Softball deal gone foul brings up questions in Elks’ finances
Who could question the motives of the Benevolent and Protective Order of Elks? The fraternal organization, which began as a New York social club in 1868, is one of the country’s best-known donors to charity. This fiscal year, the Elks National Foundation will give almost $13 million in scholarships and grants to worthy organizations and individuals. Though that amounts to just a little over $10 per member, it’s still a lot of money.
The Chico lodge’s exalted ruler, Jack Thorpe, reports that the local lodge, which has almost 1,000 members, will give $14,000 to local youth and community groups this year, $2,000 more than last year.
But, while no one questions the good intentions of Elks members, there are people in Chico, including some lodge members, who do question the leadership of its local branch, Lodge 423. They say the lodge, which has struggled in recent years with declining membership and increased maintenance costs on its sizeable Chico property, is devoting too much effort to renting out its facilities and not enough to charitable purposes. What’s more, letters and comments given to this paper by members and ex-members of the lodge have brought to light what some consider serious problems with lodge fundraising and accounting practices.
Much of the story involves internal Elks politics and is thus shrouded from public inquiry. While the source who initially contacted this paper with allegations of accounting problems and bad management said he is interested only in reforming the organization, lodge leaders said there is nothing to reform, just a difference of opinion among members.
The source, a lodge member with intimate knowledge of its business affairs, said on condition of anonymity that poor management was driving members away from what used to be a more vital community resource.
“The place has become a rental hall,” he said. “My opinion is that their focus is on renting out their facilities instead of taking care of their members.”
Case in point: The lodge recently may have lost more than $3,000 a year in dues when about 30 of its members reportedly quit in response to the shabby treatment of a local softball league by Elks business managers. John Kranz, a former Elks officer who is also the former president of the Chico Senior Softball League, says the league was left on the short end of a bargain when it agreed to fix up the softball field behind the Elks’ lodge on Manzanita Road in exchange for a price break on field rental.
Kranz said the league spent almost $3,000—not counting donated labor and materials—and the better part of a year performing a total makeover on the dilapidated field. Before they fixed it up, Kranz said, “It looked like a cow pasture. Nobody had ever taken care of it. It was totally unrentable.”
The senior league, which has about 200 members ranging in age from 50 to 84, put in foul poles, dugouts, a backstop—the works—transforming the lot into a real-life field of dreams. “We babied that field,” Kranz said. “We were definitely looking long-term.”
But the relationship began to sour when the Elks, who had initially offered the league extensive use of the field for $750 a year, began to demand more money.
“They wanted $2,000,” Kranz said. “[Then] every year they wanted more and more.”
The league ended up paying $1,000 its second year, $1,200 the next, and so on, all the while continuing to maintain the field. For the first few years the senior league was using the field, the Elks were open to negotiation, but when the time came to set the price for this season’s rental, the Elks stood firm, again asking for $2,000 and balking at the league’s offer of $1,500 plus $1,800 in further improvements.
When the deal fell apart, 30 league members who also belonged to the lodge quit the Elks in protest. The league now plays its games at Sycamore Field in Lower Bidwell Park.
The incident is telling because, say Kranz and a few others, it is symptomatic of a larger problem. Kranz, who was a member of the Elks for four years, said he quit not just over the softball field, but also because the charitable purpose he joined to promote in the first place “doesn’t seem to be their main goal anymore.”
Thorpe denied that the lodge had curtailed its giving and questioned the number of members who actually quit over the softball flap, saying that he knew of only two.
He also said the lodge is in great financial shape and lamented that the Elks seemed to get media attention only when something negative came up.
“A lot of times we do more than people think we do,” he said. “I hate to see these kinds of things surface, because it’s not fair and it’s not true.”
But interviews with lodge members and financial documents obtained by the CN&R seem to point to a pattern of misdirection of charitable funds into other lodge accounts. Take the annual donation to the Chico Central Little League, for example. Instead of simply donating use of the field to the Little League, the lodge reportedly gave it $5,000 out of a restricted lodge account earmarked for charitable donations.
But the money came right back into the lodge’s unrestricted general fund in the form of rent, as the Little League reportedly pays the lodge $5,000 a year for use of the field—the same field that the senior league fixed up for free.
So, while the kids undeniably benefit from the deal by having a place to play ball, the lodge also benefits by turning money it is obliged to use for charitable giving into money it can use for whatever it wants.
A financial audit performed on lodge books last March turned up several of these kinds of anomalies. According to the audit, which was conducted by Chico Certified Public Accountant David Spring, some lodge-affiliated clubs were found to maintain separate bank accounts and financial records that were not under the control of the lodge treasurer. Negotiations by lodge trustees on matters such as the senior softball league deal were found to be undisclosed to regular members, and loans were apparently taken and made without proper paperwork.
Spring, who did not return a call for comment by press time, wrote in his report that there were “numerous loans and or advances between the Chico Lodge No. 423, Elks Hall Association and Manzanita Place and there is no documentation to support the dates and reasons for the loans and advances.”
The lodge was also forced to pay a fine—which, with late penalties, escalated to $2,000—to the Employment Development Department for classifying a paid employee as an independent contractor and has now drawn the eye of the Elks’ national organization, a source confirmed. If the national leadership is displeased, it possibly could take over the operations of the Chico chapter. The Elks Grand Lodge did not respond to a request for comment.
Thorpe denied the lodge was under special scrutiny and said he would check into the allegations made against the lodge and write an official response within two weeks.
Neither Kranz nor anyone else had anything bad to say about lodge members or the lodge itself. Kranz noted that membership had been in decline—in not just the Elks, but also in almost every other fraternal organization in the country—long before the current leadership took over. But while that situation may have been inevitable, he said, poor decisions by lodge trustees have caused a rift among members, some of whom believe the lodge should get out of the rental business entirely.
“They made an effort [to solve declining membership revenues]," Kranz said. "They saw a problem and tried to fix it. There just might not be a solution."