Charity Liquor Licenses Drive San Francisco's Festival Scene

But escalating costs of police and city services and new restrictions on noise and alcohol may be bringing the decades-long charity-sponsored binge to an end. 

The San Francisco Bay Guardian calls it "The Death of Fun:" festivals big and small are forced to regroup in the face of tighter rules by Parks and Recreation and higher city fees.  But for us the big story is the deep connection between festivals and charities: what keeps these festivals free is the sale of booze and the sponsorships it brings.  In California only a nonprofit organization can get a one-day liquor license.  That means that all the SF free festivals have a charity connection.  As with gambling, this forced marriage between charity and vice leads to some unexpected consequences.

Some festivals are associated with genuine operating charities, and this being San Francisco, some of them have some pretty unconventional missions.  The vanished Reggae in the Park festival supported Global Exchange (EIN 94-3066686 Form 990), a group that offers "reality tours" to places like Afganistan, Cuba, Laos, and Iran and also sponsors an all-summer cross-country bike trip/political education seminar.  It has a $4 million budget, a staff of 60, and no one on the staff earns more than $44,000 (in 2004).  As I say, only in San Francisco. 

But several of the other charities are less substantial. 

• Conservation Value (EIN 20-0906982 Form 990), the designated charity for the North Beach Jazz Festival, filed an information return in 2004 that reports no income or expense. 
• The other North Beach festival benefits North Beach Citizens (EIN 94-3360013 Form 990), a tiny organization ($170,000) serving the homeless whose largest expense is the $63,000 salary of the executive director. 
• The Howeird Street Fair is the main "cultural event" sponsored by an even smaller group ($25,000) called World Peace Through Technology Organization (EIN Form 990).
• Comedy Day is a little more straightforward: its charity is Comedy Celebration Day, Inc. (EIN Form 990), and it includes a complete income and expense (about $66,000) that also shows who gave and what they gave (hint: most of it is in-kind contribution of promotional consideration by local media).

Of course the festival most closely associated with San Francisco is ... what do you call that event, anyway?  The article with suprising coyness calls it SF Pride, you might call it Gay Pride, but you will look in vain for a charity by that name or any other with the word "pride" in it.  Guidestar calls it "San Francisco Lesbian Gay Freedom Day Parade & Celeb Committee Inc" and the Form 990 says: SF Lesbian/Gay/Bi/Trans Parade Committee (EIN 94-3006693 Form 990).  By any name, it is a $1.2 million organization reporting a staff of two (2004) and executive compensation of $75,674.  Some parade. 

Current Executive Director Lindsey Jones (not the one listed in the 2004 Form 990) explains further that the parade works with fifty local 501(c)(3) organizations from the LGBT and AIDS community to run the beverage concessions (when I look them all up, I'll let you know).  About $150,000 a year goes to these groups—or $3,000 per.  In other words: don't stake your operation on the proceeds of the pride day parade and hope it's a hot day.  Unseasonable temperatures cuts consumption by 10% and puts the event in the red. 

Soon, San Francisco might find out whether it can hold a festival without liquor, which means charging admission.  If that happens, we might see the charities fall completely by the wayside, with the promoters taking center stage.  But more likely we would see legitimate charities participating in a co-promotional role rather than phony charities lending a name on a liquor license. 

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