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Pride flag funding problem?

City auditor to send complaint to state attorney general

The Hillcrest Community Foundation, the group in charge of collecting donations for Hillcrest's Pride Flag monument, may soon be the subject of an investigation by California's attorney general's office.

According to an email obtained by the Reader, the city auditor's office is sending a complaint to the attorney general's Charitable Trusts Section for "soliciting donations while it was suspended with the Secretary of State, had no bank account in place, and had no meetings for several years."

Fundraising for the monument began in 2011. At the time, the Hillcrest Business Association, the group that administers the business improvement district was collecting the donations and in charge of organizing fundraising events such as the Amazing High Heel Race. But questions emerged regarding whether the business association is allowed to collect donations for charities as well as if construction and maintenance of the monument benefits businesses in Hillcrest's designated business district.

In recent months, some community members have accused the association of back-room dealing and changing the association's bylaws in order to keep troublemakers from gaining a seat on the board of directors.

News of a potential investigation only complicates matters.

It is hard to deny the Hillcrest Community Foundation's involvement in the charity drive.

In 2013, the *San Diego Gay and Lesbian News,* whose publisher Johnathan Hale serves as a boardmember for the business association, printed an article soliciting donations for the Pride Flag monument. The article directed potential donors to make checks out to the Hillcrest Community Foundation.

That was problematic for several reasons. As previously mentioned, the state's franchise tax board had suspended the organization for not filing all of the required paperwork. The foundation did, however, file renewals every year since 2003, listing their assets and revenue as zero for all years.

Benjamin Nicholls, Hillcrest Business Association's interim president, says the decision to put the foundation in charge was a mistake, one that was quickly addressed.

"Originally the Hillcrest Business Association talked about partnering with Hillcrest Community Foundation,” said Nicholls. “Folks would make donations directly to the foundation as the Hillcrest Community Foundation was at one point a 501(c)3. But the foundation had been dormant for six or seven years and they were in the middle of reviving the organization, which complicated things in regards to donations. So the donations went straight to the Hillcrest Business Association."

Doing so meant that donors would not be allowed to claim the donations to the IRS, due to the state laws prohibiting corporations from accepting charitable trusts.

It was a minor technicality, according to Nicholls. He was not aware of any complaints, and the donors were well aware of the situation.

Glenn Younger, the president of the Hillcrest Community Foundation, says the state has the paperwork. Regardless, the foundation didn't collect any donations.

"Looks like the state is slow on the changes to their own database of information," writes Younger in an August 12 email.

"As [Nicholls] mentioned we have not been involved in any fundraising yet. No money in or out. A total voluntary effort so far.”

Mat Wahlstrom remembers it differently.

Wahlstrom, co-owner of Roberts Electric Service, says he wrote his check out to the Hillcrest Community Foundation. Two months later the check was cashed, presumably by the Hillcrest Business Association. He was then informed that he could not claim the donation on his taxes.

"If in fact no one complained, perhaps it is because, unless they were at the April 15 [business association] board meeting, no one was told. Nicholls was not at this meeting or even involved in the [Hillcrest Business Association] yet at this point. But you've got to give him credit: he never varies from his strategy of attempting to isolate critics in order to dismiss criticism."

Wahlstrom raised the issue to mayor Kevin Faulconer during a meet-and-greet event in Hillcrest.

"Did we complain? Yes, we did, and very publicly. Which reminds me, four months have passed and still haven't heard from Hizzoner about our plea for help."

Nicholls denies any wrongdoing. "We can show all the money that went to the pride flag. Our role is to promote and improve Hillcrest's business district, We feel the monument definitely fits within the scope of what we are called to do. Hillcrest is the heart of San Diego's LGBT community and recognizing it as such is important for everyone, most of all the business community."

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The Hillcrest Community Foundation, the group in charge of collecting donations for Hillcrest's Pride Flag monument, may soon be the subject of an investigation by California's attorney general's office.

According to an email obtained by the Reader, the city auditor's office is sending a complaint to the attorney general's Charitable Trusts Section for "soliciting donations while it was suspended with the Secretary of State, had no bank account in place, and had no meetings for several years."

Fundraising for the monument began in 2011. At the time, the Hillcrest Business Association, the group that administers the business improvement district was collecting the donations and in charge of organizing fundraising events such as the Amazing High Heel Race. But questions emerged regarding whether the business association is allowed to collect donations for charities as well as if construction and maintenance of the monument benefits businesses in Hillcrest's designated business district.

In recent months, some community members have accused the association of back-room dealing and changing the association's bylaws in order to keep troublemakers from gaining a seat on the board of directors.

News of a potential investigation only complicates matters.

It is hard to deny the Hillcrest Community Foundation's involvement in the charity drive.

In 2013, the *San Diego Gay and Lesbian News,* whose publisher Johnathan Hale serves as a boardmember for the business association, printed an article soliciting donations for the Pride Flag monument. The article directed potential donors to make checks out to the Hillcrest Community Foundation.

That was problematic for several reasons. As previously mentioned, the state's franchise tax board had suspended the organization for not filing all of the required paperwork. The foundation did, however, file renewals every year since 2003, listing their assets and revenue as zero for all years.

Benjamin Nicholls, Hillcrest Business Association's interim president, says the decision to put the foundation in charge was a mistake, one that was quickly addressed.

"Originally the Hillcrest Business Association talked about partnering with Hillcrest Community Foundation,” said Nicholls. “Folks would make donations directly to the foundation as the Hillcrest Community Foundation was at one point a 501(c)3. But the foundation had been dormant for six or seven years and they were in the middle of reviving the organization, which complicated things in regards to donations. So the donations went straight to the Hillcrest Business Association."

Doing so meant that donors would not be allowed to claim the donations to the IRS, due to the state laws prohibiting corporations from accepting charitable trusts.

It was a minor technicality, according to Nicholls. He was not aware of any complaints, and the donors were well aware of the situation.

Glenn Younger, the president of the Hillcrest Community Foundation, says the state has the paperwork. Regardless, the foundation didn't collect any donations.

"Looks like the state is slow on the changes to their own database of information," writes Younger in an August 12 email.

"As [Nicholls] mentioned we have not been involved in any fundraising yet. No money in or out. A total voluntary effort so far.”

Mat Wahlstrom remembers it differently.

Wahlstrom, co-owner of Roberts Electric Service, says he wrote his check out to the Hillcrest Community Foundation. Two months later the check was cashed, presumably by the Hillcrest Business Association. He was then informed that he could not claim the donation on his taxes.

"If in fact no one complained, perhaps it is because, unless they were at the April 15 [business association] board meeting, no one was told. Nicholls was not at this meeting or even involved in the [Hillcrest Business Association] yet at this point. But you've got to give him credit: he never varies from his strategy of attempting to isolate critics in order to dismiss criticism."

Wahlstrom raised the issue to mayor Kevin Faulconer during a meet-and-greet event in Hillcrest.

"Did we complain? Yes, we did, and very publicly. Which reminds me, four months have passed and still haven't heard from Hizzoner about our plea for help."

Nicholls denies any wrongdoing. "We can show all the money that went to the pride flag. Our role is to promote and improve Hillcrest's business district, We feel the monument definitely fits within the scope of what we are called to do. Hillcrest is the heart of San Diego's LGBT community and recognizing it as such is important for everyone, most of all the business community."

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Comments
13

Question maybe somebody can answer: Why is the US Flag NOT flown above the Rainbow Pride Flag since the US flag is supposed to be flown upper most on every flag pole in the USA?

Aug. 14, 2014

Here's why: "When it is displayed from the same flagpole with another flag, the flag of the United States must always be at the top." But there are NOT two flags on that flagpole.

Aug. 14, 2014

So simple yet so evasive. Who knew?

Aug. 15, 2014

dwbat That is my point, the US flag should be flown above all other flags on every flag pole, so this pole should have a US flag flown above the Pride flag .

Aug. 15, 2014

You still don't get it. NO, not every flag pole needs a US flag on it. Not every flag pole requires two flags. This is not rocket science to understand.

Aug. 15, 2014

dwbat I looked it up since I'm curious and this is what I found; http://www.ushistory.org/betsy/flagetiq.html

None

Aug. 17, 2014

founder/captd here's the question that needs to be answered. Are the Hillcrest Pride Flag and the US flag flown on the same standard? If the Hillcrest Pride Flag and the US flag are on the same standard, then the US flag has to be flown higher. Or if the Hillcrest Pride Flag and the US flag are flown together but on separate standards, the the US flag has to be flown higher. All of the video and pics I have seen show a single flag standard with only the Hillcrest Pride Flag. If that continues to be the case, your pic above does not even apply You should read the US code: 4 U.S.C. § 1

here's video of the flag: http://www.youtube.com/watch?v=fHfOwi...

Aug. 17, 2014

danfogel - I've been told by many that every flag pole must include the American Flag unless there are separate flag poles, that is why they question the Pride flag being flown alone (no pun intended) on its pole. Got a link that explains that?

Aug. 20, 2014

I do, but you can look it up for yourself. It's called the United States Flag Code, 4 U.S.C. § 1, as I listed in the above comment you replied to. There is nothing in the code that mandates the US flag be flown on every flag pole, nor is it implied anywhere within the codes. Believe it, don't believe it, interpret it in any manner you wish.

Aug. 20, 2014

Thanks, I did not see anything about not having to fly a US flag on a Flag pole at that link. If you can find something about that I'd be happy to share it around.

Aug. 21, 2014

I don't have any questions about the proper method in which to properly display the US flag, so I have no reason to " find something about that". If you're that interested, or that concerned that Hillcrest may be in violation of Federal law, the feel free to keep looking yourself. BTW, in US v. Eichman, SCOTUS found that even the failing to follow the US flag code would be a violation of Federal law, to enforce those laws with punitive action would be a violation of First Amendment right to freedom of speech.. Just in case you're interested, that is.

Aug. 21, 2014

Right, Dan. This is really simple to grasp, so I don't know why two posters here are struggling so much to understand. We explained it quite well--days ago.

Aug. 21, 2014

dwbat & danfogel It is just that I have had many Vets point this flag issue out to me and I want to get informed so that I could then spread what I had learned. Thanks to you both.

Aug. 23, 2014

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