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Tax records omit Gullah tour income

Beulah White, executive director of Five Rivers Community Development Corp., used the nonprofit agency's money to help pay for a tour she operates that promotes Gullah culture although she did not claim revenue from that tour on Five Rivers' federal tax returns, according to a review of the agency's documents by The Sun News.

Nonprofit experts said Monday that might be a violation of federal tax laws.

"If they are receiving money for the tours, that revenue should be reflected on the 990 [tax form]," said Bruce Hopkins, a tax law expert and author of several financial handbooks for nonprofits groups.

White did not respond to questions e-mailed and faxed to her office and could not be reached for comment.

Sam Livingston, president of Five Rivers' board of directors, said the board will begin a review of the agency's finances during its meeting at 6 tonight in Georgetown.

Five Rivers gets about two-thirds of its money from state and federal grants, which are funded by tax dollars. The rest of its money comes from foundations, private contributions and other sources.

Documents show White authorized at least four check payments totaling $6,050.40 from Five Rivers' bank account in 2002 and 2003 to pay expenses for the Southern Odyssey Tour. The tour is a Gullah educational program White operates with her daughter, Dayo Smith, who is Five Rivers' chief financial officer.

The Gullah are an African-American population in the Lowcountry who are descendants of African slaves.

Teaching Gullah culture and heritage is not among the programs Five Rivers says on its federal tax forms that it provides. The Internal Revenue Service requires nonprofits to describe all of their programs each year on tax forms.

Five Rivers' stated purpose is to develop affordable housing and enhance economic development for low- to middle-income residents of Georgetown County.

The people who participated in the Southern Odyssey Tours for which Five Rivers paid expenses were college students from Iowa.

It is not illegal for nonprofit agencies to make money from ventures that have nothing to do with their stated purpose, according to Beth Singletary, finance manager for the S.C. Association of Nonprofit Organizations.

That money, however, has to be reported as "unrelated business income" on the agency's federal tax return and the agency must pay taxes on the income.

Five Rivers has not reported any "unrelated business income" on any of its tax returns since the agency was founded in September 1995.

"Whether the income is part of an agency's regular operation or not, it would have to be reported," said Eric Mohn, a Columbia lawyer who specializes in nonprofit tax law.

Five Rivers' tax forms do not indicate any money was spent on the Southern Odyssey Tour, but documents included in Five Rivers' travel records show money was spent on hotel rooms and food for tour participants in 2002 and 2003.

It is not clear whether more of Five Rivers' money was spent on the Southern Odyssey Tour because White has not allowed access to all the records The Sun News has requested under the S.C. Freedom of Information Act.

According to the travel records, White used Five Rivers' money in March 2002 to pay a $2,062.50 bill at The Jameson Inn of Georgetown for a group of Southern Odyssey Tour participants from Buena Vista University in Storm Lake, Iowa.

White also spent $700 on food for that group at a grocery store and restaurants in Georgetown, Garden City Beach and Charleston. That money also included a $120 cash payment White gave to the group for meals on their trip back to Iowa.

White used $3,287.90 of the agency's money in March 2003 to pay for rooms at The Jameson Inn for another Buena Vista University group that was here for the Southern Odyssey Tour.

In a March 2003 letter, White told Leon Williams, director of intercultural studies at the university, that the 4½-day Southern Odyssey Tour would cost his group of nine students and two adults $7,700.

Williams could not be reached for comment Monday.

There is no record in the agency's travel documents showing that the $7,700 payment was deposited into the agency's bank account.

Revenue from such a payment also is not shown on Five Rivers' federal tax return.

The only revenue besides public money that Five Rivers showed on its 2003 tax return was $15,000 from the construction and sale of affordable housing, $595 from interest on savings and $80 in unspecified miscellaneous income.