OPM has announced the launch of a new “universal giving feature.” The effect of the new opportunity is to allow donors to contribute to local charities, not only in their current location, but to charities in past locations or in home towns. Last year the CFC raised $209 million from 800,000 donors. The campaign will run from September 1, 2014 through December 15, 2014. The reality is the gross amount given has been on a steady decline after reaching a peak in 2009 of $273 million. Hopefully, the trend of declining gifts will be reversed.
INTERNAL REVENUESERVICE (IRS).
At the beginning of fiscal year 2014, 15% of exempt organizations’ applications pending were more than one year old. The IRS reported they have now closed 97% of those that are more than a year old. (Comment: We know from our own experience that one application we recently got approved was pending for fifteen months).
UNITED STATES POSTAL SERVICE (USPS).
In its August report, the Alliance of Nonprofit Mailers said that the July results for the USPS “continue to add to the significant improvement in postal finances.” Most interestingly, the report also stated that for a second month in a row the decline in first class volume stopped, and July revenue was up 5.8%. (Comment: All of this is great news for the nonprofit world).
DISTRICT OF COLUMBIA.
Nonprofit employers in the District of Columbia that have more than ten employees (whether full time or part time) may no longer be allowed to ask job applicants to “check a box” as to whether they have ever been arrested. Once a conditional offer of employment has been made, then additional inquiries can be made concerning criminal convictions. (Comment: Because of an unusual formula it is hard to set a specific date as to when this policy will go into effect. Best guess is the beginning of 2015).
As the state moves to implement new laws, it has circulated drafts of the various forms and reports that will be required. We are one of the firms which has received them and Nathan Thomas has worked with the state, sharing the comments and thoughts of our firm. Hopefully, our input will help the process go smoothly. We thank those in Florida responsible for making the decision to share this important step with some of the service providers, like our firm. One of the new requirements is a change in the written disclosure. There must be a reference to the agency’s website, to-wit: www.800helpfla.com.
The Indiana Business Journal reported that the Indiana School of Philanthropy has named Amir Pasic as the successor to Gene Tempel, who will step down as dean of the school on January 20, 2015. Mr. Pasic is currently the vice president of international operations for the Washington DC-based Council for Advancement and Support of Education.
The Court of Appeals of Kentucky reversed an earlier decision by the Rowan Circuit Court that awarded restitution of $338,00 to the ASPCA. The organization volunteered to assist local authorities in handling the rescue of approximately 118 dogs from unsanitary conditions being operated by a woman. The defendant in the case was convicted by the trial court for cruelty to animals and appealed the constitutionality of two of the statutes involved. On appeal, the court upheld the constitutionality of the statutes, but found that the ASPCA did not fall within the definition of a “victim” as that term is defined under state statute. (Blevins v. Commonwealth of Kentucky).
Just a reminder. Fundraising consultants are no longer required to register with the state. Professional solicitors and charities continue to have to register. Contracts between charities and fundraising consultants must still be filed by the charity.
Recently our office was notified that the state is reinstituting the requirement that professional fundraisers file scripts and solicitation materials with all contracts and notice filings. Although this provision is in the state statute, the practice of requiring same was suspended after the Fourth Circuit Court case, Telco Communications v. Carbaugh. Nathan Thomas of this firm has written a letter to the Office of the Secretary State of Maryland reminding them of the existence of the case, and asking for their consideration.
The massive endowment of Harvard University is estimated now to be more than $36 billion! The new head of the endowment fund is Stephen Blyth. (Comment: This is effectively out of circulation. One has to wonder how the school can charge tuition of any consequence, given its resources).
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The insurance company for PBS has filed a lawsuit in Boston to recover more than $2 million allegedly embezzled by the director of the video distribution arm of the organization. So far no criminal charges have been brought, but we expect they will.
Demonstrations took place in front of the state capitol building as a result of the implementation of emergency rules imposing new restrictions on charitable poker activity in the state. The new rules were imposed by the Michigan Gaming and Control Board, which has justified the rules by saying it found illegal activity. Local organization are complaining about the loss of an important funding source.
Appalachian State University sold seventy tons of materials which otherwise would have been taken to landfills, with all of the proceeds going to local charities.
According to an investigative report by a Springfield newspaper, legalized bingo operations in the state continue to be profitable, but with a cost to the charitable and nonprofit sponsors. According to the report, more than half of the revenue goes to pay for prizes with the remaining portion to be divided up between expenses, leaving a small profit for the charitable organizations. (Comment: Like any other form of fundraising, there is a cost whether it is realized or not. One has to wonder about the media incentive to write a report that charitable bingo comes with a cost for its operation).
The elected 26 year old treasurer of the City of Harrisburg has been charged with felony theft and fraudulent conduct for allegedly stealing nearly $8,500 from a tax-exempt organization where he was executive director. (Comment: What is it about politicians and tax-exempt organizations?)
According to Bloomberg, Live Strong suffered a 34% drop in donations in 2013 after its founder, Lance Armstrong, confessed to doping throughout his career. The organization also lost a number of corporate partners and sponsors.
The Washington Attorney General’s Office has filed a civil lawsuit against a husband and wife who had been running an autism outreach program. The essence of the claim being that little or no money went to the stated mission, while a large portion of the funds went for the personal benefits of the couple. These are the same individuals who previously ran another organization against which the state had taken action.
Proving once again that politicians and tax-exempt organizations should never mix, the Milwaukee Sentinel reported that Governor Scott Walker prodded outside groups and individuals to funnel millions of dollars into a pro-Walker group directed by his campaign adviser during his recall elections in 2011 and 2012. All of this comes from court documents that were unsealed on August 29, 2014.
DONOR-ADVISED FUNDS ATTACKED.
Lewis B. Cullman, a philanthropist, wrote in the “New York Review of Books” that donor-advised funds, in effect, rob society of hundreds of millions of dollars that have been earmarked for important charitable causes. He points to the fact that the money is stashed away in financial institutions doing no good for anyone, except those who manage the funds and other financial intermediaries.
Did you realize there are more than 800 million milleneals (those born between 1980 and 2000)? According to the Huffington Post Impact survey of 1,500 persons, 87% made a financial donation to a nonprofit. The survey also found that 47% had volunteered. (Clearly this segment of our population is exceeding earlier expectations of this generation’s generosity).
This year the state regulators’ conference, which is open to the public, will be held October 6, 2014 at the Hyatt Regency in Washington, DC. Two of the more interesting sessions are titled “Are Charities Really Charitable?” and “A Panel on the Ratings and Evaluation of Charities.”
THE ALS DILEMMA.
At last report, more than $53 million has been raised for the ALS Association from the ice bucket challenge. Fortune magazine pointed out that the organization will have another challenge, to-wit: how to spend the money. If it does not spend the money expediently, in theory it faces a problem. The various watchdog agencies grade down organizations that do not spend their money quickly on mission-related work.
The national newspaper of Canada reported that Oxfam has been told by the Canada Revenue Agency (CRA), that its mission statement is too broad to qualify for tax-exempt status. Among the purposes of Oxfam is to prevent poverty which, according to the CRA, might benefit people who are not already poor.