November 2, 2019; Valley News
Since 2015, the general manager of the Upper Valley Nighthawks, Noah Crane, has also been the chief fundraiser for the New Hampshire-based baseball team under the auspices of its 501c3 status. Launching the team has been what Crane has termed a “labor of love,” involving not just love but $300,000 to $400,000 in startup costs, which have included charitable contributions from businesses, philanthropic organizations, and individuals, as well as much time and effort on the part of the Crane family. The Nighthawks are part of the 13-team New England Collegiate Baseball League (NECBL), and the team was shepherded through its launch process by Crane, a veteran of high school and collegiate sports in Vermont and New Hampshire.
Raising funds for a nonprofit is not easy work, and in order to cover the costs of launching the team, he established a nonprofit foundation, which has been common practice for the NECBL and the other member teams. Establishing 501c3 status was important to establishing a revenue stream from philanthropic gifts, which, when given to a 501c3, are also of course tax-deductible, a selling point to donors.
Crane highlighted that this was particularly a tough task for the Nighthawks, noting, “We aren’t a food bank. We don’t solve homelessness. We play baseball. That’s the trickiest part…We don’t look like a nonprofit.” To counter that issue, Crane stressed that the Nighthawks are a benefit to the community, and that as a platform for philanthropic fundraising, the team’s nonprofit foundation could support youth baseball programs and other programs and areas in the Upper Valley of Vermont. As a result of this pitch, Crane secured donations from the Jack and Dorothy Byrne Foundation of Hanover, New Hampshire, and Mascoma Bank of Lebanon, New Hampshire.
Despite this auspicious beginning, however, the Nighthawks had their nonprofit status revoked by the IRS in May 2019, the result of failing to file their Form 990 for the past three years. Without the Form 990 filings, of course, the public is unable to see how the nonprofit foundation connected to the Nighthawks has been spending its money. And since the Valley News initially reported on this, they have encountered quite a bit of obfuscation around why these federally required forms have not been filed and why the Nighthawks have still been fundraising as though they are tax exempt.
In late September, Crane commented that the team “[operated] under the umbrella of the [NECBL]” and that they “don’t need to have [their own] 501c3.” This makes one question why the team created a nonprofit if they “didn’t need it.” Three months after revocation, the Nighthawks were still promoting themselves on their Facebook page as a nonprofit, urging fans to share a post about National Nonprofit Day and Mascoma Bank’s competition to win a $500 donation (they did not).
Last week, Crane told the Valley News that he did not know until August that the team’s nonprofit status had been revoked, and that it has employed a CPA to “fix our issues,” having the 990s “redone.” It is striking that the general manager of a team would not know that its nonprofit status had been revoked until three months after it happened.
On September 25th, Crane said he sent the foundation’s Form 990s to the league office, but NECBL Commissioner Sean McGrath says he has not yet received this paperwork. The Valley News notes that every other NECBL team has filed Form 990s regularly in recent years. Elizabeth Schmidt, a professor at the University of Massachusetts-Amherst’s School of Public Policy, who specializes in nonprofits and is also an attorney, noted that all the teams in the NECBL are legally separate nonprofits. She adds if they are not registered properly as 501c3 entities, they cannot make that claim while fundraising. Again, there seems to be confusion around the claims that Crane and/or the team are making with regard to nonprofit status while fundraising and whether the Form 990s have been filed.
The Valley News reached out to the two major donors named here, Mascoma Bank and the Byrne Foundation, to find out if they were aware of the team losing its nonprofit status. A spokeswoman at Mascoma Bank would not comment, and their Chief Marketing Officer, Samantha Pause, would not comment on how much money the bank had contributed. The Byrne Foundation would not return the News’s calls, though its 990 revealed that the Foundation had made a $15,000 contribution in 2018.
Adding to the challenges is that the Nighthawks foundation has not registered with the charitable trust unit of the New Hampshire Attorney General’s Office, which, as a New Hampshire entity, it must do. This indicates that New Hampshire has never recognized the team as a charity, despite the office’s outreach attempts to the team to get them to file proper paperwork. While this matter may be quickly resolved, the problems with the IRS could take up to 15 months to fix. The Valley News was largely unable to get the Nighthawks Baseball Foundation’s board to comment, aside from Natasha Payton, who was listed as board treasurer in a 2017 registration application sent to the attorney general’s charitable trust unit. Yet, when the Valley News spoke with Payton, her only comment was to deny that she was ever the board’s treasurer.
Crane now claims the foundation is now properly registered with the state, and that IRS issues will be resolved “shortly,” though right now the team is not legally tax exempt. Crane claims the team can still accept donations through the NECBL, but the team’s legal status remains murky. It is troubling that an organization which has received tax benefits and donations by claiming to be a nonprofit has not in fact kept up its end of the bargain by keeping current and accurate paperwork, as well as providing information to the public about how the funds are being spent.—Kristen Munnelly