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Small Victories has written, “Why do pregnancy centers that collect OVER $1 million per year and pay their directors $80,000 per year exist? Because they are “window dressers”. They have lost their focus and have fallen in love with making money.” This is from someone that shows compensation of $160,000 in ONE YEAR. Let that sink in……
Using their own words, the people they criticize pay their officer 8% of the total money. However, the bonus money alone for Small Victories is over 75% of what they took in for 2015! How many people that give to them have ANY idea about this? And what would be their response if they knew the truth??
We have previously shown that there was no way the primary officers of Small Victories could have made ends meet on just a waiter’s salary link to financial fraud page. Now that they are disclosing paying themselves, and showing how much it really is, it might go a long way to explaining why they habitually attack so many other pro-life groups in such a territorial way. It might explain some of the outrageous behavior in the past. See Incidents.
A big question this leads to is why have they disclosed this information now? And while we don’t know for sure, the next issue we will look at points us to a possible explanation. The next item we will look at is the unpaid taxes they are reporting.
What Is Going On with All of the Unpaid Taxes?
Small Victories employs people and has to pay payroll taxes like a regular business, and they did pay some. However, they show that in addition to the $11,000 they paid during the year, they OWE an additional $23,973 in payroll taxes. Here is the link: SCHEDULE D, PAGE 3 PART X. Please note that a tax owed but not yet paid is called a “liability”.
And what also seems odd is that the amount they owe is roughly TWICE what they paid in 2015. So they may owe another two years of payroll taxes for some reason.
For comparison purposes, they paid $11,000 in payroll taxes on $128,600 in payroll, we are estimating the $23,973 in back taxes are based on roughly $260,000 in additional wages that were already paid (please see below for details*). We would like to know when they paid out the additional $260,000 to their officers and employees? And how many years does this cover? And why have they not disclosed this in the past? And why have they not paid their taxes on this in the past? Some might even say that this would qualify Small Victories to be TAX CHEATS. And in case anyone doubts this analysis, why would someone owe payroll taxes if there were no payroll? Why would they report owing payroll taxes if there was no payroll to tax?
This also means that Small Victories started the year off in 2016 in the hole, owing $23,973 in payroll taxes before receiving their first dime of support. Can you imagine them telling people that they need money for the ministry, and will start helping people just as soon as they pay off over $20,000 in taxes? That might not go over to well!
There is something else very strange reported in the section that shows the owed payroll taxes. Right below that is something called “personal” and it is shown as a negative liability. What is a negative liability? Since a positive liability is money that the ministry owes to someone else, a negative liability is something owed TO the ministry. In this case it is for $13,087 and it is PERSONAL. This could be money that the officers “borrowed” from the ministry and have to pay back. Or perhaps they were audited, and were paid in previous years “under the table”, but the authorities have caught up to them, and now they have to pay their share of tax withholdings back to Small Victories. Small Victories now would also owe the tax money to the IRS. The explanation of an IRS audit might explain a lot.
This would explain why for years and years of showing no payments, they now suddenly start reporting salaries to their own officers. And this after all of the harsh criticism of other groups for taking a salary! They have a long history of not showing transparency, and the possibility that they were legally forced to do so is very plausible. Why else would they show their President raking in $160,000 in one year?
This explanation could also explain the bonus of $67,500 paid to their President. The bonus was not included in the actual expenses paid out during the year, but was included in the W-2 income section of the return. Our guess is that the IRS forced them to claim the income as taxable on their W-2 because they took the money for themselves in years past. Additionally, money from other ministries was given to them from a "Related entity", which is why they had to disclose a second amount of $67,500 given to their President as we have already shown here. We cannot prove exactly what happened, but this explanation makes the most sense, especially considering at least one other pro-life entity they control (Small Miracles) was suddenly shut down. (Small Miracles is an entity very similar to Small Victories, run by the same family, and we have written about them previously (See Financial Fraud .)
They are now showing that they have been involuntarily dissolved by the IL Secretary of State on June 10, 2016. Please see below for several possible reasons for this
**SCREENSHOT OF SOS WEBSITE SHOWING THIS
There is also no final tax return for Small Miracles at this time on Guidestar, and that should show what they did with the final assets of the charity.
Highland Right to Life (also largely, if not completely controlled by the same people) is now shown as NOT in good standing as of December 2016:
SCREENSHOT OF THE SAME.
Another MAJOR change this year is they are reporting the ministry now owns $500,000 in land and another $800,000 asset amount, presumably real estate.
You can see it here: LINK PART VI FOR LAND BUILDINGS AND EQUIPMENT. We believe the $800,000 to be land because of the section on the return that shows the ministry has a rental property loss of $12,506! Here is the section that shows the rental property activity:
LINK TO PART VIII Other revenue
Does anyone know anything about this? We don’t think it could be the old ultrasound van they have since the value for that was probably under $50,000 when they purchased it. Have they said what they are going to do with this land and building? Perhaps they should sell it so the ministry can pay for its back taxes? Oh yes, and this appears on their tax return without being contributed this year, or in any prior year. And if somebody simply donated this to them, then why don’t they show it as a contribution?? It doesn’t show up as a contribution in 2015 or in any other year prior to that. This money trail just gets stranger and stranger…………..
President of Small Victories Scores Six Figure Salary!!
After years of bashing other pro-life groups for paying their leaders a salary, Small Victories is now doing the same thing in grand fashion, showing $160,000 in compensation for their President on their 2015 tax return! (Please note that the tax return they file is available to the public for inspection and you can see a copy here 2015 SMALL VICTORIES TAX RETURN .
The $160,000 also includes $67,500 in BONUS money!!
You can see the proof for yourself here:
Page 7 2015 990 Return
Page 27 (note that this section does not include money from “related organizations”)
The $160,000 is broken down into three amounts: $67,500 in bonus money from Small Victories, $67,500 from a related organization (possibly another charity controlled by the same people that run Small Victories), and $25,000 in base pay. Considering that Small Victories only took in $83,125 contributions for the year, we wonder how they could justify giving so much money to their President?
PAGE 1 2015 Return
And what did she do to get such a large bonus? Do they offer some kind of incentive program that would justify giving someone that large of a percentage of what they take in during the year? How can someone think this is reasonable?
Now along with the $1,300,000 in assets, they also have a $447,419 LOAN:
Page 11, part 10.
And most loans require loan payments! A loan payment of this amount would come in at roughly $2,100/month on a 30-year loan, not including escrows. That would means that Small Victories has to spend around $25,000 per year in LOAN PAYMENTS on this. That also comes out to about 30% of what they take in per year for the ministry!
With all of these unusual issues with their finances, including so much ministry money going to their president, this raises some serious red flags. There are numerous, reputable pro-life ministries to donate to besides one that is so questionable. And if the people that run this ministry are in it largely for the money, have ongoing taxes to pay like everyone else, have loan payments to make, and still owe back taxes, we think it would very difficult for them to continue. Perhaps this source of funds for them has dried up, and now it is time to move on?
*Please note that Employers pay payroll taxes - this is not the same as when an individual pays income taxes. Employers in Illinois pay roughly 9% in payroll taxes over and above what they pay to their employees. This is mainly from matching social security and Medicare (7.65%) and a little for state and federal unemployment taxes. (Note that amounts can change from person to person based on maximum amounts for each tax.) If you take the $23,973 in unpaid taxes and divide by 9%, you get over $260,000 in estimated payroll the taxes may have been based on.
**The grounds for judicial dissolution of a closely held Illinois corporation
are found at 805 ILCS 5/12.56, which provides that a court may dissolve a
(a) there is director or shareholder deadlock;
(b) those controlling the corporation have acted in a manner that is
illegal, oppressive, or fraudulent with respect to the petitioning
(c) the corporate assets have been misapplied or wasted.