The 28-year-old Columbia Club Foundation has been blacklisted.
Its sole beneficiary, the downtown Columbia Club, has formed a new not-for-profit with the same purpose as the foundation, which is to preserve the 1924 building on Monument Circle.
The Columbia Club Historic Preservation Foundation was formed Aug. 2 with an eye toward a “closer and more harmonious relationship” with the club, club President Miles Schroeder explained in a letter to members.
Schroeder did not respond to multiple messages from IBJ, but his letter suggests the move was a reaction to theft at the foundation. As Schroeder informed members in January, an insider stole an undisclosed sum—money that probably was raised from the club’s roughly 1,600 members.
Now, all donations that members make through a dues check-off will go to the new foundation, Schroeder’s Aug. 31 letter said.
“Please be aware that dues check-offs will no longer be available through the Club to make donations to the Columbia Club Foundation,” he said.
The new foundation came as a surprise to trustees of the original.
“We’re not sure what the intent of the board was in doing it,” attorney Bill Powers said. He referred further questions to foundation President Darrell White, who did not respond to requests for comment.
Both foundation and club directors are mum about the theft by one of the foundation’s own trustees. According to Schroeder’s January letter, the foundation did not press charges against the trustee—whose identity has not been made public—and the money was being repaid.
The decision to start over came after consulting with “numerous other outside philanthropic and legal sources,” Schroeder’s letter said.
The new foundation will have a nine-member board with four people appointed by the club’s directors. Foundation directors will be limited to two three-year terms.
The original foundation has more than 20 trustees, who don’t appear subject to term limits. The board appoints its own members.
The club and new foundation are working together. They’ll hold their annual meetings at the same time in April, Schroeder’s letter says, and they are planning fundraisers, an Oktoberfest on Sept. 23 and “Spooktacular” on Oct. 29.
The fate of the old foundation is unclear. It formed in 1983, shortly after the club was placed on the National Register of Historic Places, and part of its mission was to create an endowment.
The foundation listed investment earnings for the fiscal year ended June 30, 2010, of $18,794 and net assets of $548,837.
Part of those assets is a large collection of Hoosier Group paintings, including several by club member T.C. Steele. Steele and other members of the Hoosier Group worked in the late 19th century and early 20th century and are best known for their Indiana landscapes.
The foundation also holds a conservation easement on the club’s façade. An easement is like a partial ownership interest, so a building’s owner needs permission to make any exterior changes, said Tina Connor, executive vice president at Indiana Landmarks.
Col. Eli Lilly started the club in 1889 around President Benjamin Harrison’s run for office. It became the place for behind-the-scenes Republican activity, while Democrats gravitated toward the now-defunct Athletic Club.
These days, the Columbia Club just wants members who can afford the dues, which run from $85 to $166 per month, depending on a person’s age. The club saw its ranks cut in half between the late 1990s and 2009, when membership was reported to be about 1,600.
That August, the club hired General Manager James Rentschler from the University Club of Cincinnati to lead a turnaround.
Rentschler did not respond to IBJ’s requests for information, and the club has not yet filed a tax return with the Internal Revenue Service disclosing its 2010 financials. The most recent available statement, from 2009, shows revenue increased substantially, from $3.7 million in 2008 to $6.8 million.
But with expenses at $7 million, the club still fell short.
The foundation isn’t in much better shape. It paid out zero grants in the fiscal year ended June 30, 2010, a tax return shows.
From 2007 to 2008, fundraising dropped from $158,542 to just under $39,000.
Fundraising fell further in 2009, to a little more than $19,000.
Former Executive Director Lawrence Taylor said it was difficult to persuade the foundation trustees and club leaders to work together on fundraising, even before the recession and 2008 financial crisis.
Taylor wasn’t surprised the club formed a new support foundation.
“It’s been thrown out as a threat off and on,” said Taylor, who was executive director in the early 2000s and returned for a year-long stint as interim in the fall of 2007. He said he left after the market crash of 2008 as foundation leaders worried they couldn’t afford to pay a staff member.
Taylor, who was a club member for more than 30 years, blamed the long-running tension on a generation gap.
The foundation trustees, several of whom are past club presidents, are in their 60s and older, while the club’s directors are in their 40s and 50s, he said.
“A lot of changes have had to be made at the club,” Taylor said.
With staff turnover, for example, members could no longer count on being recognized without their ID cards. And enforcement of the dress code fell by the wayside at one point. “The people on [the foundation board] have just had a tough time with the changes.”
Such rifts are common in the club world, said Frank Vain, president of the St. Louis consulting firm McMahon Group.
Club officers typically move to a seat on a land trust or endowment-holding foundation after their terms end, Vain said. “That foundation board will tend to be a bit of the elders, if you will.”
There’s also a natural tension that comes from having different missions, Vain said. “The foundation board may not be as in tune with the day-to-day issues, changing times the operating board is being forced to respond to.”•