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November 11, 1997 2:00 AM
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Media Network Dissolves

Media Network Dissolves

by Maud Kersnowski




A major fiscal sponsor has dissolved unexpectedly, leaving its
filmmaker-clients confused about the disposition of their funds. In
addition the closure means many filmmakers now lack the ability to accept
non-taxable donations for their projects.


The 18 year-old Media Network, a fiscal sponsor for over 100 films
announced, in a letter recently, that they were dissolving and 80% of the
filmmakers' funds would be available immediately. Media Network decided the
remaining 20% would be dispersed after the company's dissolution was
complete. "When you're dissolving that's the final number. We want to be
sure it's correct," explained executive director, T. Andrew Lewis.


Media Network was originally formed by Mark Weiss, currently of PBS's
P.O.V., with the goal of aiding organizations in search of issue based
films, such as environmental or pro-choice projects. The corporation also
published a guide to these films. As an additional service to filmmakers
Media Network became a fiscal sponsor. Over the years the organization
became more and more dependent on the money brought in by sponsorship fees,
and other projects, such as the film guide, were dropped. A fiscal sponsor
is a non-profit, a 501C3, able to receive money raised by approved
individuals and corporations, which do not have non-profit status. The
funds are then re-granted to the specific project, thus making the moneys
non-taxable for filmmakers and tax deductible for donors. In return for
this and other accounting services Media Network received 5%-7% of all
grants. Fiscal sponsors do not fund raise directly for any individual
projects. However, they may solicit funds for their own organization. It is
illegal for money donated for a specific project to be used for any other
purpose.


The board of directors cited an increasing deficit and decreasing income as
the reason for Media Network's closure. According to Lewis incoming grants
have dropped around $2 million in the last three years. The number of
sponsored projects has remained constant, thus requiring the same amount of
overhead. Lewis would not comment on the size of Media Network's debt.
However, informed sources say it runs decidedly over $100,000.


Media Network has no plans to refund any portion of the 5%-7% percent
service fees, even for checks deposited on the official closure date,
October 31st. According to Lewis, the corporation is concerned about the
possibility of filmmaker paying double fees, one to Media Network and
another to a new fiscal sponsor.


Lewis believes most filmmakers will have no problem finding new
sponsorship. Last Friday, he met with several fiscal sponsors hoping to
smooth the filmmakers' path between organizations. A lengthy or difficult
switch could mean lost dollars to film producers, particularly since Media
Network closed late in the calendar year, the time when most private
donations are made. "The timing couldn't be worse," said Yannis Nookas, one
of Media Network's clients. "The board's decision has in effect created an
emergency."


Many filmmakers were completely unaware of Media Network's financial
plight, according to Nookas. But the news came as no surprise to those
within the organization. Lewis, who was hired last January, said he was
fully aware of the corporation's problems when he signed on as executive
director and that it would "require a lot of work and probably a miracle to
pull this on out."


Several unsuccessful attempts were made to save Media Network. While fund
raising failed to bring in the needed revenue, a 1996 reorganization
attempt was blocked by the five-person staff's union, New York Newspaper
Guild, Local 3. After an impasse was reached this fall the union filed
charges against Media Network with the labor board. Blanca Vazquez, chair
of the board of directors, blames the corporation's dissolution on the
union halting reorganization, which she believes could have revitalized
Media Network. However, Lewis said, "The union discussions were on
administrative problems only. If it weren't for the fiscal problems we'd
still be talking."

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