Rayce Rollins finally got a chance to do a deep dive into the Black Lives Matter Federal Tax Return, FORM 990, for the year ended 06/30/2021. Based on his review, he doesn't think BLM warrants an episode on American Greed for blatant corruption, but mistakes were made due to a lack of governance and systems. Here are a few takeaways that could help other nonprofits avoid financial scrutiny.

1) BLM had only one voting board member. This was the root of the problem -BLM was void of accountability, governance, and structure simply because there was no functioning board in place.

2) BLM received $80 Million in grants and contributions with only 2 employees (one of whom received a 140K severance package and didn't work at all). How do you run a foundation at this level with no board, no board meetings, 1 active staff member, and 49K volunteers?

3) BLM donated $26 Million (approximately 30% of contribution revenue to grassroots organizations). The best practice here is to have a grant process in place and a way to measure outcomes. Grantees have to be vetted.

4) Shalomyah Bowers was a non-voting board member and the largest independent contractor at $2.1 Million. BLM paid Patrisse Cullors' brother $800K for security services and 940K to a company owned by her son's father. All of these transactions are inappropriate. The best practice is to use RFPs for contracts that exceed a certain threshold to ensure transparency.

5) The most questionable transaction is documented on Schedule R, which is the $6 million real estate purchase in LA. Traditionally, real estate is a wonderful investment for non-profits because they don't have to pay transfer taxes or real estate taxes. Universities and churches are some of the largest land owners in the world. The problem here is that BLM purchased a residence (a mansion in LA) instead of a commercial property that could be used to run operations. The easy fix here is to divest the mansion, and buy a real creator studio / co-working space/office space, etc.