Black Lives Matter Risks Going Bankrupt

Financial disclosures indicate that the Black Lives Matter Global Network Foundation (BLMGNF) is at risk of going bankrupt after reporting an $8.5 million deficit for the previous year.

The foundation’s investment accounts also experienced a significant decline of nearly $10 million, as revealed in its most recent tax return. The organization, which was founded by activists of the Black Lives Matter movement, faced a year of missteps and a notable decrease in donations.

The latest Form 990 of the BLMGNF shows that a loss of over $961,000 was recorded from a securities sale of $172,000. This information suggests a challenging year for the foundation, accompanied by a sharp drop in contributions.

While donations amounted to approximately $9.3 million between July 1, 2021, and June 30, 2022, net assets stood at around $30 million. In comparison, the organization reported donations of nearly $77 million and net assets of $42 million during the period from July 1, 2020, to June 30, 2021, indicating a substantial decline in both categories.

Brian Mittendorf, an accounting professor at Ohio State University, highlighted that the financials indicate the organization was spending down some of the windfall it received in the previous fiscal year. However, he emphasized that this deficit does not necessarily imply impending insolvency.

To ensure sustainability, the BLMGNF would need to adjust its spending levels and reduce its footprint if revenues continue to remain low.

Although the overall investment losses align with the general market trend during that period, concerns arise regarding the significant loss on disposed assets.

The foundation had previously shared that it invested approximately $32 million, about a third of the $90 million it received as donations during the racial justice protests following the killing of George Floyd in 2020.

One of the challenges the organization faced was its inability to handle the influx of contributions following George Floyd’s murder, as acknowledged by Black Lives Matter co-founder Patrisse Cullors. In 2021, Cullors stepped down as executive director amid controversies surrounding the foundation’s finances and her personal wealth.

While she denied any misuse of donations, the latest tax forms reveal that contracts to her family members continued. Her brother, Paul Cullors, and his companies were paid $1.6 million for professional security services, while Shalomyah Bowers, the foundation’s board secretary, received nearly $1.7 million for management and consulting services.

The financial disclosures have raised concerns, particularly regarding the substantial transactions with insiders, which may present conflicts of interest.

The foundation is currently facing a lawsuit filed by Black Lives Matter Grassroots, representing local BLM chapters, accusing Bowers of treating the foundation as his personal piggy bank and misappropriating over $10 million in donations for personal use.

As the BLMGNF grapples with its financial challenges and potential legal ramifications, it remains to be seen how the organization will address the deficit and rebuild its financial stability while staying true to its mission of advocating for racial justice and equality.