Santa Clara Vanguard makes millions of dollars a year operating bingo out of its building on Space Park Drive near Highway 101. It’s a cash cow that’s helped support the nonprofit for decades and allowed hundreds of young artists to perform at the nation’s highest levels without spending thousands of dollars to do so.
But potential office mismanagement has put the Santa Clara institution in a position where it may be breaking the law and operating an illegal gambling operation.
In a letter dated Sept. 11, 2023, former Vanguard Board Member and Treasurer Richard Lesher asked the Santa Clara City Council and specifically Mayor Lisa Gillmor, who sits on Vanguard’s Board of Directors as an Honorary Member, to take action. Lesher includes documentation that shows Vanguard is not a charity in good standing with the California Department of Justice.
In a memo to Vanguard dated Aug. 25, 2023, the State Department of Justice says Vanguard is “delinquent” with the Registry of Charitable Trusts. Further public records show that Vanguard did not submit a financial audit for 2019, nor did it file with the Registry of Charitable Trusts in 2020 or 2021. As a result, Vanguard has not been registered as a state Charitable Trust since 2021.
“An organization that is listed as delinquent is not in good standing and is prohibited from engaging in conduct for which registration is required, including soliciting or disbursing charitable funds,” writes the Department of Justice.
Lesher says that Vanguard’s inability to solicit donations, combined with the cancelation of the 2023 season, has left the organization in a situation where it could be breaking the law.
California law states that only certain organizations are allowed to operate bingo games (CA Penal Code Sections 326.3 and 326.5) – most specifically ones that are considered tax-exempt under federal law. By not maintaining its charitable designation, Vanguard may be in violation.
What’s more, there are strict laws governing how the funds from bingo are spent. Specifically, that money only be distributed to certain parties and that does not include bingo employees.
Vanguard bingo pays its bingo staff. Lesher says that in the past, the money from membership dues and donations was used to offset the employee costs, keeping Vanguard compliant. However, without those two revenue streams, Lesher believes that Vanguard’s continued operation of bingo has placed it in violation of state law.
Vanguard’s management has been in upheaval over the past few years, with several changeovers in leadership. Most recently, on Sept. 8, Russell Gavin was announced as the new CEO of Vanguard.
He talked to The Weekly about Lesher’s comments. Gavin says that the State’s website is not up to date. He admits that Vanguard is not considered a charity in good standing at the moment but says “delinquent” is not an accurate depiction of the current status. Gavin says the state recognizes that the organization is taking steps to return to compliance and the organization’s status with the state is considered in process.
He also says that he has been “assured” by Vanguard’s lawyers that all the bingo operations are compliant with state law.
The Weekly has been following the current state of Vanguard, including the cancelation of the 2023 season. We will have more details in the coming weeks.