Keep Our Spark Alive
We need your help.
Hello to you all, our beloved supporters. My name is Angie Sedgwick Perry, the executive director here at Matchbox Children's Theatre. I am reaching out to you in this time of need. Your dedication and support deserves our honesty and transparency as appreciation.
MCT was founded in 1975 by amazing people. Fifty years later we are still here with equally amazing people working hard to navigate our bright future, following our mission to spark imaginations by presenting professional quality children's theatre on a consistent basis, while delivering theatre education excellence.
But we are in danger of being forced to close our doors.
Every day our Matchbox team works on leveling up the service we bring to you. We have honed in on a kid-friendly space, organically bringing more in-depth educational opportunities. An expansive craft center bursting with creative hands-on freedom, a makeup room providing the child's own power of transformation, a Dungeons & Dragons storytelling room chocked full of adventurous script writing and character creations. Don't forget a room for the littles offering the imaginative exploration they so naturally embrace! Then on to our Troupe youth program, nurturing our youthful stars more than ever before, offering a safe, welcoming space where they are honored and encouraged at every turn. From welcoming their own scriptwriting, costuming, and every theatre skill they offer into building our programs, to volunteering in our community as star representatives of MCT.
And those aren't the only improvements we have excitedly brought to you lately. We opened Second Act Thrift Store to answer another need in our community. Here our mission is to fuel imaginations and create sustainability for MCT and our community through donated goods, resources, and outreach. We proudly offer food shelf support and vouchers, especially but not exclusively while the Oakland Bridge was down. Our additional team of store volunteers are nothing short of amazing, and we can't thank them enough.
Lastly, we have restructured, updating our Constitution & Bylaws, welcoming fresh faces and new ideas, and adding MCT's first executive director leadership. Here is where I so passionately contribute all that I can.
One of those contributions has been opening the ugly doors to offer forward movement and gain us sustainability. What we have found from the past was embezzlement, altered records, and forgery that began an infested wound. COVID followed, creating a turbulent time of survival. Combining these with a lack of a proper treasurer for many years has led us to this dire current situation. The IRS is now catching up with the financial travesty COVID left all over the U.S., creating such an organizational lag, and our records have combined with devastating discoveries. We have lost our 501(c)3 non-profit status, and owe approximately $70,000.
But we have not been taking this sitting down! We are working tirelessly with a professional finance consultant who specializes in assisting nonprofit organizations, as well as with the IRS to survive this wound and continue our forward journey.
Until we can rectify this detriment, while we can still operate, we cannot accept grants, utilize fundraiser outputs such as Facebook, and we cannot provide donation write-off receipts. Our plan of healing has already begun, and we are doing all that we can!
But it will not be enough on its own. This is where you come in. Please please...show us what Matchbox means to you and donate through our website, shop at our Second Act Thrift Store, or attend our upcoming show A Seussified Christmas Carol! We are thankful for anything you can contribute.
For more information on these helpful options, please click the red buttons. For a full Forward Plan report, and answers to the many questions I am sure you all have, please peruse the following FAQ. Still don't see the answer to your question? You may reach out using the form at the bottom of this page and ask away. We will answer the very best that we are able. We will continuously update this page as our journey continues, to keep you all informed. You may join the mailing list just below this letter to best stay in the know, and receive all updates.
We refuse to give up. Please help us keep our spark lit.
Most sincere thanks,
Angie Sedgwick Perry
Executive Director
STAY IN THE KNOW
FAQ
Please check here weekly as we update this FAQ section. We are fully committed to being open and honest with our supporting community while we navigate this journey.
If you do not see the answer to your question(s) below, you may contact us at the bottom of this page and we will be in touch.
Please understand there are certain details we will not make public, such as anyone's names involved from the past or present and any other information that would harm integrity.
Are you closing?
Not yet. We are still in full position to complete Season 50. We are also in the process of negotiating a payment plan with the IRS as we work on past Form 990 and Form 1023 reinstatement paperwork, which they have graciously given us a timeline to complete. Come summer 2025 we will need to pull back our usual summer services as we continue to rebuild our financial stability in the absence of grant funding. At that time we will evaluate if we have enough funds to continue operation costs while also completing our IRS payments. If we do not have enough at that time, we will be forced to liquidate and close our doors.
What is your plan?
- Hire a finance consultant and communicate with the IRS
Our plan began in March 2024 when more complex financial issues were becoming unearthed. We hired a finance consultant from Propel Nonprofits (https://propelnonprofits.org/) who has been incredible in helping us sort, reconcile, and understand every financial stumble all the way back to 2016. Our executive director reached out to the IRS with a letter of appeal, allowing us time to address the past issues. A great barrier in IRS communication permissions was found when it was realized the MCT's account contact name was still the treasurer from 2016, and had never been changed by a board president. Our executive director immediately hunted down the right IRS department to get this corrected as well, but did not receive an easy answer. The past issues, as well as the change of name, required a 90 day review process. This led us into July. In the meantime we continued to work with Propel and discovered no one in the past had ever properly reconciled the Quickbooks finance records. We diligently reviewed and recalled (to the best of our ability, since not present for those transactions) every single transaction, one by one, from 2016 to current, with every past printout, receipt, and file available. Without fully knowing our true operations numbers for each year, we were unable to accurately complete the required past paperwork to the IRS, so this meticulous step was required. As you can imagine, this took many many months to complete. We are excited to say we have just now completed a full reconcile from 2016 to current!
- Complete all past IRS 990/Schedule A/Schedule O due paperwork
Now that our numbers are accurately tracked and reconciled, we may begin the missing paperwork that must be submitted and accepted by the IRS. Since sizable COVID 2020 grants put us into a different income bracket (more on that below), more complex 990-EZ forms became required starting in 2020. We will complete Fiscal 2021, 2022, 2023 and 2024 990/Schedule A/Schedule O forms. Each takes approximately 30-40 focused hours to complete.
- Complete the IRS Form 1023 for Tax-Exempt Status Reinstatement
Once we have all 990's and their schedule forms turned in, we may begin the application paperwork to request reinstatement of our 501(c)3 nonprofit tax-exempt status. This form alone may take up to 20 focused hours to complete. We have already verified with the IRS we are eligible for this appeal. You may find more information on the process here. We are comforted to know all operations while without our tax-exempt status are retroactively protected up to 15 months from losing status. This means we are secure to operate "as normal" until June of 2025 (although cannot accept grants without current eligibility). We, however, seek to complete this process sooner than that. Our plan is to complete all Form 990's etc through November, then work on completing Form 1023 in December. Then we are back to waiting on the IRS processing time of 90 days while we wait to hear if our paperwork meets approval, or if audits are needed.
- Beginning an IRS Debt Payment Plan in November
During this process we must begin, and successfully make, payments to the IRS to begin rectifying the debt, and gain eligibility for reinstatement. We are currently in negotiations with the IRS on what that monthly number must be, as an accurate reconcile needed completion first, but we do know it will be far beyond what we currently can afford without any grant/large donation funding. The current number owed is just below $70,000. The monthly number will greatly be affected by timeline for payment completion determined by the IRS.
How will you keep this from happening again?
This resulted in a lack of a present and knowledgable treasurer, combined with overwhelmed and under-informed board leadership for many years. What is very good to see is both of those factors no longer exist. MCT has made a series of extremely good business decisions in the past couple years that have brought great change and future sustainability. Appointing the first executive director to handle the growing business full time in 2022, electing a knowledgable and present treasurer, hiring a professional finance consultant for weekly reviews and training year-round, and creating a fantastic community-feeding thrift store has created a powerful core to responsible sustainability for Matchbox Children's Theatre. We just need to get through our past trials and tribulations!
How and where did embezzlement and forgery occur?
Unfortunately yes, embezzlement and forgery were found. A past member from years ago had altered records from shows/events, pocketing income for themselves. This had a painful domino effect for MCT, as we take every penny of every show/event and put it right into the next one as a functional nonprofit. This cut fell deeper and deeper each time affordability recovery was attempted, and no one could quite understand how there was never enough to recover. After months of no treasurer reports and no clear answers on budgets, the board was forced to demand documents be turned over. This turnover process was very delayed before compliance, and records were drastically altered. Upon reconciling we have discovered every dime of this occurrence clear as day. We have found the altered profit/loss reports and receipts, and the true ones. We have consulted with an attorney on pursuing this in legal action, and have been advised against it as the sum is not large enough to balance the cost of pursuit. We can also happily reassure the community that every donation went precisely and safely where it was intended, and were untouched by the embezzlement.
The case of forgery occurred years ago as well with a large purchase poorly decided on, that created a "lemon debt" for Matchbox Children's Theatre to endure for many years. We are still recovering from this purchase, with its cost rolled into the $70,000 that we owe.
New Constitution & Bylaws have been put into place since this occurance to ensure this never happens again. Oversight, term limits, job descriptions and upheld expectations, and better financial procedures all ensure future safety.
Why are you choosing to come forward now and not sooner?
This one has many reasons. When we began tackling a new financial system in the beginning of this year with a Propel professional, the issue at hand was believed to be simple corrections and Quickbooks training, and a small manageable number owed to IRS. As we continued our weekly sessions we slowly were made more aware of how dire the situation actually is.
We also had high hopes we would be able to correct the (much simpler) originally believed financial issue, make payments, and move on with a simple bump in the road. It became clear this was not possible this late summer/fall as the facts gathered, and the true number grew.
We knew things weren't right, and as we corrected them more issues would surface. We wanted to get to the bottom of it before including others, as we feel you all deserve a full and accurate picture.
Why not just apply for grants or ask a foundation/business for a large donation?
While a nonprofit organization is not in good standing with the IRS, it is not legally eligible to receive grant funding straight from a grant organization, nor use avenues such as Facebook fundraising. Furthermore, while we have now lost that tax-exempt status, we cannot receive business donations that require a write-off receipt for said business. We CAN however still receive donations freely given, as well as be gifted funds received from a grant recipient. We do have plans to apply for an Operations Grant once we submit our IRS paperwork, in high hopes the timeline, and a letter of appeal, will help us with Season 51/2025-26 recovery.
I donated to the thrift store and asked for a donation receipt. Does that mean it's no good?
We are working hard to be reinstated before tax return season closes in April, but the truth is we cannot guarantee it as we are at the mercy of so many processing timeline factors. We will keep you up to date on this eligibility, and advise you join the mailing list to ensure you don't miss any information.
IF MCT closes, what will happen to Second Act Thrift Store?
IF MCT closes the hope would be that another 501(c)3 nonprofit organization would take on Second Act to continue filling the community's need. If no other other such organization came forward, then yes unfortunately Second Act Thrift Store would also be forced to close its doors.
How much does cost to operate Matchbox and Second Act?
We are happy to release an accurate financial statement upon request, showing a full breakdown of our operations costs, to help you get a full visual. Please contact us if interested. Right now we can tell you it amounts to approximately $16,000-$20,000 each month to cover two rents, internet, garbage, payroll, multiple insurance policies, phone, utilities, consultant, office/facility materials, costume cleaning/repair, education supplies and more day-to-day costs. While the Oakland Bridge was down we were greatly hurt, as we are currently surviving on the thrift store income alone. Each show adds an additional $5,000-6,000 in costs for low-budget shows, which we try to adhere to so kiddos maximize on experience while having enough at our fingertips to let the imaginations and blossoming skills bring it to life.
When will you be reinstated?
We are driving for end of Spring to have our tax-exempt status returned. The fact is we cannot promise anything. We are doing everything in our power to recover and continue on, but the truth is without the ability to also make payments it will all be for naught. This is why we sorely need any help you can give! Please consider donating right here on our website, shopping at our thrift store, and attending our upcoming shows. You have the power to save us. We will forever return the favor with bringing you the stellar Matchbox Children's Theatre we have become, and would continue to shine above and beyond!
I don't have any extra money. How else can I help?
We are still looking for three more board members to increase our functionality. If you have 8-10 hours to spare/month and excellent skills in accounting, law, marketing, or grant writing we would love your help! We are looking for team players who are passionate about our mission, consistent, reliable, and honest. Please reach out below - we would love to hear from you. We also welcome any volunteers to help clean (we sign for volunteer hours) and organize. For quite some time we have been overwhelmed and short-handed, and have a specific list that would greatly help! For costuming those that are knowledgable, reliable, and can follow Heidi and Carley's lead. For shows any volunteers that are willing to photograph, help with set design/construction, ushering, concessions, and cleanup. And quite frankly - anything you are thinking feel free to ask! All are contingent on passing a Safe Gatherings background check, per our policy in keeping a safe environment for our kiddos.
We are just so happy to see and hear the community's support. Thank you to ALL of you for any contributions.
More questions?
Get in touch and we can talk.