Strive's amended tax form adjusts CEO pay downward; new one lists $10,000 personal loan

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Strive's amended tax form adjusts CEO pay downward; new one lists $10,000 personal loan

By RACHEL HEATON and JEFF KIDD
rheaton@islandpacket.com, jkidd @ilsand packet.com

Published Friday, January 20, 2012 | 907 Words |

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Strive to Excel has made more than 60 changes to its 2009 tax return -- including a 34 percent reduction to its president's compensation -- as it tries to answer findings in a S.C. Secretary of State investigation.

The nonprofit mentoring group also has released its return for the 2010 fiscal year, which indicates president Tim Singleton took out a $10,000 personal loan from the organization without approval from its board of directors.

Earlier this month, the S.C. Secretary of State's Office cited three violations of the state's Solicitation of Charitable Funds Act on Strive's 2009 return. The findings were forwarded to the S.C. Attorney General's Office, which has requested more information from Strive.

The organization, which made Hilton Head Island High School its headquarters for more than a decade, has ceased operations and is taking steps to formally dissolve.

The Secretary of State received Strive's amended return this week, according to office deputy general counsel Shannon Wiley, who said it will be reviewed to determine if the organization is now in compliance with the Charitable Funds Act.

Wiley said the Secretary of State's investigation continues.

Attempts Friday to reach an Attorney General's spokesman were unsuccessful.

Strive's original 2009 tax filing listed Singleton's compensation at more than $137,000 -- a single-year increase of nearly 42 percent that did not receive board approval, as required by Strive's bylaws.

The amended return reduces the figure to $91,484.

Questions about the returns were emailed to Singleton and board secretary Tom Gardo. Neither responded.

Bob Arundell, the tax attorney who has prepared Strive's tax returns, declined to answer the questions, too. In a letter emailed Friday, he also stated the organization would continue to deny all of the newspaper's requests for information.

Notations on the amended return include an explanation for the $47,000 reduction in Singleton's compensation figure: The original return reflected the president's pay during fiscal year 2009, which ran from June 1, 2009, to May 31, 2010. It should have reflected his compensation during the 2009 calendar year.

It is not clear if Strive's 2008 return, which lists Singleton's compensation as $97,355, reflected his pay for the calendar year or the fiscal year. It also is unclear if that return, already amended once this past September, or others will be recalculated.

Few of the other changes on the 2009 return involved new dollar amounts. Most recategorized portions of employee compensation, which had been listed entirely under "program costs." As Wiley explained earlier this month, the original return indicated 100 percent of Strive's expenditures went toward its charitable cause.

"And that's not true," Wiley said. "That's not true for anybody."

Among other changes on the 2009 form:

The number of employees was increased to three. Arundell, explaining the original return this past August, said Strive listed no employees because Singleton and others who worked for the organization were independent contractors.

The number of directors on Strive's board went from five to three.

A notation that had indicated Singleton's pay is set by the board of directors was deleted.

Answers to questions about whether the board kept records of meetings were changed from "yes" to "no."

Strive's board did not meet between April 2008 and this past September.

The 2010 return, also prepared by Arundell and signed by Singleton, indicates Singleton received a $10,000 personal loan from the organization without approval from a board or committee. The loan is subject to a written agreement, the return says. It also indicates a $3,619 balance is due and that the loan is not in default.

The document does not indicate the loan's term or interest rate, or why Singleton needed the loan.

The 2010 return also indicates:

The organization's revenue declined for the second consecutive year, from $428,336 to $303,579 -- a dip of nearly 30 percent.

Strive had an operating loss of more than $28,000.

Strive paid more than $4,400 in bank and credit card fees and more than $8,100 in tax penalties and interest, expenses that did not appear in the 2009 return.

Strive lost more than $8,000 on its major fundraising events.

The balance on "secured mortgages and notes payable to unrelated third parties" increased from $150,000 to $167,000. Strive's office space at Hilton Head High was provided free of charge; Gardo has indicated this expense reflected lines of credit from several local banks, which he would not identify.

Strive must file a 2011 tax return before it can officially dissolve.

Follow reporter Rachel Heaton at twitter.com/HomeroomBft.