For Want of a Form, or How To 

Set Your Charitable Foundation Back Three Years

Harlan and Susan Ellison at the Nebula Awards, May 2006

photo by Doug Lane

“For over thirty years, Harlan Ellison was my dearest friend on the planet. Those of you who know me, know how important he, and Susan, and his work, were to me. As a beginning writer, long before we ever met, I looked to him for inspiration and the courage to keep going. Once we became friends, I had a very simple philosophy: whatever he needed done, I would make sure it happened. I would've stepped in front of a bus for him, and he knew it, just as he knew that out of the thousands of people he'd met in his life, he could trust me to make sure that his and Susan's last wishes were attended to, and that his legacy would be protected.”

               - Joe Straczynski, 

Facebook post dated 10/16/20

“You must never be frightened. Not of anything. Not of the chance you’ll fail, not of the consequences, not of the cost.

You must never be afraid to go there.”

               - Harlan Ellison, 

Harlan Ellison’s Art Deco Dining Pavilion (online), 8/5/05 

On Monday, August 12, 2024 the Internal Revenue Service updated its monthly list of 501(c)(3) organizations for whom it was revoking charitable status based on failure to file Form 990, Return of Organization Exempt from Income Tax, for three consecutive years. 

Among the organizations freshly listed was EIN number 873507738, The Harlan and Susan Ellison Foundation.

The revocation of charitable status puts the Foundation and its president, J. Michael Straczynski, in a tricky spot, as it makes the organization fully taxable. They cannot receive tax-free donations or offer deductions to donors. Under California law, they will also not be able to distribute charitable funds. There are other ramifications, and while reinstatement is possible, it comes with a swath of requirements.

It’s critical to say at the outset of this account of the public-facing facets of the Foundation: I ascribe no malicious intent or nefarious purpose to anyone involved in any of the events that led to this revocation, and no impropriety is indicated by anything that has occurred. Indeed, Joe Straczynski speaks in a caring and sincere way about the place the Ellisons have in his heart, and how he wants to carry out their wishes. The Foundation has a laudable vision. But malicious intent and carelessness are two different things, and it’s clear a severe breakdown occurred somewhere along the way that resulted in opacity where transparency was required, creating a situation in which warnings were missed and the Foundation was positioned for a catastrophic setback that was wholly avoidable.

* * *

When notable writer and outspoken critic Harlan Ellison died in 2018 at age 84, he left behind his wife Susan, over sixty years worth of fiction, nonfiction, screenplay, and other manuscripts, correspondence with some of the most well-known writers and figures of the 20th century, and an artistically modeled and decorated house lovingly dubbed ‘The Lost Aztec Temple of Mars’ on the north side of the Santa Monica Mountains - a place filled with art, literature, comics, toys, and other possessions accumulated over a lifetime. 

Ellison wished his literary legacy to be preserved and prolonged, as much as he wished his home to be kept in all its fascinating glory, and when he died he had no real reason for concern. Susan, being a quarter-century younger than him, was well-positioned to see to his wishes over time. But her untimely death less than two years later consigned all notions of preservation to the operations of their estate. 

A vision and direction began to take shape on 5/4/2021, when the articles incorporating the Harlan and Susan Ellison Foundation were filed with the California Secretary of State's office (Filing Number 4742200).The three-page document laid out the intended mission of Foundation as a charitable and educational 501(c)(3) organization, with a specified set of goals:

                  “1. To preserve the home of well known author Harlan J. Ellison as a historical landmark and a source of research for 

                  scholars, academicians, other writers, and admirers of Ellison's work, and to encourage literary excellence and works by 

                  new writers; 

                  2. To create and maintain a space that will be available for visitation by the public at large for preserving and showcasing 

                  comic books, art, popular culture, and architecture, which will include both traditional and interactive 'hands on" exhibits; 

                  3. To maintain and protect Harlan Ellison's artifacts, letters, manuscripts, and other historic items and memorabilia, and 

                  to display them for the perpetual enjoyment and education of scholars and the general public; 

                  4. To make decades of correspondence between Harlan Ellison and some of the most famous writers of the 20th century, 

                  and his original manuscripts, available to scholars and universities, researchers and other academicians, and interested 

                  members of the public at large; 

                  5. To provide a limited number of scholarships to low income students who desire to attain a higher education, including 

                  both undergraduate and graduate degrees, at a college, university or trade school, with emphasis in the field of creative 

                  writing; and 

                  6. To solicit and receive public and private funding necessary to carry out the charitable and educational purposes of this 

                  corporation through donations, and by devise, bequest, or by any other means, of real and personal property of any kind, 

                  and to hold, accumulate, invest, or dispose of such property or the income derived therefrom in furtherance of the above 

                  charitable and educational objects of this corporation.”

Though he wasn’t named in the articles of incorporation, the individual spearheading the efforts of the Foundation would be J. Michael Straczynski - writer, friend of the Ellisons, executor of their estate, and soon to be President of the Foundation formed in their names. The articles were signed by Straczynski’s ex-wife and long-time business associate Kathryn Drennan, as ‘Incorporator’. 

Three weeks later, on 5/24/21, the California Secretary of State’s office provided a certified copy of the articles of incorporation. And at this point - at least from a public visibility perspective - the Foundation went quiet. 

Straczynski provided a slow drip feed of information through various social media conduits, including Twitter, Facebook, and his Patreon, regarding the Ellisons’ estate. He addressed rumors and wrote about his personal responsibilities as executor of the Ellisons’ trust in a Facebook post on October 16, 2021:

                  “I don't know if anyone reading this has ever been appointed an executor, but it is a massive undertaking. To be an 

                  executor is to inherit nothing but be responsible for everything, and to implement the last wishes of those who entrusted 

                  you with the totality of their life's work.

                  Consequently, ever since Susan's passing, 80% of my day, every day, has gone into establishing the Trust, dealing with 

                  tax issues, creditors, court documents, lawyers, accountants, affidavits, death certificates, corporate minutes...in simpler 

                  cases, the process only takes a few months, and usually ends by parceling out bequests or auctioning off the estate. But 

                  that is not the case here, because there is the legacy of Harlan's work that must be preserved and enhanced. Looking 

                  after all this, and seeing to Harlan and Susan's wishes, is something I will likely be doing for the rest of my life.

                  Everything that Harlan ever owned, did or wrote will be fiercely protected. Steps are being taken to certify Ellison 

                  Wonderland as a cultural landmark, ensuring that it will remain just as it is long after I have gone to dust.”

Straczynski’s post is informative, but the tone of his lament is a little misleading. While executors in California inherit nothing that isn't stipulated in the deceased’s will, California law (Section 10800 - Compensation for ordinary services) provides for compensation to executors based on the value of the estate as accounted for by the executor: 4% of the first $100,000, 3% on the next $100,000, 2% on the next $800,000, and 1% on the next $9 million. An actual accounting of the value of the Ellisons’ estate is not known, but as an example, an estimate of $1 million in value translates to $23,000 to the executor. While the executor is not required to take their entitled compensation, they also aren’t forced to labor for free tending to the details.    

An August 2021 post by Straczynski first broached the idea of liquidating Harlan Ellison's 1947 Packard to “put the funds into the general house repair fund." There were no takers and no avenues offered for moving it. This would be revisited in 2023.

* * *

On December 6, 2021 Drennan (now the Foundation Secretary) signed the certification attesting the Directors of the Foundation had adopted its bylaws; and Straczynski, now the Foundation’s president, signed both the IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (a 40 page federal form with multiple schedules) and California state Form CT-1, Initial Registration Form, State of California, Office of the Attorney General, Register of Charitable Trusts. Why six months elapsed between establishment of the Foundation and the seeking of tax exempt status is unknown.

The entire packet filed with the State of California and made publicly available on the website operated by the California Attorney General’s office for the purpose of charitable transparency includes the three-page CT-1 form, the Foundation’s bylaws document (25 pages), the Foundation’s 40-page IRS Form 1023, and 68 pages of addendums by the Foundation to expand upon its answers to the IRS form’s questions.

The documents all go into greater detail about how the Foundation would operate, its officers, and its planned mission - though some elements suggest either confusion over the order of execution, or a rush to get paperwork filed. As an example, the State of California registration form asks if the organization has applied for or been granted IRS tax-exempt status. "Yes" is checked. The form asks the date of application for federal tax exemption and is filled in with “12/9/2021”. The IRS form is indeed signed by Straczynski and dated 12/9. As the state form was signed and dated on 12/6, the "Yes" is a bit of a future-fudge. The box for the date of the federal exemption letter granting 501(c)(3) status is filled in, ”Not yet received” (accurate, as the application is still yet to happen), but the next line checks "Yes" for "If known, are contributions to the organization tax deductible.” While the intent is contributions will be tax deductible, the request hasn't been submitted or granted, making this more wishful than actual on the date stated.

There’s also suggestion boilerplate was repurposed from some other filing or project to expedite matters without a close proofreading: page 25 of ADDENDUM TO PART IV; LINE 1 contains an inexplicable error and simply stops in the middle of its confused sentence:

                  "The Foundation will donate completely free of charge to schools and at its fundraising events 100% of the Leonard Nimoy

                  paraphernalia discussed in this Application, such as "T" shirts, hats, school supplies (pens, folders, pencils, etc.), posters,

                  photographs, and other similar merchandise that Harlan or Susan Ellison."

There's no other discussion of "Leonard Nimoy paraphernalia" in the document. The whole paragraph is worth at least a hunched eyebrow.

The CT-1 form contradicts Form 1023 in another confusing fashion. On CT-1 Page 2, Part E, Assets and Accounting Period, the question "If assets (funds, property, etc.) have been received, enter the date first received" is answered with “May 4, 2021”. The 1023 form, which calls for an estimate of financial information for 2021, identifies zero assets expected for the year. This is probably a clerical gaffe on the former (much like the Foundation’s address, which uses an incorrect suite number), with the date of incorporation erroneously used, but it opens the door to the question of whether assets were actually received on the date of incorporation or not.

The California Registry of Charitable Trusts marked the Form CT-1 as received on 12/13/21, but it appears the Foundation was a victim of the holiday season: the Registry sent a letter dated January 5 to the Foundation returning its $25 registration fee, as the initial registration fee had increased to $50 on January 1st (despite the Registry Office stamping the packet received prior to the first of the year.) The 1/5 letter also requested a copy of the IRS determination letter or, absent the letter, the Foundation's FEIN number within thirty days. It appears the wheels of progress ground slowly at the IRS: the determination letter, dated June 30, 2022 would not reach the Foundation until July; the Foundation’s lawyers forwarded it to the Registry on July 15, who stamped it received on July 18. (Despite this delay, the Registry website notes an Issue Date and an Effective Date for the Foundation of 4/29/2022. There's no correspondence in the database indicating how this date was established, but it suggests the Foundation satisfied the Registry's informational needs absent the determination letter around that date.) 

The IRS determination letter fixes dates and requirements for the Foundation: the effective date of their exemption (May 4, 2021); the Foundation’s identification as a public charity as defined by Internal Revenue Code; and the requirement for the Foundation to file Form 990, 990EZ or 990-N annually. Form 990 is the official public record of a charity’s revenues, assets, and expenses. The letter also identified the end of the Foundation’s accounting year (12/31), which in turn set the filing deadline for Form 990 (not stated on the letter, but identified by the IRS online as the 15th day of the fifth month after the accounting period closes - thus for the Foundation, May 15.) 

All of the deadlines to which the Foundation would be measured, by both the IRS and the State of California’s Registry of Charities, flow from those three key dates: the effective date of the exemption, the end-of-fiscal-year date, and the IRS required filing date for Form 990. And while there was a six month delay between incorporating and actually filing for charitable status, the 5/4/21 incorporation date started the clock ticking on the Foundation to file IRS Form 990 for FY 2021 by May 15, 2022, as well as to renew its status annually with the California Attorney General. While the lag in filing and subsequent delay in receipt of the IRS determination resulted in the California Registry establishing an Effective Date for the Foundation of 4/29/2022, the Expiration Date just seventeen days later (on 5/15) was still correct based on the incorporation date, even though the Registry still wouldn't receive the IRS determination letter for two additional months.

The IRS provides copious information for nonprofits on the filing of Form 990. Doing so, along with ensuring other entities - such as the State of California - receive them is wholly the responsibility of the Foundation. So too is making the filings publicly available to anyone who asks, whether by posting them on a website for the Foundation or fulfilling individual requests received by mail or in person. (Note: A personal request for copies of the Foundation’s Form 990 filings - to ascertain if such filings existed for this story - dated July 18, 2024 and confirmed delivered by the USPS to the Foundation’s address of record on July 22 has, to date, gone unanswered despite provision of a contact email to determine copy costs and acceptable payment methods.)

It’s worth noting that for a long time, nonprofits weren't required to file a federal tax form in years where they realized minimal revenue. This changed with passage of the Pension Protection Act of 2006 (signed into law on August 17, 2006). This act required nonprofits with gross receipts of $25,000 or less - not previously required by the IRS to file - to now submit an annual filing. In 2011, the IRS implemented the electronically-filed Form 990-N (also known as the e-Postcard) to make filing easier in low-revenue years.

The determination letter is blunt regarding what happens if a 501(c)(3) fails to meet filing requirements: 

                    “If you don't file a required return or notice for three consecutive years, your exempt status will be 

                    automatically revoked.”

The IRS doesn’t hound a nonprofit to file. They keep track internally of what the receive, and tally up late penalties when they do not, but after three consecutive years of not receiving a filing, the IRS must - by law - revoke 501(c)(3) status and send the organization a Notice CP120A letter advising such. If you wish to get reinstated as a 501(c)(3), you need to begin the process all over again, with additional requirements if your nonprofit actually had high-revenue years that weren’t reported.  

While the Foundation had all the information it needed to circle dates on a calendar and ample tools to navigate the IRS maze, either they never used them or they were failed by whoever they hired to prepare the necessary paperwork. The IRS public record of Form 990 filings indicates nothing on file for the 2021 tax year for the Foundation - not even an expected (based on their Form 1023 estimate for 2021) $0 value 990-N postcard.

* * *

Summer into autumn 2022 was a busy time for the Foundation as it geared up for a pair of major memorabilia sales through Heritage Auctions. The pair would consist of an initial art-heavy sale of pieces from Harlan Ellison's collection, with a secondary sale of some of his comics. These would strike a sour note with some Ellison fans, not only because of the iconic nature of some of the pieces being sold (such as the original cover painting to the 1975 collection DEATHBIRD STORIES created by long-time Ellison art collaborators Leo and Diane Dillon) and word that they would be replaced with high-quality prints, but also because of Straczynski’s previous (and now seemingly contradictory) statement that “Everything that Harlan ever owned, did or wrote will be fiercely protected.” The online discussion and the need to explain the situation on Facebook appeared thorny for Straczynski, who expressed disdain in a 9/13/22 post over the sharing of the news a day earlier: 

                 "This is what happens when folks poke around on websites before the press release (scheduled for this week) 

                  goes out to explain what's going on, why, and what it all means."

While Straczynski’s inference that people snooping where they don't belong and jumping the gun had forced him to reveal things before they were ready, in actuality word of the auction was broken by SF industry news website File 770, which reported the auction information that Heritage had made publicly available on its website.

The press release Straczynski claimed was “scheduled for this week” didn't actually appear for almost three more weeks. In that release on 10/3/22, the first auction was clearly touted as supporting the Foundation's work:

                  "Proceeds from the sale will benefit the Harlan and Susan Ellison Foundation, a nonprofit created by Straczynski. The 

                  foundation is working to turn the late couple's Los Angeles home into what Straczynski calls "a place dedicated to writing, 

                  creativity, art and music."

                  "It will be a "memorial library," he says, "full of books (50,000 by actual count), art (the pieces in the Heritage auction 

                  represent only a small portion of what's there), comics, amazing architecture (complete with a tower, hidden rooms, 

                  gargoyles and the Lost Aztec Temple of Mars)." Straczynski says it will serve "fans of Harlan's work, sure, but also lovers 

                  of art and books and architecture, as well as academics who will be able to study his manuscripts and decades of 

                  correspondences with some of the most famous writers in and out of the science fiction genre.””

On Facebook, in that same 9/13 'Poke Around' post, Straczynski was more frank with Ellison fans about the need to sell some items from Ellison’s collection to enable repairs, citing specific condition of elements of the Ellisons' house and the resources available:

                  "All of that takes money, and I covered all of it out of pocket with some help from the Ellison tier on Patreon, while we 

                  fought the banks for access to the Ellison accounts, which in the end came to only about 200K."

                  "Even without all the repair issues mentioned above, those we've consulted with who have turned the estates of other 

                  writers, artists or politicians into libraries have insisted that you need at least $1M in hand to start the process; double 

                  that would be better."

The first auction on 10/21/22 realized $1,106,882 according to Heritage's summary of the auction; the second, on 11/12/22, added $372,967 - a total of $1,479,849 before accounting for Heritage's 20% Buyers premiums (which it automatically includes in the lot totals) and 15% in seller fees. In presenting a number of items in a 12/8/22 Facebook update, Straczynski wrote: 

                  "This and other work for the Foundation, can now be paid for by funds earned by the recent Heritage Auction, which 

                  total approximately one million dollars." 

An independent accounting of Heritage’s results and the expected percentage deductions confirms an expected payout to the Foundation of slightly over $1 million. 

With $1.2 million in assets publicly identified by Straczynski, work on the house beginning, plus the potential reimbursement for some of Straczynski’s non-covered out-of-pocket house expenses, there was clearly something to report for FY 2022. But as with the previous year, no IRS Form 990 appears on file in the agency’s public database. 

 

* * *

In January 2023, Straczynski revisited the disposition of Harlan Ellison’s 1947 Packard on Facebook, seeking a home for the car. There were again no takers and no viable ideas offered for its disposal.

On February 5, 2023 via his Patreon page, Straczynski shared news and photos of some of the exterior work being done on the Ellisons' house, talking about all the repair effort required outside before they could tend to the business inside. At the same time, Straczynski was working on or promoting the reissues of the Ellison-edited DANGEROUS VISIONS books and the coming releases of GREATEST HITS and THE LAST DANGEROUS VISIONS.

Straczynski surfaced in July 2023 to make his third attempt to liquidate the Packard via Facebook. This time, he got a hit and from all appearances the Packard received a new owner. Whether the Foundation realized anything from the liquidation or incurred any expenses is unknown. What is known is the Foundation’s lack of paperwork had been noticed in California.

In a letter to the Foundation dated 8/11/23, the California AG's Registry of Charitable Trusts informed the Foundation of its delinquency with the Registry, "for failing to submit required annual report(s) and/or renewal fees." It requested the Foundation submit its "Annual Registration Renewal Fee Reports (Form RRF-1), together with required renewal fee and Form CT-TR-1 or IRS Form 990(EZ/PF) for the accounting period(s) that are indicated as Rejected, Incomplete or Not Submitted according to the Registry Verification Search Tool."  The Registry indicates that no Form 990 has been received for 2021. The letter is direct: "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. (Cal. Code Regs., tit. 11, § 999.9.4.) The organization may also be subject to penalties and its registration may be suspended or revoked by the Registry. Once you submit the delinquent record(s), you will be notified of the amount of any late fees that are owed."

On 12/31/23, the FY2023 accounting period for the Foundation closed. At this time, it was still in delinquency with the State of California per the Registry website.

* * *

Based on public postings, Straczynski's Ellison focus in early 2024 seemed wholly on forthcoming publications; there was no additional news provided about house upgrades, but plenty of word about printings and releases, defense of editorial decisions, and several associated interviews to talk up the publishing projects. The publications beg a different question pertinent to the Foundation’s opaque assets and outlays. 

The IRS has specific guidelines for how 501(c)(3) entities can raise money, with restrictions against business or commercial activities unrelated to the organization’s mission. The Ellison titles released or reissued in 2024 all have stated ties not to Ellison’s Kilimanjaro Corporation (which he established in the 1970s for his publishing business and which persists as a legal entity - at least on paper - with Straczynski at the helm), but to the Foundation. DANGEROUS VISIONS and AGAIN, DANGEROUS VISIONS both declare on their copyright page, "Published by arrangement with the Harlan and Susan Ellison Foundation"; DV additionally includes a copyright for the collection by the Foundation, as does the GREATEST HITS volume. Similar statements are found in online listings for the audiobook version of GREATEST HITS.

In an 11/13/20 Patreon post promoting THE LAST DANGEROUS VISIONS, Straczynski specified:

                  “…all royalties from the sales of The Last Dangerous Visions will go to the Trust to help ensure that the Library will 

                  continue for many, many years.”

A digital advance reading copy of THE LAST DANGEROUS VISIONS received in July 2024 notes the copyright information was still to come for the book.

This invites questions of whether commercial book sales through retail outlets such as Amazon and Barnes and Noble are in keeping with the stated purposes of the Foundation and thus not taxable. “Keep Harlan Ellison in print and raise his profile” is a laudable goal, but it’s not one the Foundation enumerated in its articles of incorporation, subsequent bylaws, or request for tax exemption.

In its December 2021 Form 1023 answers, the Foundation appears to have attempted future-proofing general sales of books as a source of revenue, including such without elaboration in its “ADDENDUM TO PART IV; LINE 1 Narrative Description of Your Activities” (Page 13, Item 9 - “Sale of books and other publications”) and again on Page 28 in the “ADDENDUM TO PART IV; LINE 16”. There’s additional elaboration in the ADDENDUM TO PART VI; LINE 16 that draws some distinction to ‘selling books’ as a source of revenue, but under a specific structure:

                  The Foundation may provide a bookstore [at the Ellisons’ house] containing comic books, artwork, posters, CD's and 

                  other memorabilia such as "T" shirts bearing the Foundation's logo and the like, and a small snack booth for the 

                  convenience of persons visiting exhibits. The Foundation maintains that a bookstore is integral to its purpose of educating 

                  the public about the history, art and culture of science fiction, and that almost all exhibits open to the general public 

                  provide a bookstore in some form for similar educational and fundraising purposes. All net proceeds from the sale of 

                  related books and other items, such as Foundation "T" shirts and other memorabilia of the exhibits, are anticipated to be 

                  minimal in amount, and all net proceeds will be utilized exclusively for the conduct of the Foundation's exempt purposes, 

                  including but not limited to maintaining and acquiring new comic books and other arts. The snack booth, if any, will sell 

                  very limited food items and will always be operated without profit. It will be provided solely as a convenience to the 

                  comfort and well being of the many anticipated visitors to the exhibits. The Foundation hereby requests that you specify 

                  in your determination letter that all fundraising activities as detailed in this Application are integral to the Foundation's        

                  charitable activities, and that if such fundraising activities are conducted in the manner described herein, will not result in 

                  the Foundation's receipt of unrelated business income.” 

There are several potential issues here. First, there’s nothing in the Foundation’s stated purpose regarding generally “educating the public about the history, art and culture of science fiction” -  showcasing exhibits of Ellison’s comics, art, etc. is certainly stated, but that’s fairly different from providing or fundraising for a general educational venue focused on science fiction. Second, a bookstore at a museum is a vastly different sales venue for books than Amazon.com or Barnes & Noble. And third, the IRS determination letter does not provide the requested specification regarding permissibility of all fundraising activities as described in the application.

This leaves the entire question of revenue from general, commercial book sales open to IRS interpretation that presumably hinges on whether general education about science fiction is deemed part of the ‘educational’ aspect of the Foundation, and then whether publication of, for example, a ‘greatest hits’ collection by Ellison supports such a ‘general’ education’.

* * *

In early April 2024, the California AG's Registry sent a second delinquency notice to the Foundation. Dated 4/5/24, the letter reiterated the previous notice and again requested “IRS Form 990(-EZ/PF) for the accounting period(s) that are indicated as Rejected, Incomplete or Not Submitted according to the Registry Search Tool." The Registry then indicated two years of Form 990 - for 2021 and 2022 - had not been received. The letter further informs the Foundation the Franchise Tax Board will be notified to disallow the Foundation's tax exemption, at which point they will be treated as a taxable corporation and may be subject to the minimum tax penalty.

The letter further advises: "To avoid the above-described actions, please send all delinquent reports and fees, together with a copy of this letter, to the address set forth above within sixty (60) days of the date of this letter. Any deadlines specified in letters sent previously supersede this one." There was no date in the preceding delinquency letter, making June 4th the date the Registry was expecting a response. As of August 12, the public-facing AG Registrant Details page for the Foundation still marked the organization as Delinquent, and shows the forms have not yet been received.

* * * 

On 5/15/24, the due date for the Foundation to file Form 990 for 2023 passed, and once again no filing was reported by the IRS. By law, the lack of filing made the revocation of charitable status (which would occur on August 12) a foregone legal conclusion.

How the Foundation got here only its directors could say. Whether it’s a case of Straczynski having too much on his plate (recall his commentary on being an executor, then add in being President of the Foundation, plus the effort required to bring Ellison’s work back into print, to manage the house renovations, and Straczynski’s own multiple personal creative projects), a lack of people to effectively manage the business side of the Foundation, or the Foundation entrusting things like tax filings to the wrong people, as its president Straczynski bears the ultimate responsibility for the revocation of its charitable status and the work necessary to recover from it.

Revenue and expenditure filings like Form 990 are public for reasons of transparency, to show donors the money going in, how the charity is using it, and the state of the charity as a whole. In their absence, it's difficult to say what the Foundation’s actual financial state of affairs is.

Few revenue points have been publicly mentioned beyond the Heritage auctions and bank accounts. Those account for $1.2m of unaccounted revenue. The Foundation’s Form 1023 application contained an additional expectation of an ‘unusual grant’ for 2022:

                  “The Foundation anticipates receiving contributions from Harlan and Susan Ellison's family trust in the form of cash 

                  and real property. The home, which is worth approximately $2,000,000, will likely be donated to the Foundation from 

                  the Ellison's family trust in 2022, together with cash of approximately $300,000, for a total unusual grant of in 2022 

                  of $2,300,000.” 

The cash anticipated may or may not have been the money the Foundation ultimately fought the banks to claim, but the house is another matter. Whether or not the Trust donated the home to the Foundation in 2022 is unknown. Based on Straczynski's posts, the Foundation was clearly working on house renovations in 2022 (per 12/8/22 Facebook update) and 2023 (per 2/5/23 Patreon update), suggesting that the house could have been in the control of the Foundation by then, but without paperwork it’s impossible to know.

If the home was transferred as expected and constituted revenue to the Foundation, then potentially $3.2m in FY 2022 not only hasn’t been properly accounted, but should have triggered an additional requirement in the Foundation’s own bylaws:

“Section 7.6. Financial Audit 

                  The corporation shall obtain a financial audit for any tax year in which it receives or accrues gross revenue of TWO 

                  MILLION DOLLARS ($2,000,000.00) or more, excluding grant or contract income from any governmental entity for 

                  which the governmental entity requires an accounting. Any audited financial statements obtained by the corporation, 

                  whether or not required by law, shall be made available for inspection by the Attorney General and by the general public 

                  within nine (9) months after the close of the fiscal year to which the statements relate. For three (3) years, such 

                  statements (a) shall be available at the corporation's principal, regional, and district offices during regular business 

                  hours and (b) shall be made available either by mailing a copy to any person who so requests in person or in writing, or 

                  by posting them on the corporation's website.” 

There’s no indication the required audit was performed, but again, this hinges ultimately on the disposition of the house.

While Straczynski has mentioned his own out-of-pocket expenses (which one expects would be reimbursed by the Foundation in due course of realizing revenue) and more directly identified repairs and modifications to the house, no exact expenditures have ever been identified. Once a charity is suspended in California - which is the next step for the state after a registered 501(c)(3) loses its exempt status - it cannot legally distribute charitable funds (though Registry delinquency letters suggest they can’t do so in a Delinquent status.) This suggests as of August 12, the Foundation either needs to stop work on the house, or determine an alternate non-Foundation means of paying for work until the Foundation can again distribute funds.

Because the Foundation becomes a taxable organization on revocation of its charitable status, per the tax code any revenue received retroactively to May 15, 2024 and onward is taxable. If the Foundation is directly realizing revenues from the sale of any of the four Ellison books, the IRS will now tax that revenue, whether it’s considered germane to the Foundation’s mission or not.

Reinstatement with the IRS is possible, but based on the high-value year of 2022 it would most likely require the Foundation to retroactively file the delinquent Form 990s for 2021 through 2023 as a condition of reinstatement, with additional required statements and the filing of returns/payment of taxes accrued in the interim. The Foundation apparently would not, however, be required to pay the IRS the accrued daily penalties for not filing 990 forms in the first place. This represents a significant bullet dodged, as the maximum penalties for skipping the three Form 990s would have totaled $84,000.

None of this precludes the IRS doing its own deeper investigation of the Foundation’s finances over the past three years.

In California, the loss of exemption will likely move the Foundation from DELINQUENT to SUSPENDED, with its own tax ramifications, penalties, and fees for reinstatement requiring unraveling and completion. If chronically suspended in California - typically longer than one year - the Attorney General's office has an additional category - “Revocation” - at its disposal, which is permanent in California unless directly addressed in writing with the Attorney General.  

There is one final quirk to the story: despite being established in 2021 as a 501(c)(3), despite a roadmap for its first few years laid out for the government to attain that status, despite public enthusiasm for getting the house transformed, and despite Joe Straczynski having a vast internet presence that includes multiple social media accounts he manages and through which he posts on a fairly regular basis, to date the Foundation has no website or social media presence. In three years, it hasn’t issued a single solicitation for donations of any kind. Even the liquidation of Ellison’s Packard - suggested as benefiting efforts on the house - came not through the Foundation, but through Straczynski’s personal Facebook account. There have been no public postings for giving opportunities, whether to directly support work restoring the Ellisons home or to offer a promotional giveaway in exchange for a donation. Aside from public paperwork and Straczynski’s mentions of it, you couldn't prove the Harlan and Susan Ellison Foundation even exists. It is an unfortunate lack of presence after three years of existence, given the point of the Foundation is to fund the goals Straczynski has placed upon himself to support the Ellisons’ legacy. 

The Foundation has run up a steep tab in time, effort, potential tax liability, and potential negative publicity from simply not completing necessary paperwork. With revocation of its charitable status, the Foundation has to go back to square one, substantially setting back many of its proposed activities and timelines. It’s especially inopportune given Los Angeles was just announced this week as the host for the World Science Fiction Convention in 2026, which affords a great opportunity to expand the Foundation’s reach and mission and boost public awareness - provided the Foundation can overcome this setback and put in place what it needs to avoid turning down this road again.

FOR YOUR REFERENCE:

California Attorney General’s Charity Search:
https://rct.doj.ca.gov/Verification/Web/Search.aspx

Search ‘The Harlan and Susan Ellison Foundation’ in Organization Name

IRS Tax Exempt Organization Search:
https://apps.irs.gov/app/eos/
Search by EIN - search term: 873507738, or by Organization Name - search term: The Harlan and Susan Ellison Foundation

(c) 2024 by Douglas J Lane

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