Al Sharpton’s ACORN wannabe group in financial trouble

Matthew Vadum Senior Vice President, Capital Research Center
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The Rev. Al Sharpton’s community organizing group is in desperate financial straits, new research suggests.

The left-wing National Action Network Inc., headquartered in New York City’s Harlem neighborhood, owes at least $1,556,059 in federal taxes and $108,489 in New York taxes, according to the Nexis tax liens database. Tax agencies typically file tax liens only after taxes have become significantly overdue and other collection methods have failed.

Rachel Noerdlinger, executive vice president of communications for the 19-year-old racial grievance group, said rumors of the group’s imminent demise were greatly exaggerated.

“NAN faced tremendous challenges in 2007 and 2008 but after reaching an agreement with state and federal tax authorities the problems have been resolved and NAN will present a very robust report where the organization is financially now and moving forward at our national convention in April,” she said in an e-mail.

Noerdlinger’s comments came Monday after ACORN, one of NAN’s competitors, announced it was closing its doors on April 1. Founded in 1970, ACORN had been the leading poor people’s group in America. ACORN, whose funding dried up in the fall after hidden-camera videos showed its employees encouraging tax evasion and child prostitution, pioneered in-your-face techniques for extracting grants from corporate America that NAN eagerly copied.

The flamboyant, scandal-prone Sharpton, who sought the Democratic presidential nomination in 2004, is known for his taste for luxury and for his skill in ducking creditors. He once bragged to the New York Times that he didn’t own any business suits but had “access” to some. He would admit only to owning his wristwatch and wedding ring. His group ran up huge bills with a limousine service in New Jersey and had a $51,939 civil judgment entered against it in 2003.

Critics say Sharpton is an incendiary racial demagogue who is among the most polarizing figures in the nation. He boasts that he stopped Rush Limbaugh from buying a stake in an NFL team and (temporarily) ran Don Imus off the airwaves for racially insensitive marks. He became a national figure in 1987 by participating in the Tawana Brawley case, a racially charged gang rape hoax. Sharpton falsely accused assistant prosecutor Steve Pagones of participating in the gang rape. Pagones won a libel judgment against Sharpton.

On its Web site NAN describes itself as “one of the leading civil rights organizations in the nation.” NAN says it “works within the spirit and tradition of Dr. Martin Luther King, Jr. to promote a modern civil rights agenda that includes the fight for social justice and one standard of justice and decency for all people regardless of race, religion, national origin and gender.”

Strangely, the tax returns of Sharpton’s group covering 2000, 2001 and 2002 are not publicly available at, the leading national repository of nonprofit tax returns.

But those tax returns that are available tell the story of a financially troubled organization that may be teetering on the edge of bankruptcy.

In 2007 NAN took in $2,379,376 in revenue but spent $2,481,092, generating an annual deficit of $101,716, according its most recent publicly available tax return. It ended that year with a negative fund balance of $2,075,179.

NAN tax returns show that at the end of 2007 it owed $1,848,799 in “payroll taxes and related interest & penalties,” which is down from $1,954,200 in 2006. This is ironic because payroll taxes typically fund the welfare state programs that groups like NAN campaign to expand.

The payroll tax-related debt has been growing for years. Tax returns show the figure was $1,553,833 in 2005, $1,255,218 in 2004, and $939,300 in 2003.

It also seems NAN’s financial problems have forced Sharpton to forego his salary as president and chief executive. Tax returns show he was paid a salary of $90,000 in 1999, and of $93,636 in 2003 and again in 2004. In 2005 his salary dropped to $72,036 and the next year it plunged to $4,860. He received a salary of zero in 2007.

NAN is classified by the IRS as a tax-exempt 501(c)(4) advocacy organization. Donations to it and not tax-deductible and it generally does not have to disclose its donors.

Information on grants made to NAN by foundations is hard to come by. The group reported in its 1998 tax return receiving $1,352,600 in grants from 1995 through 1998.

The largest single grant on record grant came from the Altus One Fund ($100,000 in 2007). Other grants appearing in philanthropy databases came from Kiss Kares Fund ($10,000 since 2004), Charles Cohn Foundation ($3,000 in 2005), Brackthorn Foundation ($2000 in 2001), and IFF Hummingbird Foundation ($270 in 2003).

Sponsors of last year’s NAN convention included Colgate-Palmolive, Comcast, Home Depot, National Education Association, and the Service Employees International Union.

This year a sponsor can spend $100,000 to become a “Justice Partner.” On-site benefits include the opportunity to address the convention and to host an exhibit booth.