Because of an estimated outstanding debt to the IRS that began four years ago, the New Haven Gay and Lesbian Community Center Inc., operating as the New Haven Pride Center (NHPC), has suspended all activities and furloughed employees for the following month.
According to their 990 tax forms, in 2022, the center had 12 employees, which also became their biggest expense—salaries and wages totaled more than $660,000 that year.
Their next biggest expense? Their events.
The NHPC had spent more than $100,000 on two different categories of other expenses in 2022 alone: Artist & Speaker Expenses as well as Production Expenses.
The Center owed $200k to the IRS after 2022.
“A nonprofit tax-exempt status under section 501(c)(3) is not automatically threatened just because the organization is holding financial debt or temporarily furloughing employees,” said Andrew Asher, the president of the campus’s Legal Society, “The IRS focuses primarily on whether the organization continues to operate for a recognized charitable purpose, avoids private inurement, and files required annual returns.”
On Jan. 20, 2023, they announced a furlough of eight out of nine of their employees. NHPC’s first shutdown wasn’t because of debt, it was because the Center had not filed taxes for several years.
“Prolonged financial distress can create indirect risks,” said Asher. “First, if the organization cannot carry out its charitable programs, the IRS may question whether it is still operating for an exempt purpose. Additionally, failure to file Form 990 for three consecutive years will result in an automatic revocation of tax-exempt status.”
After reinstating their nonprofit status and receiving $200,000 in funding from the state in February 2023, the NHPC was able to begin the process of bringing back furloughed employees by the second week of February.
Their outstanding debt to the IRS from 2022 accrued interest, and they’ve had to shut down to reassess sustainability as a center.
As of Feb. 28 the center has suspended all activities for at least one month, and furloughed all employees.
The decision poses economic and social challenges for those who work at and are involved with the NHPC.
Recent decisions made by the center have increased their expenses over the past years. They moved to 50 Orange St. in late 2023, and their occupancy expense in 2026 was triple that of 2022.
They went into 2024 with no savings and only 50,000 in assets (which decreased to 12,000 after the fiscal year was over). In 2024, the center’s reported revenue from contributions and grants were the lowest since 2020, nearly $150,000 less than the revenue received in 2022.
The exact amount of debt that the center has paid off has not been made public at press time.
But supporters say there is hope. Community involvement in the price center has increased—with 35 volunteers listed on their 2024 tax returns, a jump from 20 in 2022 and less than 10 in 2023, these numbers offer hope that the Center will continue to thrive even after the temporary furlough.
During these times, the NHPC is encouraging people to continue to seek support and community in local organizations such as A Place to Nourish Your Health and Q Plus.
