116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS — As a three-way race for the city’s top elected role heats up, Mayor Brad Hart this week scolded a nonprofit arts venue leader for appearing to host a campaign event for a political rival — cautioning its director that public money he votes on to support the hall could be on the line if the show went on.
In a voicemail Hart left Wednesday for Taylor Bergen, executive director of CSPS Hall, the pioneering arts and cultural nonprofit, the mayor used a profanity in taking issue with what he said was a violation of the group’s nonprofit status. The Gazette obtained and reviewed two recordings.
“Taylor, this is Brad Hart,” Hart said. “This event you are having on Friday is a violation of your 501(c) (3) status, and it significantly damages any possibility of CSPS getting any hotel-motel tax funds from the city in the future. It’s complete bullshit, and if you don't know that you have violated your 501(c) (3) status, you should not be in the role you’re in.”
The event actually was scheduled for Saturday night at CSPS Hall with arts organization Improv Incubator featuring Amara Andrews, a mayoral candidate, as a special guest.
“Join us this summer as we partner with Improv Incubator to bring you their monthly theatre series with special guests!” the Facebook event description read. “Watch as three veteran improvisers from the Improv Incubator enlist a special guest, Amara Andrews, who has never performed improv, for an improv show. Will it be fine? Will it be a mess? A fine mess?”
The event also included a disclaimer: “CSPS, the 501(c) (3) nonprofit organization, does not endorse any political candidate. We do, however, encourage every person who is able to vote to participate in the democratic process.”
The event was billed as a fundraiser for The Academy SPS and Advocates for Social Justice. Andrews is the president and vice president of those nonprofits’ boards, respectively.
On a Facebook event page, a photo of Andrews that was used in marketing material did not include her in any apparel promoting her mayoral campaign and was not labeled as a campaign event. But her Amara4CR Faebook page on July 8 shared a promotional video of the event that used a photo of Andrews in a white “Amara for mayor” T-shirt, which Hart told The Gazette is what he saw when he learned of the event, raising concerns about CSPS crossing the line of advocating for a political candidate.
Hart said he was “trying to get the point across as quickly as possible when I learned of” the event by leaving the voicemail for Bergen.
“It seems so obvious that it’s not what 501(c) (3) organizations can do,” Hart said. “It’s so incredibly obvious. I was frustrated. I would be frustrated if it was somebody running against one of my other council members. I’ve worked with nonprofits for 30 years, so I understand rules related to nonprofits, and that is absolutely wrong.”
CSPS said Friday on Facebook it will cancel the event.
“CSPS has never endorsed any candidate for any political office at any time and we do not plan to do so,” the statement read. “CSPS supports artists, including local artists, freely expressing themselves and never has controlled the content of the performance. However, to make our stance abundantly clear: that the CSPS organization does not endorse political candidates, we have canceled Saturday's event.” According to the post, CSPS will contact those who already bought tickets.
The Andrews campaign said the event will go on at 8 p.m. Saturday at 2107 Aspen Ridge SE. Donations will go toward her campaign.
Bergen said he shared Hart’s voicemail with the CSPS board but did not know the audio also was provided to The Gazette.
CSPS had contracted with Improv Incubator, which the selected the artistic content of the event, Bergen said.
“In no way, shape or form were our actions in entering into a relationship with an artist group that are all private citizens — in no way was our organization endorsing any candidate,” Bergen said. “Not just Amara Andrews — any candidate.”
With the event to be at CSPS’ space, 1103 Third St. SE, Andrews said she viewed the marketing as the group simply promoting one of its events. “I don’t know that that rises to the level of an endorsement when the people with the relationship were really Improv Incubator and Amara4CR,” Andrews said.
The incident, involving two of the three candidates vying to serve as Cedar Rapids mayor in the Nov. 2 election, sets the stage for a contentious race for the city’s top elected role. Tiffany O’Donnell, chief executive officer of Iowa Women Lead Change, also is running for the seat.
Although Bergen did not comment on the nature of Hart’s comments, Andrews — who had been informed of the mayor’s voicemail and felt fallout with the cancellation of her event — said concerns should have been expressed and dealt with but that leaders should not “threaten our nonprofits in this way for personal gain.”
“City dollars that are allocated to nonprofits should be based on objective criteria and the needs of the city, and not what is best for a mayoral candidate,” Andrews said.
CSPS faced ‘a lot of risk’
Former Cedar Rapids City Council member Monica Vernon, who is board president of CSPS, said she spoke Wednesday with Hart not long after he left the voicemail. She said Hart made a “strong delivery” in relaying his concern that holding this event would be a violation of the group’s nonprofit status, so she placed a discussion about the matter on the board’s agenda for its meeting that night. The board unanimously voted against holding the event, she said.
“This is a lot of risk for our organization, and so we know it and that’s why the event is canceled,” Vernon said.
The event was not intended to promote the Andrews campaign, Vernon said, “but any time you give a candidate the stage, it could be really good for them or really bad for them.”
CSPS board members also agreed to a long-term effort to set clear policies to avoid perceived or actual violations of the group’s nonprofit status, Vernon said, considering things such as whether the organization should ever host political candidates or, if CSPS does host office-seekers, how to carefully do so to avoid violating the law.
Paul Thelen, director of the Iowa Nonprofit Resource Center based at the University of Iowa, said the center does not comment directly on any organization or event.
Generally speaking, Thelen said the law for nonprofits strictly prohibits advocacy for or against a political candidate. The prohibition of electioneering or political advocacy under the Johnson Amendment is intended to maintain public trust in these charitable groups, he said.
Treating all candidates equally in any nonprofit work may be one way to avoid appeared or actual support or opposition, Thelen said. But potential IRS revocation of a group’s status ultimately depends on the facts and circumstances of a case, he said.
“You do have to take steps to make certain that you don't cross the line into what might be considered to be political campaign activity,” Thelen said. “So, we want our elected officials to come visit venues, we want them to participate in events appropriately, but especially when you get into times around campaigns, then these are kind of activities that include some candidates but exclude others, then you get a scenario … where potentially other campaigns, candidates can see that activity as being partisan, as being political.”
In regards to Hart’s remarks casting doubt on Bergen’s job performance, Vernon said she thinks Bergen took those comments seriously and the board supports him.
“It’s a learning situation for everybody, and I think the intent has always been to bring great artistic information and entertainment to people in the area, and probably some things that are cutting edge which make us uncomfortable,” Vernon said.
Hart stood by his remarks that Bergen “shouldn’t be in the role” he is in if he does not understand potential violations of the group’s nonprofit status.
“He's running a nonprofit. He needs to understand that,” Hart said. “And yeah, a mistake can be made because he hasn't been in that role very long. So, if he doesn't learn this lesson, then that would be really troubling, but for someone who's been in the nonprofit world, it just — it's so obvious that it was inappropriate.”
Nonprofit funding in flux
Hart’s suggestion in the voicemail that holding the event could jeopardize CSPS receiving hotel-motel revenue from the city comes at a time where funding is precarious for nonprofits as they emerge from the pandemic.
Typically, the city allocates more than $1 million in revenue made from overnight guests to nonprofits in a competitive grant process after covering other city expenses, including debt payments and the Cedar Rapids Tourism Office.
But facing budget woes with hotels closed and travel limited as COVID-19 began to spread, the city in 2020 paused those payments for fiscal 2021 — the budget year that began July 1, 2020, and ended June 30.
City Finance Director Casey Drew notified nonprofit leaders at the time that future allocations eventually would be discussed based on actual revenue from that fiscal year.
Now, coming up $1 million short with $2.8 million in hotel-motel tax revenue from fiscal 2021, city officials are exploring future changes to the allocation process.
For CSPS in particular, hotel-motel tax funding already has been in flux. The City Council previously withheld this money from the organization as it struggled to get a grip on its finances and pay vendors. The council released funds again in October 2019 as it began to pay down the debt.
CSPS continues to work to become a more financially viable organization, Bergen said, but finally paid off its debt this spring through the work of the board, community partners, donors, staff and himself.
“Hotel-motel tax funding is a very important piece of the financial solvency of many of the nonprofit organizations in town,” Bergen said. “And if that is to truly be an equitable way of funding these organizations, there needs to be continued discussion about it as these funds become available.”
Hart, as mayor and one of nine to sit on the council, has a role in approving which organizations get the money.
He said CSPS is “an important part of our community” that many people worked to get back on its feet financially, and it could be in the mix with other organizations that apply for a share of the tax revenue in the future.
“If they canceled it because they realized that it wasn't appropriate, then I assume they learned their lesson and they wouldn't do something like this again with anybody, and then yeah, a mistake was made and I wouldn't hold it against them going forward,” Hart said.
Given the havoc COVID-19 has wreaked on nonprofits’ budgets, Hart in recent weeks has publicly indicated a desire to look at ways to use part of the $28 million the city will receive in federal American Rescue Plan funds to support the organizations.
Hart said he would continue to support local nonprofits.
“I've been a volunteer for in this community for 30 years, and I understand the importance of our nonprofits, and the struggles many of them go through and the importance the hotel-motel tax is for them,” Hart said. “It was painful to not have any hotel motel tax they're distributed over the last year, so it was hard on all of us, because we know it's important.”
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