In 2022, Santa Clara Vanguard’s Cadets won the Drum Corps International Championship. It was a crowning achievement for a Santa Clara institution that has spent decades competing at the nation’s highest level for professional drum and bugle corps.
However, simmering below the surface was a series of missteps that have forced Vanguard to cancel its 2023 season and have left the 2024 season up in the air.
Postponement of the 2023 Season
Exactly one month after winning, the Vanguard Cadets were put on “hiatus” by Vanguard management. There would be no 2023 season for the defending champs.
At the time, it appeared the move would allow the organization to keep its main group, the A-Corps, in competition.
Vanguard held auditions and it accepted audition fees. People traveled from all over California and even other parts of the United States for the opportunity to march with the elite group.
But three months later, in December 2022, Vanguard dropped another bombshell. The 2023 season for all of its competitive teams was now cancelled.
“Throughout the past months, a multiplicity of financial stressors have culminated into an unavoidable financial shortfall. This shortfall has been made more insurmountable by lower than expected bingo earnings and the rising cost of summer travel and tour overhead,” said Vanguard in a message to its members.
The message went on to say that Vanguard was exploring the potential of a second bingo game to help increase revenue and bring the A-Corps back for the 2024 season. It looked like it worked. As promised, in October 2023, the website was updated to say that Vanguard was ready to hold auditions for 2024.
Financial Red Flags Flying Over Vanguard’s 2024 season
But that return does not coincide with recent messaging from California’s Department of Justice (DOJ). In a letter dated Nov. 16, 2023, the DOJ reiterated a message Vanguard had been told before: the organization was considered “delinquent” in its status with the Registry of Charitable Trusts.
It’s an issue that has existed for months now. A similar letter was sent to Vanguard in August 2023. It also listed the nonprofit as “delinquent.”
But November’s letter escalated things. The DOJ informed Vanguard it would notify the California Franchise Tax Board to “disallow the tax exemption” and “revoke the organization’s tax-exempt status.”
“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,” read the letter.
If Vanguard is not able to solicit or disburse charitable funds, there can be no 2024 season.
Vanguard CEO Says 2024 Season Will Happen
Vanguard CEO Russell Gavin says the letter from the DOJ is a little misleading and there will be a 2024 season. He points out that “delinquent” is not the same as “suspended” or “revoked” and says that about 20% of the state’s nonprofits are in the same boat as Vanguard coming out of COVID. He says Vanguard is on track to submit all of the documents to be back in compliance within the next few days.
“Vanguard has been working diligently alongside our tax and audit CPAs and legal counsel for many months to return to full compliance with the State of California,” said Gavin. “We anticipate the submission of our audited financial statements to occur in early December. We will hit this target. In the meantime, predictable notifications (like the November 16 letter) have and will continue to occur until we achieve compliance.”
As of Dec. 6, 2023, those documents have not been submitted. Still, Gavin has not wavered from his certainty that they will be.
“I remain confident that we are within a week of submitting the appropriate paperwork to return to full compliance,” Gavin said in a Tuesday night message to The Weekly.
Gavin, who took over in September of this year, has made it a priority to get the organization back in good standing, but he says that takes time and audits don’t happen overnight. When asked why it has taken nearly two years since the close of the 2021 fiscal year to submit audits, he admits there is no good excuse.
“It would be irresponsible for me to say no, it’s all COVID’s fault. I would not say that. I think it is a series of compounding factors,” said Gavin. “I do think it was a combination of bad choices and bad luck, and COVID being a bad luck piece. But it’s also something that really good people have been working really hard to remedy for almost a year now.”
Gavin also says that just before COVID, Vanguard updated its accounting software and that seemed to exacerbate the problem. That, coupled with turnover in key positions within the organization during and post-COVID, has made compliance that much more difficult to achieve.
