Should organizers continue to throw lavish Derby parties?
"Partying in the name of charity." That's what many organizations say you're doing when you spend thousands on tickets to their parties. But how much is spent on extravagance versus charitable contributions?
$30,000 for Hugh Hefner's plane; $338,000 for hotel rooms; and thousands upon thousands of dollars for Kentucky Derby tickets.
That's a very short list of expenses listed on past tax forms for parties like the Mint Jubilee, the Grand Gala and Barnstable Brown.
"I think at all these events you have to look at the bottom line, you have to look at how much is going to the charity, to really justify the expenditures and extravagance that they're doing," said William Carroll, CPA.
On their 2001 tax form, the Mint Jubilee Corporation reported operating $134,000 in the hole for the "Derby Dinner and Dance."
Even after two additional events, the corporation was still $68,000 in the hole. At the end of the year, the corporation had $131,000 in assets and donated $2,640 to charities.
"Everybody likes a good party... if it wasn't a good party, they probably wouldn't be able to raise the monies that they did. So there's an investment in the parties to raise money. As long as the investment doesn't infringe too much on what's going to charity, it's probably a good deal," said Carroll.
The 828 Foundation, organizers of the Grand Gala, had over half a million dollars in donations and made over half a million from the Gala but spent over a million hosting the event. The 828 Foundation donated $40,000 to charities.
Based on the 2007 tax forms, it costs over $752,000 to host the Barnstable Brown. Even after a million dollar donation to UK and U of L, the organization still had a million in the bank.
"It appears that a couple of them do raise some significant funds, they do donate them to a charity. They do do a lot of good. A couple of the others, they don't make money, it looks like an excuse for a party," said Carroll.
"I kind of have issues if it's not at least 75% going back to the charity. You can look those things up online. There's major charitable things out there... that it's more like 30 and 40% going back. And I'm sorry there's somewhere they could be doing something different," said William Dean.
According to Carroll, there is no law requiring a minimum amount non-profits have to give to charities.