Avon Township's Crumbling Foundation

Take a visit to the Avon Township building, and walk around the community garden towards the back.  You’ll notice a few plots of finely-tended tomatoes and other vegetables thriving in the bright summer sun.  You will see plots so overgrown with weeds that any cultivated plants are indistinguishable.  Finally, near the pond, there is a large rectangular area that was one a garden operated directly by the community foundation, and is now gone, replaced by grass lawn.  These plots may be an accurate metaphor for the hopeful beginning, tumultuous present, and uncertain future of the Avon Township Community Foundation.

In 2010, the Avon Township Community Foundation was created to serve as a means of purchasing food for the Avon Township Food Pantry.  This was a necessary change because of a decision to use the Northern Illinois Food Bank as the township pantry food supplier.  The NIFB will only supply to tax-exempt charities, what the IRS calls 501(c)(3) charity organizations.  These organizations are exempt from federal taxes and their donors can receive a write-off on their annual income tax return.

The Foundation began with three board members:  former Avon Township Supervisor Sam Yingling as the treasurer, Lake County public defender Cynthia Pruim Haran as the secretary, and Wendy Warden as the president.  Ironically, Ms. Warden and Ms. Haran both actually reside in Grant Township.  Avon Township Assessor Chris Ditton volunteered his legal services to help establish the foundation on a pro-bono basis.

The Foundation seemed to operate well in the beginning, quickly becoming a partner with the Northern Illinois Food Bank and starting a community garden on township property.  A significant source of their early funding, according to a Patch.com comment by Wendy Warden, was the “pay-raise” returns from the supervisor, trustees, assessor, and highway commissioner.  According to Illinois state filings, the foundation had accumulated $19,390 in assets and $31,504 in income by the end of the 2012 fiscal year.

At some point during the last year, the foundation began to unravel.  Cynthia Pruim Haran resigned as a board member, leaving only Mr. Yingling and Ms. Warden.  According to the petition for dissolution filed by Mr. Yingling, Ms. Warden replaced Chris Ditton as the registered agent of the foundation with Chicago attorney Timothy Howe. The IRS also revoked the foundation’s tax-exempt status, as they had not submitted the required annual 990 return for any year since their inception. 

Quickly following the revocation, Ms. Warden issued a letter to Mr. Yingling, blaming his “negligence” as treasurer.  She began assembling the documentation needed to file for reinstatement, dating IRS form 1023 April 6th, 2013. A new discrepancy appeared in this filing, as Cynthia Haran was still listed as the foundation’s secretary, and two new members of the board appeared.  Michael Perillo of Grayslake, and Ann Richmond of Hainesville.  Mr. Perillo is an attorney and vice-chair of the former Central and Western Lake County Democrats organization, of which Ms. Warden was president. Ms. Richmond is the treasurer of the Round Lake library board and wife of former Avon Township Trustee Douglas Williams.

However, by July, the matter was yet unresolved.  Mr. Yingling, on July 12th, submitted a petition for dissolution to the Lake County Courthouse.  In this filing, publicly available by state law, he outlined the following complaints with the foundation and Ms. Warden:

• Ms. Warden did not inform the other board members of the IRS revocation, nor did she call a meeting to discuss steps for reinstatement.

• Ms. Warden filed for reinstatement, including paying a $750 fee, when, according to the petition, there were only two years of missed filings.

• The two additional board members listed in the reinstatement filing were not voted in according to foundation bylaws.

• Mr. Yingling has not been provided with any of the past 990 filings that Ms. Warden claims to have submitted to the IRS.

• Ms. Warden has not agreed to name Supervisor Lisa Rusch to the foundation board as requested by Mr. Yingling.

Verifying these complaints is difficult at this point, as the parties involved have been largely unwilling to discuss the case.  When contacted, Mr. Perillo refused to comment.  Ms. Haran and Ms. Richmond have not responded to inquiries regarding the foundation.

As for Ms. Warden, she issued the following statement to me in a July 17th email:

"Due to the lack of a fully-constituted board, and the pending Petition, it is my understanding that I am not authorized to take any action on behalf of the Foundation (beyond continuing to pay for commodities to keep the pantry's shelves stocked), including releasing financial information to third parties.  While it would certainly benefit my own position personally in this matter to be able to document to you that all necessary and appropriate steps have been taken to reinstate the tax-exempt status - particularly in light of the accusations that have been made - I have an obligation to adhere to the rules governing the Foundation.  However, it is my understanding that Mr. Yingling's lawyer has been provided with the reinstatement forms."

Both Mr. Yingling and his attorney claim to only have access to some of the forms for reinstatement, but not the past 990 returns.  The foundation is no longer listed as a revoked charity according to the IRS exempt organizations database, although a request to the IRS dated June 24th, 2013 returned a letter stating that the 990 forms were “unavailable”.

For now, the foundation is operational and the food pantry is still servicing needy members of the community.  The IRS once again has the foundation listed as a charity eligible to receive tax-free donations.  However, its future is uncertain.  In his petition for dissolution, Mr. Yingling has offered two specific resolutions to the court:

First, that the foundation be dissolved and its assets (minus any costs and fees incurred due to litigation) are transferred or otherwise made available to the Northern Illinois Food Bank to enable the continued supply of the food pantry.

As an alternative, the appointment of township supervisor Lisa Rusch to the foundation board would alleviate the deadlock and likely provide Mr. Yingling a voting majority he can use to restructure the foundation. 

Whatever the outcome, one can only hope that the foundation changes its ways and adopts a policy of greater transparency.  A good example is the Northfield Township Food Pantry, whose website conveniently lists the required 990 return for the last tax year, a brief annual report, and an annual audit.  Between this and some added vigilance from the community, we should be able to ensure that the food pantry appropriately serves the neediest members of the township for the foreseeable future.

Additional reading:

Membership eligibility guidelines for the Northern Illinois Food Bank partners.

Gene Carey's original story on the IRS-issued revocation of the community foundation.

IRS Exempt Organization Status Search