Rabbi Yaakov Menken replies to my inquiries:
Luke,
You can try to find a story there... really. If you come up with anything for your efforts I'll be very surprised. My accountant is one of the straightest guys there is, and maintains the wall between Project and Team Genesis.
http://forums.torah.org/ was launched in September, and has 378 members. Not bad for three months, and those are only the folks who want to post.
We have ten years of classes in there [Torah.org]. My material from one year would be "a few dozen pages." Mutiply by somewhere between six and ten years of archives, ten parsha classes... currently Torah.org is somewhere over 20,000 pages. I can't claim they are all in use, but I just queried the server.
And the development work wasn't for Torah.org alone, or even primarily, but
for our new audio site and others.
Oh, and TeamGenesis ends up making donations back to Project -- for Team to
simply write it off, says my accountant, would be inappropriate.
PG accomplishes a tremendous amount on very limited financial resources. The truth is that the $62K (some of that, I think, was held off from 2002) was billed at very low rates and must of *that* was donated back. If I weren't running Project Genesis,
TeamGenesis could actually make real money...
I'd love to be making six figures. Hasn't happened. I'd love it, though.
My source writes: "According to the website it looks like he expanded the commercial stuff by purchasing an internet services provider. The long list of programmers on the staff page of torah.org work mainly for teamgenesis. Not sure why they're listed on torah.org, probably to make it look like a big heavy organization. But most of those developers do commercial development for pay. That's the main method of financing for torah.org. Rabbi Menken justifies the skimpy pay by saying that the profits are going to support torah.
"Torah.org is a non-profit and teamgenesis is for profit, and all of the profits from Team Genesis get channeled into Project Genesis, conveniently avoiding taxes. Also, there's this wealthy guy who pays menken's salary (at a tune of a couple of thousand a month) so that he doesn't draw a salary from Team Genesis."
Another source writes: "I'mn trying to understand how much he pulls out of Torah.org/Project Genesis which is a non-profit ($36K as a director + $10K expense account). There is a for profit corporation Teamgenesis COM Inc. which I believe he runs which charges Project Genesis for services ($62K)."
Jack writes:
Looking at guidestar.com Project Genesis tax filings I have a lot of
questions:
1) "Project Genesis is the recognized leader in Jewish education via the Internet, and with over 60,000 participants is the largest ongoing Jewish education program in the world. We offer Judaism in a vibrant, exciting and compelling manner."
They have 60,000 participants? Who recognizes them as the leader?
On their discussion forum they have a memberlist of 378.
http://forums.torah.org/
2)
Board Members: 7
Full-time Employees: 1-5
Part-time Employees: 1-5
Volunteers: 21-100
Who are the board members?
All I found was Board of Directors - Michael Schneider, Chair
What do these employees do for project genesis, I see very little material on their Torah.org website. Is there overlap? Does the $88,173 in payroll get used to work on his for profit company Team Genesis, which does commercial web development.
3)
Programs
"Launched in December 1993 with fifty participants, Project Genesis now serves over 60,000 students worldwide. Each student participates in one or more classes, involving weekly email correspondence. When reprints and forwarded email are included, Project Genesis reaches over 200,000 Jews every week. The organization provides a full curriculum of thirty classes in English, and translated material in Russian, French and other languages. Project Genesis has grown at a rate equaled only by the Internet itself, while teaching Jewish ethics, prayer, philosophy and law to people who represent the full spectrum of modern Jewish life."
200,000?
4)
Goals and Results
Accomplishments for Fiscal Year Ending 06/30/2003
Exceeded 60,000 students.
Launched LEAP (Learning Events and Programs) search engine, to link seeking
web surfers with local programs meeting their needs and interests. Includes
zip-code search in USA.
Now featuring over 30 email classes as well as two audio classes, with a
full multimedia library under construction.
Objectives for Fiscal Year Beginning 07/01/2003
Fully integrate our Jewish Learning Network and LEAP engine with Jewish
outreach organizations nation- and worldwide.
Deploy torahmedia.com, a Digital Media Library featuring lectures by educators around the globe.
Expand our class offerings into many new areas, with a special emphasis on basic-level, introductory classes.
Self Assessment
Project Genesis primarily tracks the number of participants in ongoing classes as the best measure of our reach. We also monitor usage of our web site, and will track users of our database-driven outreach center.
I wish they had a site counter to back up some of these assertions in terms of traffic.
5)
"Project Genesis paid $62,367 last year in internet hosting/design
(presumably to Team Genesis)."
That seems excessive. I've looked at the site, it's not that extensive or complicated. It's a few dozen pages.
Can you do this when you control both the non-profit and for profit entities? It seems to me as inappropriate taking money from a non-profit through a related for-profit company.
6)
Why is Project Genesis selling a computer to TeamGenesis? Why is it not
transferred at cost? Why are they creating an artificial $2,065 gain in
Project Genesis? How is a one year old computer worth more a year later?
7) Who pays Menken a salary? Why? It seems between his salary/expense
account ($46,500) in Project Genesis and the $60,000 he moves into his for-profit company from Project Genesis that he is doing quite well.
8) This all looks fishy to me. I'd like to get a copy of their financial statements for the past few years and get some additional information on TeamGenesis.
It appears to me more accurately, that funds are being channeled the other way from the non-profit Project Genesis into the for-profit Team Genesis through large webhosting and design fees, which is troubling as they are controlled apparently by the same person. The potential overlap of expenses between the companies is something that needs to be examined more closely.
As to avoiding taxes, you would need to see his personal returns. I don't think that claim is accurate, at least from what I'm reading.
Per Guidestar - latest IRS 990 filings for Project Genesis:
$ 88,173 in payroll
$ 62,367 in internet hosting/design
$ 46,500 salary/expense account - Rabbi Menken
_________
$ 197,040 Total
You can evaluate the changes in the website from year to year at http://web.archive.org/web/*/http://www.torah.org
I just don't see any justification. Particularly for internet hosting/design fees.
Mobius at Jewschool ( www.jewschool.com ) could do (and does) such internet hosting/design work for a fraction of the cost and frankly, his "product" is far superior.
>If I weren't running Project Genesis,
>TeamGenesis could actually make real money...
If there is any truth to Menken's claim, why does he need a for-profit entity with a similar name to his non-profit entity at all? Why not run everything through the non-profit entity?
>Oh, and TeamGenesis ends up making donations back
>to Project -- for Team to simply write it off, says my
>accountant, would be inappropriate.
Huh?
1) Team Genesis is obviously profitable then.
2) What would Team Genesis write off? What you've written makes no sense.
Menken has an ethical obligation to disclose the relationship between the 2 entities and address fully the issues raised here. I would like to see audited statements for the past decade for both entities and a justification for these generous web-hosting/web-development fees.
>Why is Project Genesis selling a computer to TeamGenesis? >Why is it not transferred at cost? Why are they creating an >artificial $2,065 gain in Project Genesis? How is a one >year old computer worth more a year later?
It's been suggested to me that this accomplishes the following:
1) The gain in the non-profit is not taxable, no tax consequences.
2) This increases the cost-base of the computer by $2,065 on TeamGenesis's books (something they wouldn't be able to do if they bought it directly).
3) TeamGenesis is able to depreciate the computer by an additional $2,065 over its life and thus reduce its taxable income(something they wouldn't be able to do if they bought it directly).
4) If the computer becomes obsolete, TeamGenesis can use the write-off (Project Genesis couldn't) and the writeoff will be $2,065 than if TeamGenesis had bought the computer directly.
>The truth is that the $62K (some of that, I think, was
>held off from 2002)
Per Guidestar -
I believe this all relates to TeamGenesis (as best as I can determine, I would need to see TeamGenesis' books to confirm some of the professional and consulting fees):
Year ended June 30, 2002
Internet hosting and design = $62,367
Consultants = $4,921
Professional services = $7,651 (may include accounting fees)
Year ended June 30, 2001
Internet provider = $11,713
Internet hosting and design = $6,604
Consultants = $9,422
Professional services = $4.799
Year ended June 30, 2000
Internet provider = $10,808
Consulting = $38,382
Year ended June 30, 1999
Internet provider = $1,359
Consultants = $21,446
Year ended June 30, 1998
Consultants = $29,314
>My accountant is one of the straightest guys there is, and
>maintains the wall between Project and Team Genesis.
I couldn't find accounting fees for 2001 and 2002. They are either no such fees for those years or they were incorrectly put as part of the professional fees/consulting fees rather than being broken out properly on a seperate line (which is titled accounting fees). Or perhaps, no fee was charged.
Given the fees I could find, I doubt Menken's accountant does more than simply take the numbers Menken provides and fill out the 990 form (with maybe some small tax planning advice).
Year ended June 30, 2000
Accounting fees = $730
Year ended June 30, 1999
Accounting fees = $407
Year ended June 30, 1998
Accounting fees = $550
Interesting Team Genesis/Project Genesis connection:
see convicted sex offender Rabbi Benyamin Fleischman:
List of Rabbi Benyamin Fleischman's clients:
...
Project Genesis
...
List of Rabbi Benyamin Fleischman's Friends:
...
Project Genesis
...
Team Genesis
...
CAPALON COMMUNICATIONS LLC - DOMESTIC LIMITED LIABILITY CO (DOM LIMITED LIABILITY COMPANY) - 7/10/2002 - W06896641 - MARYLAND DEPARTMENT OF ASSESSMENTS AND TAXATION
Rabbi Menken also runs the above company. I believe it also does webhosting.
A source who would know writes:
$62k for a year's worth of web design and hosting?! That's insane. What are the day rates at work here for the technical work, and what are the monthly fees for hosting?
Also, all of the metrics claimed for "participants" are highly, highly dubious. I suspect by "participants," he means visitors to the site (and even then, I wonder if he's counting pageviews instead of unique users - if only because all his other metrics strike me as so dodgy). And the idea that he can quantify how many of his group's emails are forwarded - and that the recipients are necessarily Jewish, as he claims - is ridiculous.
Bat Dina writes:
Beyond financials, here are some real important questions to ask Mr. Menken (who made him a rabbi? does he deserve that title?):
What are the goals of torah.org? How are metrics measured to track that these goals are met? Are they met? Are these goals worthwhile goals, to justify pouring so much money into torah.org? What kind of ROI is there for the wealthy donor and all of the not-so-wealthy donors who contribute their hard-earned money to Project Genesis?
My friend, who runs a non-profit, tells me that non-profits with a cash flow of over 100K must have an independent audit of their financial records by someone other than their accountant. Was this done for torah.org? My friend also said that the names of the board members is public info, and the names of major donors and people on the payroll are probably also public info. How can we get this info?
