Citing funding and political factors, the nonprofit steering the namesake Phoenix Pride Festival and Parade announced a bankruptcy filing as the organization faces a creditor's lawsuit.
Phoenix Pride Incorporated filed for Chapter 11 bankruptcy May 28 in federal court, filings show. Phoenix Pride owes $432,257 to creditors, according to court documents. A bulk of that, according to court filings, is a $418,886 claim by Pride Group LLC. The Chandler-based company filed a civil suit March 30 against Phoenix Pride, according to Maricopa County court records.
"Rising operation costs, economic uncertainty, shifts in sponsorship and fundraising partly due to the current political climate and administration, and increasing demands on nonprofit organizations have created circumstances we can no longer navigate alone," read a statement from a May 29 press release signed by the Phoenix Pride Board of Directors and posted on Facebook and Instagram.
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The nonprofit steering the namesake Phoenix Pride Festival and Parade has filed for Chapter 11 bankruptcy, court documents show.
Financial issues beset organization
Chapter 11, unlike Chapter 7, does not involve the shuttering of an organization or a business. Instead, Chapter 11 bankruptcy largely addresses debt repayment.
"Chapter 11 gives us the opportunity to reorganize our finances while continuing operations and working toward a path forward. Our mission has not changed. Our commitment to the LGBTQ+ community remains unwavering," continued the statement from the Phoenix Pride board.
Phoenix Pride's financial problems, including a decline in donations and a spike in event costs, were disclosed at the end of November by the organization.
"The current administration’s actions against Diversity, Equity, Inclusion & Accessibility (DEIA) initiatives, both directly and indirectly, resulted in decreased funding for community organizations and further limited resources for LGBTQ+ programs and services," read a statement by Phoenix Pride at the time.
A 22% cut in the 2024 budget did not curtail monetary shortfalls, including 28% in festival admissions, 50% in beverage sales, 30% in festival sponsorships and $36% in parade sponsorships, Phoenix Pride said.
Event was pushback on LGBTQ+ criminalization
Along with the two-day festival that unfolds annually at Steele Indian School Park in central Phoenix, Phoenix Pride also organizes a coinciding parade. Phoenix Pride yearly holds the Rainbows Festival & Street Fair on a weekend in April at downtown's Heritage Square Park.
When reached by phone the night of May 29, Phoenix Pride spokesperson Jeremy Helfgot told The Arizona Republic he was not at liberty to discuss the bankruptcy filing as legal matters were still developing.
To highlight the organization's significance, Helfgot directed The Republic to a quote he previously gave.
"We are holding two full days of all-ages family-friendly drag shows right here in the heart of downtown Phoenix, less than four miles from the Arizona State Capitol, where drag culture is under severe attack," Helfgot said at the 2023 Rainbows Festival. "We're really here to make a statement."
Phoenix's first Pride event took place June 27, 1981, as a politically fueled march from downtown Phoenix to the state Capitol at a time when Arizona still criminalized same-sex sexual relations and offenders faced jail time. By 1993, a festival would draw 10,000 attendees with 87 booths, according to previous reporting by The Republic.
Some 30 years later, festival representatives said attendance reached more than 50,000 with the organization handing out at least $1 million to the Valley's LGBTQ+ community.
"Our events, programs, partnerships, and community work will continue as we move through this process," read a social media image caption attached to the Phoenix Pride's bankruptcy announcement.
Phoenix Pride was hosting the 3rd Annual Mental Health and Wellness Expo on May 30 at Sahara Behavioral Health in Glendale, the announcement added.
Other Pride celebrations in Arizona confront trouble
This turn of events is the latest in which a Pride organization in Arizona faces major setbacks. An organization even suffered an outright end to its operations.
Just a month before the Tucson Pride Festival, the Tucson Lesbian and Gay Alliance board canceled the event and dissolved the organization in January, all without explanation or apparent community outreach on the mater.
Tucson Pride was marred by financial issues, including a reported misappropriation of nearly $22,000 by a former organization president who pleaded guilty to felony theft.
Navajo Nation Pride posted in late February on Facebook that its June event risked being the organization's last. Billed as the country's largest Indigenous Pride celebration and also known as Diné Pride, the Window Rock, Arizona event needed thousands of dollars in funding to be carried out, the post said.
In early March, a Flagstaff Pride post on Facebook said that "a significantly more challenging funding climate" meant a "scale back" to events in June that included free entry to the organization's Pride in the Pines at Thorpe Park.
