Dance of Deception

A widening scandal that has stripped the city’s nonprofits of charitable assets has battered the performing arts sector – and hit the financially vulnerable dance community particularly hard.

| 03 Sep 2019 | 10:25

The executive director of Dance/NYC frames the issue bluntly: A loss of $5,000 to $10,000 in donor revenue can take a small Manhattan dance company “from the black to the red.”

Unfortunately, says Alejandra Duque Cifuentes, at least five local dance companies have incurred losses in that range – and at least one ended the fiscal year with a deficit for the first time in its long history.

The culprit is, an online fundraising platform relied on by hundreds of nonprofits, including scores of cultural organizations, to process and disburse charitable donations from the public.

That lifeline abruptly went dark. As reported by Straus News in a page one story on Aug. 29, “Heartless Attack on Heart of New York,” it ended operations, closed its office at 50 Broadway, cut off all communications and suddenly stopped releasing the funds it owed its nonprofit clients.

With claims of unpaid contributions ranging from $200 to $100,000-plus – and over 100 complaints from charities and individuals over the e-giving portal’s failure to distribute hundreds of thousands of dollars – state Attorney General Letitia James and Manhattan District Attorney Cy Vance each launched separate investigations.

The bottom line: Theater troupes, opera companies, arts groups, PTAs, preservation groups, immigrant support groups, educational advocacy groups, senior groups, churches, synagogues – and at least one puppet theater – are still counting their losses.

A Community Comes Together

But no group was harder hit than the scrappy, mini-budget downtown dance community. The tally of companies impacted, their total financial loss and the drag on staff salaries isn’t yet clear. Dance administrators are struggling to map the full extent of the body blow they suffered.

“We believe many are still unaware this is occurring,” said Cifuentes, whose nonprofit group, based on East 18th Street, provides research, services and advocacy to the city’s professional dance community.

“While we are unsure of the number of dance companies impacted, we are certain that this has had a critical impact on the companies with small budgets,” she added.

How do dance-makers and cultural workers recover after being fleeced of desperately needed donor funds? “We overcome this – as we have overcome a variety of affordability issues across the sector – by coming together, sharing resources and adapting to change,” Cifuentes said.

To do that, Dance/NYC is organizing an emergency gathering on Friday, Sept. 13 at 7 p.m. at the Gibney space in the Agnes Varis Center for the Performing Arts at 280 Broadway for the dance community to address the fallout from the collapse of NYCharities.

The idea is to hold an open-forum discussion to gauge the impact, share experiences – and chart a path out of the crisis by connecting distressed dance companies to legal, civic and corporate resources that can help mitigate the financial toll.

And it isn’t just for the dance world, Cifuentes stressed, since so many companies work across discipline in other areas of the performing arts. “Folks across the arts are all welcome to join!” she said.

The stories to be told will be pretty scary. Most dance companies, and nonprofits generally, end their fiscal years on June 30 and pursue their end-of-year fundraising in May and June.

It was in those two key months that NYCharities continued to process the donor gifts it received. But the credit card payments never reached their intended recipients.

A Frightening Time

Among the companies caught up in the apparently fraudulent scheme:

* Stephen Petronio Company was established in 1984, has performed for 24 seasons at the Joyce Theater and is based at 140 Second Ave. in the East Village. It says it lost more than $6,000.

“In the broader field of performing arts, the dance field in particular has traditionally been one of the least funded, and it’s struggled the most financially,” said Yvan Greenberg, the company’s outgoing executive director. “So in our field, $6,000 certainly has a big impact.”

Petronio players were “shocked” by the loss, he said. But there was an added layer of angst because the company’s givers were also on the hook. “You worry about how it might change the perceptions of your donors,” Greenberg said.

As nonprofits increasingly depend on safe, honest and secure online giving platforms to receive their contributions, anything that corrupts that system takes a steep toll.

“Charitable giving is the lifeblood of a nonprofit organization, and the last thing you want to see is donor trust shaken by something like this,” Greenberg added.

* Doug Varone and Dancers was founded 33 years ago, won 11 Bessie Awards for groundbreaking work by an independent dance artist and is based at 260 West Broadway in Tribeca. It says it’s out roughly $6,000 from about 12 to 15 donors.

“It’s a frightening time for us,” said Elizabeth Fort, the general manager of Varone. “We live or die by our donations. So it hurts our ability to function. A major revenue source is gone – but meanwhile, we still have to pay our dancers and pay our rent.”

The company, with an operating budget of around $700,000, doesn’t know the full extent of its losses because it doesn’t know exactly who was unable to make a donation or how many gifts and in what amounts never reached it.

What it does know is that the hit came in the middle of its big annual fundraising pitch in the run-up to the June 30 end of the fiscal year, when contributions typically flow in at a much faster clip.

Still, Varone was luckier than many of its colleagues. Two big donors, horrified by what had happened, were able to kick in $3,000 and $2,500 apiece to help close the gap.

But with the uncertainty over the magnitude of the lost donations, one fact remains: “We’re always out on that financial precipice,” Fort said.

* Lar Lubovitch Dance Company was founded in 1968, has performed in all 50 states and more than 40 other counties and is based at 229 West 42nd St. in Times Square. It says it has no way to determine exactly how much it lost.

All that Lubovitch, which has an $800,000 budget, can know with certainty is that it never received two recurring donations worth $400. But that could be the tip of an iceberg.

“I don’t know what I don’t know, and that’s what we’re most worried about!” said Richard Caples, the company’s executive director.

“Most donors don’t separately inform us when they make a donation, and NYCharities stopped telling us several months ago when someone made a donation on our behalf, so we just have no idea how many one-time contributions we haven’t received,” he said.

“My guess is, we probably don’t have a big exposure, but there’s just no way to know for sure.”

* Ice Theater of New York was founded in 1984, became the first nonprofit professional company to create dancing on ice as an ensemble performing art and is based at the Chelsea Piers rink complex on the Hudson River. It says it lost a little over $10,000.

On Aug. 23, Ice theater became the first affected nonprofit to sue both NYCharities and Cristine Cronin, its founder and president, when it filed a complaint in state Supreme Court in Manhattan alleging it had been “ripped off,” along with multiple other charities.

“By at least May of 2019, defendant NYCharities had begun functioning like a Ponzi scheme, soliciting current donations targeted for certain charities but using those donations to fund its past obligations to other charities...and struggling to hide its misuse of the funds entrusted to it,” the lawsuit says.

The suit was filed on a pro bono basis by William J. Candee IV, a trial lawyer who has been chair of the Ice Theatre for the past five years.

“It’s a labor of love,” Candee said in an interview. “I’m outraged by what happened – NYCharities simply vanished – and I simply want to get back the money we lost.”

Neither NYCharities nor Cristine Cronin returned calls or emails to Straus News over a two-week period.

“We live or die by our donations.”
Elizabeth Fort, general manager of Tribeca-based Doug Varone and Dancers