Operation Underground Railroad, a nonprofit built on rescuing children from sex trafficking, paid founder Tim Ballard a compensation of $600,000 in 2023, despite ousting him six months into the year amid sexual assault allegations, according to tax filings.
Ballard resigned on June 22, OUR said, after it conducted an internal investigation into an allegation of misconduct. Subsequently, multiple women have filed civil lawsuits and criminal complaints accusing Ballard of rape, sexual assault and sexual abuse. Ballard has denied the allegations against him.
The organization rebranded itself as OUR Rescue on its 2023 tax filing, filed to the IRS in May. In February, the organization named a new Tammy Lee as the new CEO and revamped its board of directors. The board had previously been comprised of Ballard’s family members and longtime friends.
And last week, OUR announced five new members to its eight-person board of directors.
“We really needed a fresh start,” Lee told The Salt Lake Tribune in an interview.
The new name, she said, emphasizes collaboration with partners in law enforcement, caring for survivors, and working on education about and the prevention of human trafficking. She said all of the organization’s previous work and attention centered on “flashy operations around the world.”
“We are doing things in a very different way,” she said. “We are not the old organization that went in, kicking down doors and taking credit for the work the police were doing. We work alongside and behind police to support their efforts.”
More employees and legal fees
The tax filing show OUR received $42.7 million in donations in 2023, which marks a $16 million increase in donations over the course of 2023.
Salaries, compensation and benefits made up around 38% of the nonprofit’s expenses last year, a total of $16 million, according to the filings. OUR’s total compensation payouts increased by $1.3 million from 2022 to 2023, and its number of employees increased from 131 to 160.
OUR had six employees with compensation of $224,000 or higher in 2023. After Ballard, the organization’s second-highest-paid-employee, Chief Financial Officer Simon Brewer, was paid $460,000 in total compensation in 2023, a pay increase of $60,000.
Ballard’s spokesperson, Chad Kolton, attributed the salary to Ballard’s leadership, saying revenue had grown by 60% from 2022 to 2023. The organization’s expenses exceeded its revenue by $15 million in 2022 and by 3% in 2023. Kolton described Ballard’s salary — which was set by the previous board — as “modest compared to other non-profit CEO packages.”
The organization paid nearly $7.3 million in additional legal services, including contracts with law firms in Salt Lake City, Denver and Phoenix for a total of $1.87 million. OUR’s legal services cost $2.2 million in 2022.
A court filing in November by Ballard’s accusers included details of a proposed severance agreement as the OUR board tried to hastily separate itself from Ballard. The board offered 18 months of his salary, totaling $618,000 and a 2019 Jeep Grand Cherokee, according to the unsigned document.
Ballard’s attorneys have tried to have the documents stricken from the court record, alleging they were stolen by Celeste Borys, who was Ballard’s executive assistant and has alleged that Ballard sexually assaulted her on multiple occasions, which Ballard has denied.
Borys’ attorneys argue that Ballard gave her access to the documents, which, they say, are not proprietary or privileged.
The disclosures also show that Mark Blake, general counsel and Ballard’s brother-in-law, was paid $241,120 for an average of two hours of work per week. Lee said the listed hours only included Blake’s work as a board member, and that he worked additional hours as general counsel.
Last year also saw the release of the movie “Sound of Freedom,” based loosely on Ballard. OUR was not involved in making the film.
(Chris Samuels | The Salt Lake Tribune) Clothing with the Operation Underground Railroad logo is seen in the House gallery at the Capitol, Friday, Jan. 19, 2024.
OUR gave $7.5 million in grants
The 2023 tax filing is the latest document to detail the inner workings of the financially and legally troubled organization for the public. The filing shows the organization made steps toward righting itself financially with the help of securities and investments, and with revenue from a Crossfit gym opened in 2015.
Because of sluggish fundraising and high operating costs in 2022, OUR ran a deficit of $15 million for the year, forcing the nonprofit to tap into a $27 million cash reserve that was depleted to $5.75 million at the end of 2023, according to the filing.
An influx of donations in 2023 and a $3 million increase in investment income helped reduce the deficit to $2.6 million.
OUR collected $2.9 million in revenue and merchandise sales and memberships to the gym, O.U.R. Crossfit. That revenue increased by $1.5 million from the previous year. The gym doubles as the organization’s offices.
The organization’s year-end cash reserves were $800,000 higher in 2023 than in 2022.
The organization donated $2 million less in grants in 2023, giving away about 17.5% of the donations it received. In 2021 and 2022, OUR distributed grants equivalent to about 30% and 34% of its donations, respectively.
Roughly half of the $7.5 million in grants given out by OUR went to law enforcement agencies, which received forensic software and dogs trained to sniff out hard drives and storage devices that might contain child pornography or other evidence of crimes.
Lee attributed the decrease in grant allocation to a strategy change by a previous CEO that temporarily eliminated a category of grant recipients, which has subsequently been brought back.
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