The Brown Foundation Cuts Back on Giving

By H.G. REZA

Nov. 4, 1999 12 AM PT

TIMES STAFF WRITER

The Nicole Brown Charitable Foundation, founded in 1994 to help battered women, has radically cut back on what it’s given to charity the last two years--$5,630--while spending more than it ever has in staff salaries, tax records show.

The foundation has raised about $800,000, not including interest, since 1994, but in the last two years, its donations have dropped substantially, to about $147,000.

“We’ve granted out money. Maybe it’s not as much as people would like to have seen. But we also need money to operate,” Denise Brown said in an interview last week.

Denise Brown opened her records to The Times last week after media reports suggested that the foundation’s 1998 tax returns showed that it fell far short of the standards for charitable giving because it gave about 3.6% of its expenses to charity that year.

In fact, over the five years the foundation has been in place, it has given about 36% of what it takes in to charity, still far short of national charity standards, according to Dan Langan, spokesman for the National Charities Information Bureau in New York.

“The standard most followed is that 60% of expenses go to charity,” Langan said. “A well-run organization will give away 70%.”

In the future, Brown said the foundation will continue to award small grants, but its main goal will be to help build transitional housing centers--called “Nicole’s House”--throughout the country for battered women and abused children.

She said the first center may be constructed as early as next year. The centers will be able to house women and children for up to 24 months, giving a battered woman time to acquire job skills, learn parenting skills and earn a general education degree.

“I’m going to keep this foundation going forever. Nothing is going to close me down. I’m a fighter. I believe in the cause. I believe in helping the women and children. I believe in making a better life for the kids,” Brown said.

The San Juan Capistrano-based organization, which is funded by contributions and revenue from fund-raising activities, was formed in 1994 following the killing of Nicole Brown Simpson. Her ex-husband, O.J. Simpson, was acquitted of the 1994 killings of Nicole Brown Simpson and her friend Ron Goldman but was found liable in a subsequent civil case.

No Grants Given in 1997

In the first three years of the foundation, it collected $655,562 and gave out $269,000 in contributions. But in the last two years, the charitable contributions dwindled and overhead expenses have increased.

For example, the organization did not make any grants in 1997, while piling up overhead expenses of $111,261.

Lou Brown, Denise’s father, ran the foundation in 1997 and, at 76, was tiring of the effort to keep the organization going, Denise Brown said. Instead of the foundation issuing grants, he gave away a book about spousal abuse to any organization that applied for a grant, she said. Reached for comment, Lou Brown, who retired from the board in 1998, referred all questions to Denise Brown.

The foundation’s most noticeable expenses in recent years have been for rent and salaries. For instance, rent payments grew more than fivefold from $9,730 per year in 1995 to $48,984 in 1996.

Denise Brown said the foundation’s first office was at the Monarch Bay home of her parents, Lou and Juditha Brown, where the organization paid no rent in 1994. The office was moved to a nearby shopping center in 1995 and then to a 2,700-square-foot office in Dana Point as contributions and a crush of volunteers began rolling in.

According to Denise Brown, rent payments for the bigger office were $2,089 per month, but the organization was forced to move again when the building owner raised the rent to $4,500 a month. The foundation has been at its present location in San Juan Capistrano since April, paying $1,975 per month for a smaller office.

Salaries have also increased substantially, growing from $15,558 in 1995 to $79,220 last year.

Over the last two years, $110,557 of the foundation’s money has gone to salaries, including $28,000 to Denise Brown, who became chairwoman of the charity’s governing board in 1998.

The organization does not have any paid staffers this year, Denise Brown said, but its expenses still have to be paid even while contributions drop off.

“Nobody’s doing anything wrong,” said Roger Warren, the foundation’s accountant. “It’s just that there has been a significant drop in revenue, and they don’t have the wherewithal to do the things they want to do.”

Denise Brown attributed the drop in contributions to the public’s shrinking interest in her sister’s sensational murder.

“At the beginning there was a huge hype because of the case. I was traveling three weeks a month, raising money and talking to groups,” Brown said. “The hype has died down. . . . There are so many charities to give to. People don’t have a lot of money to give to ours.”

Brown said she began drawing a monthly salary of $2,000 between April 1998 and June 1999 after the board of directors insisted she do so. It is the only salary she has ever received from the foundation, Brown said.

In an attempt to raise revenues, Brown said she hired a full-time fund-raiser in 1998, paying her the equivalent of $35,000 a year, and a full-time office manager who earned the equivalent of $30,000 a year. A third employee earned $880 per month working part time. All three employees have been let go, she said.

“We weren’t raising any money. We couldn’t afford to pay anybody,” Brown said. “I gave $35,000 in salary to somebody who was going to turn the organization around and have it be a very successful foundation. Well, it didn’t happen.”

Denise Brown said it is a continuous struggle to keep Nicole’s memory alive by keeping the foundation funded. She also admitted she has made several mistakes along the way.

For example, she said, a June fund-raiser at the Playboy Mansion in Los Angeles, expected to raise $70,000, turned into a fiasco. After paying $62,000 for the use of the mansion--an amount she didn’t know was due until after the foundation signed the contract--and other expenses, the foundation walked away with about $5,000, Brown said. It was at this point that Denise Brown stopped drawing her $2,000-a-month salary, she said.

Family Admits Inexperience

But she also acknowledged that some problems arose from the Brown family’s inexperience in charity fund-raising.

“We were a family . . . doing a lot of this on emotion. We had no background on how to run a foundation,” Brown said. “All we knew is that we were getting a lot of money at the beginning, and we wanted to give it away.”

A 1995 Times article about the foundation revealed numerous gaffes by the Brown family in establishing the organization. For instance, the family relied on Dallas businessman Jeff C. Noebel to start the foundation without knowing that he was a convicted felon and accused spousal batterer. At the time, Noebel was also awaiting sentencing in federal court for lying to authorities in a savings and loan investment scam.

At the time, Lou Brown attributed the mistakes and controversy surrounding the group to “growing pains” and described the family as “novices” in the world of fund-raising.

Last year, the family realized that the foundation needed to be run as a business, Denise Brown said. Her parents and her younger sisters, Dominique and Tanya, stepped down in 1998 as the unpaid board of directors in favor of a new board made up of volunteers from the business world. Denise, who has been the family spokesperson since Nicole’s death, was appointed chairwoman.

Since Nicole’s death, Denise Brown said she has been on the speaking circuit making between $2,000 and $10,000 per speaking engagement. In the years following her sister’s murder, Brown said she earned between $60,000 and $100,000 per year.

“For the first 3 1/2 years, I made a great load of money, but it has tapered off considerably. I also did a lot for free,” she said.

More recently, when donations started dwindling for the foundation, Denise Brown decided to speak at fund-raisers for other battered women’s groups and to divide the proceeds, with half going to the foundation. The group that invites her picks up transportation and hotel costs but does not pay her a speaking fee.

Brown said she gets upset with those who suggest she and her family are profiting from her sister’s murder.

“There would’ve been ways for me to get rich if I wanted to profit from my sister’s murder,” Brown said, adding that she recently rejected a $1 million book deal.

“I don’t want people to think that we’re doing something wrong,” she said. “That’s what hurts, having people think we’re taking the [foundation’s] money and living high on the hog.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

BROWN FOUNDATION

From 1994 to 1998, the Nicole Brown Charitable Foundation raised $885,888 primarily from contributions and fundraising. It has racked up $759,859 in expenses and spent $274,630 on charities, or 36% of the total. The charity was founded in 1994.

TOTAL INCOME (INCLUDES CONTRIBUTIONS, FUNDRAISING, INTEREST AND DEPRECIATION)

1994--$153,888 (ALL CONTRIBUTIONS)

1995--$335,312

1996--$192,553

1997--$146,508

1998--$57,627

TOTAL--$885,888

EXPENSES (INCLUDES GRANTS ISSUED)

1994--$5,858 (NO GRANTS ISSUED)

1995--$277,727

1996--$208,350

1997--$111,261 (NO GRANTS ISSUED)