Recent reporting by Jeremy Chen of NBC Connecticut has drawn attention to SHEBA, a nonprofit organization whose stated mission is “to provide education and financial resources for minority businesses.” SHEBA received substantial funding through the Blue Hills Civic Association (BHCA), another nonprofit that distributed state grant funds. A state audit and subsequent federal inquiry have raised questions about internal controls, vendor payments, and oversight practices involving the two organizations.
CharityWatch CEO and Executive Director, Laurie Styron, was interviewed for the report:
According to publicly available information, Blue Hills Civic Association received state funds that were then directed through contracts and consulting arrangements to SHEBA and its founder to the tune of more than $1 million, according to NBC Connecticut. A state audit reportedly identified concerns about documentation, invoice substantiation, and internal controls related to those payments.
CharityWatch CEO and Executive Director, Laurie Styron, noted that federal inquiries are not routine occurrences, highlighting the seriousness of regulatory involvement in such matters:
“A nonprofit has to really be doing something very concerning for a governmental office to get involved and start investigating it.”
Public tax filings for SHEBA reflect that the organization raised more than $900,000 in 2024, but reported zero fundraising expenses that year. While there are legitimate scenarios in which a charity may receive grants without incurring significant fundraising costs, the absence of any fundraising expenses whatsoever is a red flag that raises questions about reporting accuracy or classification.
Styron addressed this issue directly:
“How was it possible to raise over $900,000 without spending even one penny in printing, postage, phone, staff time to do it?”
Even modest fundraising activity typically results in at least some associated costs. When financial statements show none, it warrants scrutiny.
Board governance disclosures have also raised concerns. SHEBA’s 2024 tax filing reports that board members contributed zero hours of service to the organization that year. A charity board position is traditionally unpaid, and for that reason it is typical for board members to contribute only a few hours per week or per month to their volunteer positions. That said, governing a nonprofit, even on a volunteer basis, does require a time commitment.
“You would at least see half an hour, an hour per week or per month of board members overseeing the governance of the organization.”
Another issue that often arises in situations like this involves state-level compliance. A nonprofit may hold federal 501(c)(3) status but still be required to register separately with state charity regulators before soliciting funds.
According to NBC Connecticut, “While SHEBA is a federally registered 501(c)(3) charity, the Department of Consumer Protection told NBC Connecticut they don’t have a charity permit on file with the state, which is required for fundraising.”
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