if the nonprofit recognizes the existing legal safeguards and obligations, the community will be the ultimate beneficiary. This is particularly true if the nonprofit was at risk of failure or decline on its own.
The community may actually end up with a net benefit since the services that remain likely will be provided by a financially stronger organization and the proceeds of the sale will be used to provide other charitable benefits.
Charles R. Brodbeck, Esq., is a Director and Mark R. Stabile, Esq., is an Associate with the national law firm of Cohen & Grigsby, headquartered in Pittsburgh.
Anon states: “Why is the Frankford Civic not pounding the table all the way to the Attorney General’s Office?
Why is the Frankford CDC not involved in a new use or business plan?”
1. I agree, the Frankford Civic should be involved with this but I believe Barry Howell, President of Northwood Civic claimed the Frankford Y as within the bounds of Northwood.
2. I believe the Frankford CDC is staying away from the Frankford Y because their president, Marie Delany, was on the Board of the Frankford Y.
From my understanding the Frankford Y is not being sold to a “for profit” enterprise. I think whatever money is received from the Sheriff’s sale will pay off debts. Or will the money go to the city? Not sure on this.
Terry Tobin stated that the Frankford Y was over $300,000. in debt. Who are the people that are owed this money? Has any one put a lein on the Y? And why aren’t the Board of Directors responsible for the outstanding debts?
Barry Howell suggested demolishing the property. If the property is demolished does that make everyting go away? All the debts are wiped off and those who were on the Board are off scott free?
Lorraine Rember I said fix it up or we will try to tear it down,I would like to see it restored then tear it down,the poeple that live there in the area of the Y ,said at the last meeting there sick of whats going on in and around that building .SO JUST FIX IT UP. Idon’t care who stole the moneyor was on the take or do I care . This problem with the Y has bin going on way befofe i became pres. And it is in NW boundries .Also let me clear up a point with PA,again get your facts strait we never paid a lawyer a cent to file a case with Opran’s court . Thats all I can say until you guy’s get your fact’s strait .As the pres. I cant be talking Northwoods biss. with non- member’s. SORRY NO MORE HELP FROM ME . BARRY
To all Any one who wants to talk to me about the Y can meet with me at any time and we can talk, but you will have to know what your talking about ,that goe’s for anyone step- up I don’t have long to go ,Put everything on the table here’your chance to hear it all.No rumors just facts . You can also tape what I say to ;keep me honest .Come on with it . Thank You Barry
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