The Gay and Lesbian Alliance Against Defamation (GLAAD) has fallen under scrutiny after an exposé revealed allegations of "lavish" spending at the prominent LGBTQ rights group, and claims the nonprofit may have violated IRS rules.
A report from The New York Times detailed GLAAD's extravagant spending for CEO Sarah Kate Ellis, which raised alarms from other employees at the non-profit, particularly former CFO Emily Plauché.
The Times pointed to Ellis' documented habit of flying first class, staying at luxury hotels, enjoying high-end car services, and her annual compensation package that could range from around $700,000 to as much $1.3 million, which some experts said was more in line with a for-profit company than for a non-profit, especially of GLAAD's size.
GLAAD also grants Ellis a $25,000 allowance to rent a home in Cape Cod for the summer, and provided the CEO up to $20,000 to renovate her home office.
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Ellis spent at least $18,000 on the renovations, the Times reported, but GLAAD did not cite the expenses as income for their chief executive, meaning she did not pay taxes on the compensation, which the outlet says might have violated IRS rules.
Michael West, a lawyer who advises charities at the New York Council of Nonprofits, told the Times that GLAAD's pattern of spending on Ellis' represents "a potentially abusive use of charitable funds that would be surprising and insulting to a lot of their donors," adding, "It appears she may have fallen into the trap of excess."
Some of GLAAD's major donors have included Disney, Netflix and Google.
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GLAAD disputes that it violated any tax rules, telling the Times it consulted with attorneys who advised the organization not to count the renovations as income, because the renovations were work-related. The group also defended Ellis, who after becoming CEO in 2014, was able to quintuple the organization's revenue to $19 million by 2022.
FOX Business has reached out to GLAAD for comment.
Liz Jenkins, a chairwoman for the organization, told the Times, "The board and I stand firmly behind Sarah Kate Ellis, with respect and appreciation for how she and her team are leading the movement at a time when our community is under attack. We have full confidence that they’re doing so with integrity and that they share the board’s commitment to irrefutably strong governance and business practices."
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Ellis told the outlet in a separate statement, "I take my role as GLAAD’s financial steward incredibly seriously, and we’ll continue updating our procedures to keep pace with the organization’s rapid growth."
