CENTER OPERATED WITHOUT CHARTER IN PAST
Story by Russel Mobley
The failure to register with the Tennessee Department of State's Division of Charitable Solicitations and Gaming by Tullahoma Fine Arts Center Executive Director Lucy Hollis is not the first time she ran afoul of state regulations.
From 1983 to 1993, Hollis operated the not-for-profit center with a revoked charter of incorporation.
According to documents obtained from the state, the center's charter was revoked on March 17, 1983 for failing “to respond or file annual reports with the Department of Revenue as required.”
The charter, originally issued in 1968, was not reinstated by the state until August 11, 1993.
During those ten years, Hollis, continued the center's operations, received General Operating Support funds from the Tennessee Arts Commission, and solicited money for the expansion of the center's facility at 401 South Jackson Street in Tullahoma.
In the January 8, 1992 edition of the Tullahoma News, Hollis stated that an additional $25,000 needed to be raised to repay the construction loan for the new addition, which contained a gallery, office and classrooms.
The center is currently under investigation by the state for failing to register with its Division of Charitable Solicitations and Gaming.
On Monday, Tullahoma Mayor Troy Bisby and several aldermen toured the center, as they once again consider allocating funds for TFAC in the city's annual budget. Last fiscal year, they gave the center $13,000.
According to Bisby, “Everything seemed to be in order.” Although, he added, it was apparent that Hollis “needs some help” to operate the center.
CHANGE MADE TO CENTER'S CORPORATE STATUS
According to the last Tennessee Corporation Annual Report Form filed by Tullahoma Fine Arts Center Executive Director Lucy Hollis, the center has changed its status from a public benefit corporation to a mutual benefit corporation.
The form, filed with the Tennessee Department of State on September 30, 2009, is signed by Hollis, who also serves as president of the center's board of directors.
On the center's 990 tax form, also filed in 2009 with the Internal Revenue Service and signed by TFAC Treasurer Brenda Arnold, public support is listed at 98 percent. This qualifies it as a publicly supported organization.
A 1992 annual report signed by Hollis as president, states the center is a public benefit corporation, as do reports from 2000 to 2008.
Efforts to reach the lawyer representing Hollis and the Tullahoma Fine Arts Center for comment were unsuccessful.
It is unclear whether the center filed a change to the TFAC charter with the state, which is required to make it official. If TFAC has changed from public to mutual, it has serious implications for its status as a charitable organization.
According to the state's non-profit guidebook, a public benefit corporation is organized for public or charitable purposes, or that is recognized by the IRS as tax exempt under 501(c)(3). A mutual benefit corporation is defined as any nonprofit corporation that is not organized for public or charitable purposes, or that is not recognized by the IRS as tax exempt under 501(c)(3). A mutual benefit corporation is usually established for the mutual benefit of its members, who generally pay dues to the corporation. Examples of mutual benefit corporations include homeowners associations and clubs.
A March 1, 1971 letter from the Internal Revenue Service granting the center a 501(c)(3) status, states that "Any change in your purposes , character, or method of operation must be reported to us so we may consider the effect of the change on your exempt status."
The center has a dues-paying membership, who, according to TFAC bylaws, are required to meet each November to elect officers and board members. Last year's annual meeting was canceled by Hollis.
