Lots about DiBello Charity Just Doesn’t Add Up, Part 1

Questions about funds, inconsistent statements, lack of accountability

By Will Collette

On April 10, 2000, former Charlestown Parks & Recreation Director (now Town Council member) Lisa DiBello and Deborah Dellolio established a non-profit charity called A Ray of Hope which they have run out of their home at 35 Morley Street.

In its first few years, A Ray of Hope was in the newspapers often, usually with stories about a family they had helped. Lots of Charlestown residents and businesses donated to it. Adding up the sums reported in the media, A Ray of Hope collected at least $100,000, at least based on what DiBello and other board members told the media.

The people who donated that money are entitled to know – morally, as well as legally – where the money went, plus a whole lot more.

But first, some more background. DiBello and Dellolio recruited several of their friends to sign on to the corporation. Their co-incorporators were Charlestown Tax Collector Jo Anne Santos and Lynn Craig, ex-wife of John Craig (Jim Mageau’s 2006 Town Council colleague). From the beginning, DiBello has served as President, Lynn Craig as Vice-President, Santos as Treasurer and Dellolio as Secretary.

By the time A Ray of Hope filed its first annual report with the State of Rhode Island, DiBello added three more board members:

• Charlestown Police Lieutenant Patrick McMahon;
• Lisa Schipritt, who worked with Lisa at the Charlestown Driving Range before it closed;
• Michael Gledhill, called “Sled” is reported to be involved with the Charlestown Ambulance Corps.

A Ray of Hope’s purpose was listed as “raising funds for the purpose of enhancing the lives of those less fortunate” [2001 state annual report, received by the SOS on May 8, 2002]. According to news accounts in the Providence Journal, A Ray of Hope raised a lot of money in its early years – at least $100,000 if you add up the amounts mentioned in the articles.

With so many of its Directors working for the town, directly or indirectly, the early news stories make it seem like A Ray of Hope operated as an unofficial part of town government, though without transparency or accountability.

Charitable organizations like A Ray of Hope are legally obligated to file two types of reports in the interest of preventing fraud and holding these charities accountable.

They must file an annual report with the Rhode Island Secretary of State (SOS) every June. These are simple reports that state the name of the organization and list the members of its board of directors. The state annual reports do not require any financial reporting – it’s the federal IRS-990 reports that require that information.

The SOS office has most RI corporations’ reports (2007 to the present) available on-line. Earlier reports can be obtained at the Secretary of State’s office for fifteen cents a page. I obtained all of the reports not available on-line for only $1.20.

Non-profit organizations like a Ray of Hope must also file annual reports with the Internal Revenue Service. These are called IRS-990 reports. If DiBello was raising the kind of money she told the media she was raising, A Ray of Hope was required to file IRS-990 reports. Plus, starting with reports due in 2008, all non-profits are required to file, at minimum, at least a short form.

The IRS-990 report is the single most important tool the government – and the public – has to keep non-profit charities honest. These records are public records and IRS regulations state the charity must provide these documents the same day when a person asks for them at the charity’s business address. 

In the case of A Ray of Hope, the business address is actually the home address for Lisa DiBello and Deborah Dellolio.

If a person makes a request for copies of the non-profit’s IRS-990 reports, the non-profit MUST provide them within 30 days of the request. 

I didn’t want to simply knock on the door at 35 Morley to make the demand, even though the law says I could. So I sent DiBello a formal request for copies of the records on July 28. I also sent her reminders as the deadline approached and I received no response.

Then I received this letter:

In other words, GET LOST – and don’t contact me anymore.

Well, OK. I double-checked my research and sent a formal complaint to the IRS.

In that complaint to the IRS, I noted that DiBello misrepresented the regulation:

Here are the exact words from the section of the IRS document (IRS Publication 557, Chapter 2, pg. 18) DiBello cited:

Compare the actual IRS language to DiBello’s heavily edited version. I have to wonder if she thought I wouldn’t check.

The IRS further interprets what this section means on the IRS website:

Here's a key fact: the IRS does not provide IRS 990 reports on-line. Period. That's why the IRS rules say the reports must be readily available, at no cost, on the web, either on the organization's website or one that is easily accessible.

In my formal complaint, I provided IRS with records showing that the two most common websites for access to such reports (Guidestar and the Foundation Center’s 990 Finder) have no listing of any IRS-990 reports filed by DiBello’s A Ray of Hope.

I also showed that A Ray of Hope does not maintain a website. It once had a website at www.riroh.org but that website is no longer active. The only traces left of it on Archive.org, an internet tool that retrieves defunct website materials, are dated between 2004 and 2006. And I noted that I knew the IRS does not have a web database for IRS 990 reports.

I also noted that in her letter, DiBello says “pursuant to my calling the IRS to obtain the documents…” By this statement, DiBello is saying she does not have her own IRS 990 reports and could not have produced them if I had asked for them in person. She may have never filed an IRS 990 report given her language, and since there is no record of any such reports on the Foundation Center’s and Guidestar’s databases.

Considering the amount of money the newspaper articles say was raised, that’s a very big problem. How much money was actually raised? Where did it go?

DiBello is required by law to report the exact numbers to the IRS and release those reports to the public.

Did Lisa DiBello's brother get paid to produce
this fund-raising video? 

These questions become all the more important after seeing the YouTube fund-raising video produced by her brother Mark Anthony DiBello. The phone number and e-mail listed for PayPal payments on the slide (to the right>) belonged to Mark Anthony DiBello. You can see that video in “Come on Down.” IRS-990 reports also require disclosure of expenses – such as whether her brother was paid to do internet fund-raising for her – and how much money was actually distributed as charity.

The IRS-990 reports also must include detail on how much the charity paid to its staff, officers or independent contractors and to disclose any insider transactions. The IRS-990 reports would also be helpful in solving the mystery of what happened to the car DiBello won on The Price Is Right and pledged to donate to A Ray of Hope.

The IRS has confirmed receipt of my complaint and their intention to act on it. They did not send me copies of any of her 990 reports, apparently because they don’t have them. They warn that based on IRS standard procedure, “we cannot disclose the status of any investigation.”

IRS can revoke a charity’s tax-exempt status for failure to file IRS-990 reports. It can also levy fines of $20 per day for every day of delinquency up to a maximum of $10,000. The fines for failing to disclose IRS-990 reports on request to a member of the public are also $20 a day, up to $10,000 max. 

If the IRS believes fraud was committed by the charity’s principals, it can refer the matter to the Justice Department for criminal prosecution.

The IRS considers the board members of non-profit organizations to have a "fiduciary responsible" to ensure the organization stays true to its mission and to take prudent measures to make sure funds are not lost, stolen or diverted. The Board is also responsible for making sure the organization files true and honest reports. The IRS-990 requires the organization to certify that board members have seen and approved the reports before they are filed and must also describe the process the group used to ensure this happened. 

In the next installment, we check to see if DiBello did any better in meeting her obligations to the state of Rhode Island.