Black Lives Matter's finances suffered a blow after the nonprofit ran a $8.5 million deficit last year as donations fell, disclosures reveal.
The Black Lives Matter Global Network Foundation (BLMGNF) saw the value of investment accounts fall by almost $10 million in the most recent tax year, according to a copy of its tax return, first reported by The Washington Free Beacon, a conservative website.
The organization's latest Form 990 shows that a loss of just over $961,000 was logged on a securities sale of $172,000. The disclosures suggest a year of missteps for the foundation, as well as a dramatic drop in donations.
The foundation was started by organizers of the Black Lives Matter movement, which first emerged in 2013 following the acquittal of George Zimmerman in the killing of 17-year-old Trayvon Martin. It is not the sole organization within the broader movement but is the largest and most well-funded.
Donations amounted to about $9.3 million for the period between July 1, 2021, and June 30, 2022, while net assets stood at about $30 million. By comparison, for the period between July 1, 2020, and June 30, 2021, the organization reported donations of nearly $77 million, while net assets amounted to $42 million, suggesting a sizeable drop in both categories.
Brian Mittendorf, a professor of accounting at Ohio State University, told Newsweek that the "financials indicate spending down some of the windfall the organization received in the previous fiscal year.
"This does not necessarily mean the organization is headed toward insolvency. However, if their revenues continue as they are after the windfall from 2020-2021, they cannot maintain the spending level from 2022 indefinitely, so the organization would need to shrink its spending footprint to be sustainable."
Mittendorf said while the overall investment losses "are consistent with losses in the market as a whole during this time period, the huge loss on disposed assets is concerning."
BLMGNF shared with the Associated Press in May 2022 that it had invested in stocks about a third ($32 million) of the $90 million it received as donations amid racial justice protests in 2020 following the killing of George Floyd.
Black Lives Matter co-founder Patrisse Cullors acknowledged in an interview last year that BLM was not prepared to handle the wave of contributions that came in following the murder of George Floyd at the hands of Minneapolis police.
She stepped down as executive director in 2021, on the heels of controversy over the foundation's finances and her personal wealth. Cullors told the AP last year that neither she nor anyone else in leadership misused donations.
The nonprofit's latest tax form shows that although Cullors has departed, contracts to her family have continued.
Her brother, Paul Cullors, and his two companies were paid $1.6 million for "professional security services" for the tax period ending June 2022. He is listed as one of only two paid employees during the year, receiving a $124,702 salary for his role as "head of security."
Shalomyah Bowers, the foundation's board secretary, told the AP last year that protection could not be entrusted to the former police officers that typically run security firms, given the movement is known for its stance against law enforcement.
According to the organization's Form 990, Bowers' company, Bowers Consulting, was paid almost $1.7 million for management and consulting services.
Mittendorf said the biggest issue raised by the financial disclosures is the "continued and substantial transactions with insiders."
"While this is not improper per se, it does raise concerns about potential conflicts of interest in governing the organization. So I would hope the organization would take strides to ensure any such transactions benefited the organization and not individuals affiliated with it," he said.
Black Lives Matter Grassroots, which represents local BLM chapters, has accused Bowers in a lawsuit of treating the foundation as his "personal piggy bank" and stealing more than $10 million in donations for personal use, the Los Angeles Times reported.
The lawsuit, filed last year, alleges Bowers' actions have led the foundation into "multiple investigations by the Internal Revenue Service and various state attorney generals, blazing a path of irreparable harm to BLM in less than eighteen months."
Bowers and the foundation denied claims of financial misconduct.
Newsweek has contacted the Black Lives Matter Global Network Foundation for comment via email.
Update 5/24/23, 10:20 a.m. ET: This article has been updated with comment from Brian Mittendorf.
Correction 06/06/2023 2.30 p.m. ET: This article was corrected to remove reference to risk of bankruptcy.
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