Is it a Charity or a Scam?

I'm on the DO NOT CALL registry but that doesn't stop people from calling me and asking me to donate some money to their police and firefighter charities. Some of these charities are not really charities, they are businesses. They give a small amount of money to some fire department somewhere and keep 90 percent or more of the money they bring in. It's legal, but deceitful to pull on people's heartstrings for profit.  It is up to us to check out these businesses and find out just how charitable they really are. We have both federal and state laws that regulate non profits and charity fundraisers and require reporting that reveals how much of the money that is taken in gets donated to the charity.

Carols by Candlelight is the name of a Christmas concert put on by Steve Vaus. It is heavily promoted as a charity event that benefits Rady's Children's Hospital.  Carols by Candlelight is not a nonprofit with a 503(c)(3) with an IRS tax number, that would allow donors to take a deduction for their donation. Nor is Carols by Candlelight (or Steve Vaus Production) registered in the State of California's  database of charitable organizations or fundraising entities that  comply with the State of California's registry and reporting requirements. Some years ago, when Steve Vaus sent emails to me and my friends, asking us to be angels and donate thousands of dollars to his Carols by Candlelight production, the implication was that those donations would be tax deductible. But they were not. And because they are not, I was unable to find out how much of my donation would end up being given to the charity and how much would end up in Steve Vaus' pocket.

The Carols by Candlelight concerts are held on 2 days in December in Escondido's Center for the Performing Arts. The concert hall has 1500 seats. Ticket prices for this year are $69-$87. You can also buy "hero tickets" for active duty military and first responders for $25 each.  Ticket sales could potentially could bring in between $200,000- $250,000 gross.

Every year, Steve Vaust starts soliciting for donors for Carols by Candlelight. Donors can give $15,000 for Title Sponsorship (previously it was $25,000), $10,000 to underwrite band costs, $5,000 to underwrite travel expenses; 2,500 for hospitality plates; $1500 to underwrite stage decorations and $1,000 to underwrite raffle expenses. It is unknown how much money is donated by these Christmas angels. In addition, there is a raffle or auction, and items are likely donate. Currently, this years Carols by Candlelight already has 8 Sponsors and 3 Media Sponsors listed, although I do not know how much each one contributed. The total amount donated to Carols by Candlelight is not public information because Carols by Candlelight is not a nonprofit charity.

Nevertheless, Vaus is sure to look for any extra bucks he can get.
In 2012, Steve Vaus, who was then a candidate for Poway council, applied for a grant from California  Municipal Finance Authority (CMFA).  CMFA arranges bond financing for capital projects. They charge a fee for issuing the bonds, and a portion of the fees that they collect are returned to the communities they serve by giving out grants to other non-profits in the community.  Steve Vaus applied for $5000 to buy tickets for veterans to attend Carols by Candlelight. Vaus could have given the tickets away for free, but he would rather get CMFA and others to pay for them.

On Nov 2, 2012  CMFA, sent a letter to Mona Durney, Executive Director of Carols by Candlelight, and enclosed a check. for $5000.

The check was made out to Carols by Candlelight. On Dec 12, 2012, Valerie Brown, of RB United, sent a letter to CMFA, confirming the receipt of the $5000 check for Carols by Candlelight.  Why was the donation sent to RB United? Perhaps, because RB United was a 501 (c)(3), a real, honest-to-goodness nonprofit, the type that CMFA can legally give money to.

So who is RB United? This is from their webpage:

We began as two separate but related organizations: RB United and ReBuild RB.

RB United formed as a non-profit partnership of the RB Community Foundation, the San Diego North Chamber of Commerce, and The San Diego Foundation to assess and handle the community’s needs in the immediate aftermath of the 2007 Witch Creek fires.  ReBuild RB was created as a 501(c) (3) public charity to serve the survivors of the 2007 Witch Creek Fires, with 90% of all funds collected by Rebuild RB going directly to individual fire victims.

Our two organizations merged in 2009 into a single local non-profit agency capable of applying for grants and seeking underwriting for emergency preparedness and community improvement projects.  We maintain the website name ReBuild RB, but operate under the umbrella name RB United.
During our first two years, RB United served 527 fire families in the communities of Rancho Bernardo, Poway, Rancho Santa Fe, Escondido, and Ramona; coordinated 274 events with 10,000+ total attendees; collaborated with 130 organizations and businesses; and leveraged almost $1.2 million for fire recovery efforts (against an outlay of approximately $250,000 from The San Diego Foundation’s Disaster Board)

In  2012, RB United morphed into 4 Community Solutions. In addition to helping fire victims, and a neighborhood emergency response group, they collaborated with the City of Poway to put on the Poway Days Parade.  They $5000 donation from CMFA should have been reported on this 2012 tax form, but I could not find it. Nor did I  find the words "Carols by Candlelight".  I have no idea what happened with that money.

It is quite the irony that Steve Vaus was funneling donations to his for profit charity through a nonprofit intended to help fire victims. In 2009, Vaus, a political unknown in Poway politics, spearheaded a recall of Councilwoman Betty Rexford. One of his more vitriolic claims is that Rexford misused a firetruck and had it sent to her neighborhood while other Poway homes burned.  A subsequent city report verified that the fire department had acted appropriately when it sent a truck to Rexford's neighborhood to mop up hot spots.

In 2013, 4Community Solutions 990 tax form mentions a community parade and community concert. I doubt this is Carols by Candlelight, but who knows? I've called Valerie Brown, the person who prepared these tax returns, but she has not yet responded to my questions.

The first time the words "Carols by Candlelight appears on 4Community Solutions tax forms is in the 2014 tax year.   It looks like Carols by Candlelight was given $59,492 that year, the majority of all of 4Community Solution's expenses which totaled $64,472. From this tax form, there is no way to tell how much money was donated to Carols by Candlelight and there is no mention of giving money to the charity, Rady's Hospital.  I was hoping the person who filled out these forms would inform me of how much money was actually donated to the charity, but these tax forms do not provide that information.

In 2015, 4 Community Solutions filed a fictitious business statement in San Diego County. They were "doing business as" Carols by Candlelight and a bunch of other entities.

That same year 4 Community Solutions listed $48, 046 given to Carols by Candlelight on their 990 tax form.  Note that Carols by Candlelight is described as a "Community wide" concert. It almost sounds like a whole community was the beneficiary instead of ticket holders, doesn't it? By this time 4Community Solutions had changed from being a charity that helped fire victims to a fiscal sponsorship nonprofit.  According to 4Community Solutions website, fiscal sponsorship involved  some accounting and tax services and insurance and lending their nonprofit status to "unincorporated nonprofits".

Carols by Candlelight is not an unincorporated nonprofit. It is just the name of an event. It was never a nonprofit.  I do not know why 4Community Solutions thought it was appropriate to let Carols by Candlelight use their non profit tax ID number.  And 4Community Solutions is not the only entity doing business as Carols by Candlelight. Steve Vaus' sole proprietorship, Steve Vaus Productions is also doing business as Carols by Candlelight. The lines between 4Community Solutions, Carols by Candlelight and Steve Vaus Productions are all very murky.  While 4Communityt Solutions nonprofit tax ID number is prominently displayed on the Carols by Candlelight webpage, the donation links go to Steve Vaus Productions. A friend of mine, with a heart for veterans ordered 500 worth of tickets from the Carols by Candlelight in 2017. The bank statement from the credit card showed that the money went to Steve Vaus Productions. My friend was fooled by Carols by Candlelight webpage into thinking that his donation would be tax deductible. It isn't.

There is also a question about what happened to  all of the other incoming assets and expenses from the concert. Ticket sales alone should have brought in several hundred thousand dollars.  Steve Vaus wasn't performing for free and neither were the other singers and musicians. His production company was likely also paid. Where is the accounting and tax record of those expenses?  How much in donations came in via money given to Steve Vaus Productions, a sole proprietorship owned by Steve Vaus? Which donations and expenses belonged to 4 Community Solutions and which belonged to Steve Vaus Productions? Did Steve Vaus take a tax deduction on his personal income tax for the contribution to Rady's? Where were all of the income and donations reported?

The 2016 tax return for 4 Community Solutions is not online. The 2017 return has not yet been filed.

I am waiting for the answers to those questions from Valerie Brown, of 4 Community Solutions. She took down my questions and promised to get back to me today, but she did not call. The  4Community Solutions website has been down since I began inquiring about their sponsorship of Carols by Candlelight. Almost all of the previous online information has been removed.  The person who was listed on the tax forms and the IRS forms as the chief board member told me he has not had anything to do with the group for many years. The one question I really want to know is how much did Carols By Candlelight take in, how much were the expenses, how much did Steve Vaus, his family members and his production company get, and how much was the gross profit that was given to Rady's Children Hospital.

Knowing that many of the donations that came in were given to Steve Vaus Productions, I also have a question about the reporting of those donations on economic interest forms filed with the City of Poway. Every year, each member of the city council (and certain the employees) must file  form 700, Statement of Economic Interests. Schedule A-2 of form 700 is titled "Investments, Income, and Assets of Business Entities/Trusts. Every year from 2012-2016, Steve Vaus has listed Steve Vaus Productions as an owned business entity.  Vaus has indicated that his sole proprietorship is worth $100,000 to a million dollars, and his gross income is over $100,000.  Some of this income is likely from the Carols by Candlelight concert.

In 2012 and 2014, Vaus reported no gifts. In 2013, 2015 and 2016, Vaus did report gifts, but I did not see any of the donations from Carols by Candlelight donors on the list.  If people bought tickets for veterans and paid money to Steve Vaus Productions, that donation should be listed on Steve Vaus' Form 700.

Where did the Carols by Candlelight donations from Edco, SDG&E,  Poway Toyota, Kristin Gaspar's husband and others go? 4Community Solutions or Steve Vaus Productions?  Shouldn't Steve Vaus be reporting these donations as gifts on his Form 700? How do we know how much Edco gave to Steve Vaus. How much of that donation ended up at Rady's and how much ended up in Steve Vaus' pocket. Will Vaus recuse himself from discussion and voting on Edco's next contract?  Vaus was not on the council when they voted to give Toyota millions of dollars to move across the street, but it can't hurt for Toyota to have a friend at city hall for the next deal. And what might Kristin Gaspar's husband want from Steve Vaus? Maybe a patronage position for a friend of theirs?

Although Carols by Candlelight is now touting a borrowed nonprofit IRS number on their webpage, unlike true nonprofits, they do not report what percentage of all of the money collected goes to the real charity, Rady Children's Hospital. The do not report how much goes into Steve Vaus' pocket.  I do not recommend donating to Carols by Candlelight until they comply with the nonprofit and charity fundraising reporting laws. You can always donate directly to Rady's Children's Hospital and take a tax deduction.

Update:
I sent an information request to California Municipal Finance Authority. asking for dates and amounts of money they have given to Carols by Candlelight. This is from the response sent to me by John Stoecker of California Municipal Finance Authority.