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A committee charged with reviewing nonprofit organizations with ties to the city of Carmel discussed its latest findings Wednesday night after studying the governance and financial structures of the community’s beloved German-themed holiday market.
Marilee Springer, a partner at Indianapolis-based law firm Faegre Drinker, examined Carmel Christkindlmarkt Inc. and addressed members of the Carmel Affiliate Review Committee. She said that while the holiday market has been successful since its inception in 2017, the nonprofit that operates it needs to improve in several ways and is working toward those goals.
“We feel comfortable that this board and the CCI leadership team are taking this feedback seriously and are course-correcting, so many of these issues have already been fixed,” Springer said.
The six-member Carmel Affiliate Review Committee was established last year to “evaluate the purpose, governance and tax structure and related fiscal and risk aspects of all nonprofit corporations and community development corporations that are affiliates of the City of Carmel.”
The committee is examining four nonprofit affiliate organizations with ties to the city: Promote Carmel Inc., Carmel Christkindlmarkt Inc., the Carmel Midtown Community Development Corp. and the Carmel City Center Community Development Corp.
The committee’s members are Mayor Sue Finkam; City Council members Teresa Ayers, Ryan Locke and Shannon Minnaar; former City Council member Tim Hannon; and Joe Wood, who is CEO of Carmel-based InvestEd.
“The reason we’re doing this is not to pick on any individual organization,” Hannon said. “This is a broad-based review with one purpose only: to improve this and all organizations going forward. Although it sounds like criticism because we’re getting into the retrospective here, our only goal here is how we do make these organizations better, more sustainable, more accountable and more transparent.”
Carmel Christkindlmarkt was the brainchild of former Mayor Jim Brainard. It was established as a city-owned event operated by the three-member board of Carmel Christkindlmarkt Inc., a nonprofit that is considered a subsidiary of the city.
Last October, Finkam announced changes to the organizational structure of the nonprofit that included removing two board members, Brenda Myers and Sven Schumacher. Board Chair Sue McDermott also resigned. Finkam appointed McDermott and Myers to the board in January 2024, while Schumacher had served on the board since 2019.
The current board consists of Chair Maddie Augustus, a registered lobbyist with law firm Faegre Drinker; Vice Chair Abhi Reddy, chief of staff and legislative counsel for the Indiana treasurer of state; and Secretary-Treasurer Zac Jackson, who serves as the city of Carmel’s chief financial officer. The organization is led by CEO Maria Adele Rosenfeld.
Springer said the city and Carmel Christkindlmarkt Inc. signed a new operating agreement on Wednesday.
What was presented
On Wednesday, Springer focused on Carmel Christkindlmarkt Inc.’s governance and its financial relationship to the city.
“The reason why we’re focused on governance right now is because we had tension around governance, and so we’re happy to resolve these governance issues because they were ambiguous,” Springer said.
One concern Springer rose is the amount of time city employees, particularly those in the Carmel Street Department, have committed to the market in recent years.
While former Mayor Jim Brainard issued an executive order in 2007 allowing city employees to perform no more than 75 hours of community services in a calendar year, Springer said that in 2023, the Street Department committed nearly 8,000 hours in support of Carmel Christkindlmarkt Inc. and the market.
She said 37 employees exceeded the 75-hour threshold and worked an average of 131 hours. The same employees also supported other nonprofit events, such as CarmelFest and the Carmel Farmers Market.
In terms of city support, since 2017, Carmel has contributed $8.5 million to support the logistics of the market, according to Springer’s presentation. The city contributed about $1.06 million to the market last year, and Carmel Christkindlmarkt Inc. has reimbursed about $284,000.
Springer also presented the amount of net assets and cash on hand that Carmel Christkindlmarkt Inc. has reported since its inception. As of the end of the last fiscal year on record, on March 31, 2024, the organization had nearly $2 million in net assets and $1.57 million in cash on hand. That was an increase from $1.19 million in net assets and $749,941 in cash on hand the previous year.
Springer said the city initially did not know how much cash on-hand Carmel Christkindlmarkt had because it was not indicated on the organization’s balance sheet.
“During a time when we are asking CCI to start making payments to the city, we did not have clarity about how much cash on-hand CCI had,” she said.
In 2024, the Christkindlmarkt had a 10% increase in revenue and a 3.8% increase in average daily attendance, according to the organization’s annual report. It also operated at a loss for the first time, about $448,000, as Carmel Christkindlmarkt Inc. hired six employees and reimbursed the city of Carmel for expenses tied to the logistics of the market.
The organization’s board has been tasked with addressing its revenue shortfall. Potential strategies could include a combination of expense reductions, such as personnel and direct costs, and revenue enhancement, such as sponsorship, vendors, food and beverage sales and increasing days of operation.
Springer said that if Carmel Christkindlmarkt Inc. does not reduce its expenses, the organization might need to access its line of credit to pay bills late this year until revenue starts coming in from the market.
Springer discussed the salaries of Carmel Christkindlmarkt Inc.’s employees. She noted that CEO Rosenfeld’s total compensation last year was nearly $287,000. The organization also has a director of sponsorship, vice president of operations, vice president of internal operations, vice president of communications and vice president of cultural programs who were paid between $82,000 and $125,000 each last year.
The salaries reflected increases of 75% for Rosenfeld and about 39% for employees, other than the director of sponsorship. Springer said that leading into 2024, Carmel Christkindlmarkt Inc. paid bonuses to its CEO as a percentage of its net earnings or revenue from the market, which could have jeopardized the organization’s tax exemption.
What they said
Rosenfeld said in written remarks that Carmel Christkindmarkt Inc. “will continue to cooperate fully with the City of Carmel to foster a sustainable partnership built on a foundation of transparency.”
“This is evidenced by the 524 documents we provided to the Affiliate Review Committee for tonight’s meeting,” she said. “It remains our goal to offer an authentic, magical holiday experience that elevates the City of Carmel regionally, nationally and internationally. We look forward to stewarding this invaluable community asset for generations to come.”
Hannon, the former Carmel City Council member on the Affiliate Review Committee, compared Carmel Christkindlmarkt Inc. to a startup that is becoming a mid-stage company. He suggested that the organization should consider consolidating some of its VP positions.
“Two things can be true,” Hannon said. “An organization like Christkindlmarkt can put on a fabulous world-class event and have a very talented market manager and yet still need to transition and improve what they’re doing.”
Locke, the City Council member who is president of the Affiliate Review Committee, said the goal is to figure out how to ensure the market’s continued health.
“Carmel Christkindlmarkt is a joy for the city. People love it. People from Fishers even come to the city to go to it sometimes,” Locke said.
During public comment period, current Board Chair Augustus said the board is working “productively and collaboratively with the city.”
“What we have done, and what we continue to want to do as a board, is just that. We want to have open dialogue and a shared vision of maintaining the festival as a family-friendly event that brings joy to both residents and visitors,” Augustus said. “And a part of that commitment, we understand the importance of working toward long-term self-sustainability, and we’re actively continuing to explore ways to enhance revenue opportunities, improve operational efficiencies and ensure that the Christkindlmarkt remains a vibrant and financially responsible asset for the community.”
McDermott, the former board chair, also addressed the committee during public comment and discussed the dismissal of the former board members and her resignation, and described her misgivings with the presentation.
“I was not interviewed nor asked for confirmation of the findings presented tonight,” McDermott said. “If the goal of this committee is to truly review the governance and operations of CCI and its affiliation with the city of Carmel, it’s hard to understand why these actions by the city and its administration were not scrutinized.”
The Carmel Affiliate Review Committee will issue a report on the four nonprofit organizations after it holds its final meeting on May 1 when it will discuss the Carmel Midtown Community Development Corp. and the Carmel City Center Community Development Corp.
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‘”Springer discussed the salaries of Carmel Christkindlmarkt Inc.’s employees. She noted that CEO Rosenfeld’s total compensation last year was nearly $287,000. The organization also has a director of sponsorship, vice president of operations, vice president of internal operations, vice president of communications and vice president of cultural programs who were paid between $82,000 and $125,000 each last year.”
$287K to manage an event? There are CEOs of large companies not making that much money. There are Executive Directors of Non-Profits doing actual real work not making that much. If I recall, she was making $125K when she started. Time to clean house. This is absurd.
Wow–and I get they are a nonprofit, but those salaries are more than a little high when:
November 22, 2024 | Daniel Bradley
From 2017, when Carmel Christkindlmarkt was launched, through last year, city departments spent an estimated $7.56 million to support logistics of the market, which last year attracted nearly half a million visitors.
Isn’t her husband also getting compensation?
He did, but notice they didnt mention any other names.