For more than a decade, the youth-and-civics group Rock the Vote has been the coolest kid on the political playground.
Founded in Los Angeles in 1990 with the goal of politically empowering the MTV generation, Rock the Vote quickly became a cause celebre among Democratic and entertainment power brokers. At rock concerts, on college campuses and with ads featuring a near-naked Madonna, the group helped register millions of young voters.
But as it moves into its 16th year, Rock the Vote itself is being rocked by crisis.
Saddled with about $700,000 in debt, the group has cut its staff from more than 20 people in 2004 to just two today. Its president, who left last summer amid disagreement about the organization's direction, has yet to be replaced. And last month, Rock the Vote was sued for the second time in just eight months.
Fred Goldring, a music attorney and chairman of Rock the Vote's board, says dwindling donations are to blame.
"We're like the popular kid who never gets asked out because everyone thinks he already has a date," said Goldring, who presides over a board of more than 20 people, including MTV President Judy McGrath, Recording Industry Assn. of America general manager Joel Flatow and, until recently, Viacom Chief Executive Tom Freston. "Everyone thinks this group is rich because of our enormous visibility."
But lackluster fundraising is just one of Rock the Vote's problems. The organization has typically recruited young executives who embodied its mission. But according to more than half a dozen people familiar with the situation, Rock the Vote's staff did not have the business acumen to manage a large nonprofit.
Rock the Vote's former president says the group's priorities are too often buffeted by board members -- many of them top music industry executives -- who appear to care more about promoting artists than registering voters.
"Board members wanted to use Rock the Vote events to give their artists visibility," said Jehmu Greene, who left the organization after leading it for three years. "But sometimes it was way too expensive, or would send the wrong message, like having a rock band play when we're trying to register kids into hip-hop."
Rock the Vote was formed when Jeff Ayeroff, then co-chief of Virgin Records, hit upon the idea of using the marketing power of the music industry to register 18- to 25-year-old voters.
Music's biggest stars embraced the group, volunteering to film public service announcements that aired on MTV. Companies such as Motorola and DKNY became sponsors. Rock the Vote buses crossed the nation, signing up voters.
It's unclear what effect Rock the Vote had. In 2000, a decade after the group's founding, 9% fewer young people voted in the presidential election than had eight years before, according to the Center for Information & Research on Civic Learning & Engagement.
However, in 2004 -- when U.S. Sen. John Kerry challenged President Bush -- youth voting surged by 11% to more than 20 million ballots. Rock the Vote registered 1.4 million voters that election cycle.
That recruiting cost a lot of money, and according to filings with the Internal Revenue Service, Rock the Vote often spent more than it had raised.
From 2000 to 2004, Rock the Vote's annual fundraising grew 69%. The group raised a total of $10.4 million in that period, IRS documents show. But in the same period, the organization spent more than $11.1 million and ended two of those years owing more than it had in the bank.
"They basically ran out of money," said Mark Weiner, president of Financial Innovations, a Rhode Island-based merchandising firm. Weiner says he does not expect that the group will pay the $50,000 it owes him.
Given the cyclical nature of campaigning, political organizations often overspend during presidential election years. Still, it is unusual for a group as established as Rock the Vote to live so close to the edge.
For instance, fundraising at the League of Conservation Voters, an environmental advocacy group, fell 60% in 2003 to $1.4 million, but the group significantly scaled back spending and ended the year with $575,000.
By comparison, Rock the Vote's fundraising fell by a comparatively modest 22% in 2003, to $1.3 million, but the group spent $1.66 million, ending the year $241,000 in debt.
According to Ayeroff and other board members, the group's financial problems worsened last year, when it relocated its annual fundraising gala -- typically held during Grammy week in Los Angeles -- to Washington. The event drew lawmakers from both parties, but spiraling costs consumed most of the donated funds, Ayeroff said.
Just days after the gala, Rock the Vote was sued by fundraising firm ConklinScott, which the group owed $25,000. Both parties declined to discuss the pending suit.