LGBT nonprofit director reportedly used donor money for lavish lifestyle
$15,000 went for visit to Provincetown, Massachusetts
The executive director of a large LGBT nonprofit allegedly spent the organization’s money on a lavish personal lifestyle, The New York Times reported on Thursday.
Sarah Kate Ellis, chief executive of GLAAD, an LGBT advocacy group, spent large sums of donor’s money on expenses such as remodeling her home office with a chandelier, renting a Cape Cod property, first class flights and luxury hotels, according to the NYT’s review of expense reports from January 2022 to June 2023. The expenses may be in violation of both the organization’s guidelines and Internal Revenue Service (IRS) rules, legal experts told the NYT.
The spending was “a potentially abusive use of charitable funds that would be surprising and insulting to a lot of their donors,” Michael West, a New York Council of Nonprofits lawyer, told the NYT.
“It appears she may have fallen into the trap of excess,” he continued.
Ellis was provided up to $20,000 in her renewed 2022 contract to renovate her home office, of which she spent approximately $18,000 to redo the top floor of her Long Island house, according to the NYT. The expenses were for television appearances and virtual events, GLAAD spokesperson Richard Ferraro told the outlet.
Ellis had expensed approximately $15,000, before the new 2022 contract took effect, on a three-week stay in Provincetown, Massachusetts, according to the NYT. She also reportedly made a $14,636 down payment for a rental in the town for the next summer.
Ferraro told the NYT that it was important for Ellis to stay in the town during the summer months to “raise millions of dollars during a traditionally slow time of year for fund-raising.”
She also took many first-class flights and stayed in luxury hotels like the Waldorf Astoria, where she spent over $6,000 for a three-night stay in October 2022, according to bills published by the NYT. She also reportedly spent $3,120 on a luxury limousine service in December 2022.
The new contract included a $441,000 base salary with a $150,000 signing bonus, according to the NYT. With potential bonuses, the new contract made Ellis eligible for up to approximately $700,000 to $1.3 million a year.
The IRS does not allow excessive spending on executive pay that is deemed unfair or not comparable to other executives at similar organizations, legal experts told the NYT. The board of directors can sometimes pay high for those who they deem are highly skilled or valuable to the organization, but if the IRS or other regulators determine that the amount is excessive, it could result in the removal of the tax-exempt status or other financial penalties.
Ohio State University Fisher College of Business professor Brian Mittendorf told the NYT that Ellis’ package looked “much more like a pay package of a for-profit executive and less like that of a person directing a charity.”
GLAAD has focused much of its advocacy efforts on being a “watchdog” on media outlets, according to the NYT. GLAAD has accused the outlet in the past of being “inaccurate and biased” when covering transgender issues, but the NYT defends its past work.
GLAAD did not immediately respond to the Daily Caller News Foundation’s request for comment.
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