charitable organizations

We’ve been talking a lot about charitable orgs lately on taxgirl.com - due in large part to a great session that I attended at BlogHer.

This week, one of the bloggers on the business channel, Miki over at Leadership Turn, gave us the heads up on an organization called Any Soldier that helps provide care packages and other items for our soldiers (you can see more about what they do here). Miki’s thoughts were, more or less, whether you support the war or not, this was a good cause.

Miki’s email got me to thinking… I talk a lot about charitable organizations on taxgirl.com and how taxpayers can benefit from making donations. So why not give taxpayers the opportunity to talk about which organizations they choose to support?

So here’s your chance! Tell me which charitable organizations you support or feel are worth supporting - and why if you feel like it. You can include any web links to the organizations that you wish. The ONLY caveat is that it must have tax exempt (501c3) status in the US or the equivalent status abroad. (For the benefit of my readers, most of whom live in the US or Canada, please note the origin of any charity which does not have US status.)

I’ll go first. I tend to support mostly local charities. We support the Morris Arboretum and the Pennsylvania Horticultural Society because I’m a gardening geek. We also donate to the Philadelphia Museum of Art, the Franklin Institute and the Philadelphia Academy of Natural Sciences because I think supporting our local museums is important. We contribute to programs through the Union League of Philadelphia - each year, in particular, my good friend and I spend far too much money at the Ladies’ Luncheon in support of the good work of the Ladies’ Auxiliary (there may be a cocktail or two involved in that one but don’t tell my mother). We also donate to our local church, St. Timothys, our local public television station (I’d be lost without Super WHY so I have to give back somehow) and support our local YMCA.

I hate buying stuff from local schools and churches for their fundraisers, so I usually just make a donation to them instead of buying sausages and gift wrap. More money goes to the charity that way - and the kids don’t have to lug around buckets of cookie dough and melting chocolate bars.

It’s easy to donate “stuff” if you don’t have cash to give, or don’t feel like it. I donate my used cell phones (yes, plural, I’m terrible with them, no mocking me, please) to T-Mobile’s cell re-use program and we donate our used computers to charities which refurbish them for schools and work study programs. We donate used clothes and toys to our local Salvation Army and books to the local library.

I think the only “non-local” charity we really support is the National Trust for Historic Preservation. And of course, this year, I also donated to Accion as part of the b5media Blog Off.

I guess it looks like a lot on paper but it’s really not. We spread our dollars around rather than focus on one particular organization, only cause it’s our style.

I’m also trying to teach my children to have a charitable spirit - this is something that I am very grateful to have learned from my mother and I think it’s important to remind my children how lucky we are. In particular, I try to take them by Alex’ Lemonade Stand whenever it’s in town.

So what about you? What do you support? Or which charities do you recommend?

{ 4 comments }

I attended a great session at BlogHer today about online charitable fundraising and activism. Afterwards, one of the other attendees asked me why I was there.

Hmm.

Well, a lot of it was because I have interest on behalf of my nonprofit clients. Online charitable fundraising and activism is changing the face of the nonprofit world, though more slowly than I thought.

Another reason that I trekked over to see it was my hopefulness that b5media will continue to participate in charitable causes - our Blog Off was my first foray into online charitable fundraising. It was a great experience. The blogosphere offers tremendous opportunity to raise awareness and money in the nonprofit world - in the same way that for profit businesses have been doing for years.

But there’s still a lot of catching up to do.

So here are a few facts that were shared at today’s session that I found interesting:

According to Giving USA, there was $300 billion worth of charitable giving last year. Of that amount, 82% of dollars were given by individuals - I have to say that I was totally floored by that number. I expected to see a much lower percentage. It’s actually kind of amazing that the corporate giving is so low, don’t you think?

Of that number, approximately 1/3 of individual giving comes through faith based organizations like churches. That number, I expected to be higher.

Considering the $300 billion in charitable giving, only about 1% of that is from online giving. 1%! It’s about $2-3 billion.

The session ended with some commentary about why people give. Nonprofit orgs find that people will give for primarily three reasons:

1, Because someone asks (solicitations)
2, When there is a disaster
3, Tax deductions (donations tend to increase at the end of the tax year)

Tax policy at work? Of course. I’ve been mulling a little bit (the session was just a couple of hours ago) and I’m going to follow up on this later. For now, I’m just kind of digesting. 82% of charitable donations are made by individuals - and they cite tax deductions as a primary reason. Clearly, our tax policy is driving some donations. Just think how much more of an impact there might be with an above the line charitable donation (meaning not having to itemize)… More on this later.

{ 4 comments }

Image details: Junk car served by picapp.com

I’m sure that you’ve seen a number of signs and ads that encourage you to donate your vehicle to charity. In our area, they’re plastered all over the place… Do they actually work?

Not so much anymore. In 2004, Congress changed the rules regarding car donations for charity. The rules more or less limited the deduction that you could claim to $500 or the lesser of the car’s fair market value (good) or the actual proceeds from the sale of the car (not so good). The latter has seriously impacted both the number and value of used car donations.

How much of an impact did charities see? The accounting firm of Grant Thornton reports that between tax year 2004 and 2005, the number of car donations valued at more than $500 dropped by approximately 67%. The total value of donations fell more than 80%.

What happened?

The changes in the rules may have made it more appealing for some folks to sell rather than wait to find out the charitable donation value. With the lack of a large deduction as a “sure thing” - the numbers of donations dropped. And the requirement to substantiate the donation by using the value of the sale clearly forced folks to, um, maybe not *fudge* on their returns (not that I’m saying it happened). So a number of lovely cars (perhaps like the one pictured above) that were being donated to charity for “fair market value” were revalued - producing a very different result than before.

But there was good news: despite the reduction in charitable car donations, Americans actually increased the value of overall charitable donations in that same time by a factor of 10%. The study did not specify whether that increase was largely cash or goods. I’m guessing it was heavily stocks and appreciated assets - but that’s just me.

But it does make me wonder… If you donated to charity last year, was it mostly goods, mostly cash or a combination of the two?

{ 5 comments }

Bill Keller is at it again. The man who claimed “A vote for Romney is a vote for Satan” has now declared that Obama is “God’s Enemy” (as shown on his web site).

You can watch his “analysis” of Obama here:

[youtube=http://www.youtube.com/watch?v=Qta_BspVVVo&hl=en&rel=0&color1=0x2b405b&color2=0x6b8ab6]

It’s long - over 8 minutes - so be prepared.

So why should you care about any of this?

I’ll tell you.

You and I subsidize this nonsense.

Yep, Keller’s website, liveprayer.com, is a public charity. It’s part of Bill Keller Ministries, a 501(c)(3) organization. And one would assume that as a 501(c)(3) organization, Bill Keller Ministries knows the rules. And one would also assume that as a self-professed Christian, he would honor those rules. But he clearly doesn’t.

According to the regs, 501(c)(3) organizations are specifically prohibited from making statements for or against political candidates. You can read more about what is and is not allowed here. You can also download the IRS guidelines (with specific examples) as a pdf here.

And yet, Keller feels that these rules simply don’t apply to him. He is currently under investigation by the IRS for his statements about Mitt Romney, including:

*ROMNEY GETTING ELECTED PRESIDENT WILL ULTIMATELY LEAD MILLIONS OF SOULS TO THE ETERNAL FLAMES OF HELL!!!

Keller claims that he is allowed to say and do as he pleases because it’s both God’s calling and free speech.

Funny, I was raised in a Christian home and the tenets of faith as taught to me include love, patience, tolerance and understanding. I don’t remember the part of the Bible wherein Jesus says, “Attack thy neighbors.” I’m pretty sure that it went something like this:

Love the Lord your God with all your heart and with all your soul and with all your mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’ All the Law and the Prophets hang on these two commandments.Matthew 22:36-40

The kind of hate filled speech that comes from the Keller camp doesn’t sound very Christian to me - ironic, since this go round he accuses Obama of not acting very Christian.

On the free speech front, Keller and those who support him claim that the idea of free speech absolves Keller from his comments about candidates. It does not.

Free speech is not absolute. There are limits. You cannot yell “Fire!” in a crowded theatre. You cannot spread lies about another person.

And, as with many other rules and regulations, there are limitations on your speech depending upon what category you fall into… In this case, Bill Keller’s organization made the conscious decision to “opt in” to IRS tax-exempt status. This status grants certain benefits, such as not being subject to federal tax on profits and allowing donors the benefit of a tax deduction for making a contribution to the organization. In exchange, the organization agreed to follow the rules. And the rules say no active politicking. It’s quite simple.

There are political activities that 501(c)(3) organizations can engage in without jeopardizing their exempt status. Organizations are allowed, for example, to take a stand on particular issues or legislation (i.e. abortion, the environment) and providing education on those issues. Organizations cannot, however, publicly endorse, oppose or contribute to a particular candidate. To be clear, the IRS does not require that the organization actually use the words “Don’t vote for…” to violate the standards.

The courts have upheld this the authority of the IRS to revoke status for tax-exempt organizations that engage in prohibited campaign activities. The case that is pointed to the most is Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000), where the court wrote:

The government has a compelling interest in maintaining the integrity of the tax system and in not subsidizing partisan political activity, and Section 501(c)(3) is the least restrictive means of accomplishing that purpose.

Let’s think about this for a moment. Donations to candidates are restricted by Campaign Finance law. If we allow tax exempt organizations - which do not have such limitations - to effectively as agents for or against candidates, what will that do to our political process? Any organization - from Greenpeace to Bill Keller Ministries - could then effectively circumvent campaign laws to tout their favorite candidates at taxpayer expense.

That last bit is particularly important. Remember, as taxpayers, we subsidize tax exempt organizations…

My personal bottom line: I don’t care what Bill Keller has to say about the GOP, the Dems, Romney or Obama. Just don’t do it on my dime.

{ 8 comments }

It cost me nearly $50 to fill my tank this week - $50! And I drive a pretty fuel efficient car. Gas in my home town has hit $4.25/gallon for plain old standard gas. Yuck. Gas prices are just climbing and climbing.

At least there’s a small break: the mileage rate for business miles has finally been upped for tax purposes. The mileage rate will increase by eight cents to 58.5 cents a mile for all business miles driven as of July 1, 2008.

The mileage rate for deductible medical or moving expenses will increase by eight cents to 27 cents a mile.

Sadly, the rate for volunteering at charitable organizations is set by statute and remains at a pathetic 14 cents a mile. Congress, are you reading?

(Image: Newscom)

{ 11 comments }

The Great Blog Off begins in just a few days!

To celebrate the summer solstice (occurring this year on June 20, the first time since 1975 that it hasn’t occurred on June 21), taxgirl and the Business Channel, together with the Entertainment Channel, are participating in The Great Blog Off.

The Great Blog Off is an opportunity to do something good. The Business Channel will be supporting Accion International as our charity for the Great Blog Off. The mission of Accion is:

to give people the tools they need to work their way out of poverty. By providing microloans, business training and other financial services to poor men and women who start their own businesses, Accion’s partner lending organizations help people work their own way up the economic ladder, with dignity and pride. With just a little capital, people can grow their own businesses. They can earn enough to afford basics like running water, better food and schooling for their children.

Basically, Accion helps small businesses all over the world to become established through small, manageable loans and business advice. This concept of microlending is fabulous and their payback record is impressive.

Charity Navigator gives Accion their highest rating for, among other things, having a low administrative expenses to donations ratio.

So, how can you help?

1, Donate. We have partnered with Accion so that you can go directly to their site to make a donation. No amount is too small - every dollar makes a difference! And remember, donations to Accion are tax deductible (you totally knew I was going to bring that up, right?).

2, Spread the Word. Tell your friends. Text your bffs. Link to taxgirl.com or other sites on the Business Channel and let folks know about The Great Blog Off! Tweet about it on twitter (follow me at twitter.com/taxgirl). Whatever you can do to get the word out is much appreciated!

3, Guest Post. I have a lot of posting to do on the day of the Blog Off. If you’re interested in offering a post to help, that would be great. You can send me an email (check out the link in the side bar) if you need more info.

4, Stop By and Comment. I’d love to have your virtual support on the day of the Blog Off. Come on over and chat for awhile!

(Image: Arieanna Schweber)

{ 6 comments }

A federal judge has thrown out the conviction and ordered the release of Samir Al-Monla, a former Islamic charity leader. Al-Monla was immediately released.

The same judge, US District Court Judge Dennis Saylor IV, partially overturned the sentence against two others, Emadeddin Muntasser and Muhammed Mubayyid, ruling that prosecutors failed to prove conspiracy and tax-related charges.

All three were convicted in January of conspiracy to dupe the US government into awarding tax exempt status to Massachusetts Care International, Inc., a now defunct non-profit organization.

The US government claimed that the organization hid its pro-jihad activities, though it did agree that the organization did some charity work. Additionally, the government alleges that the group did not disclose ties to the Al-Kifah Refugee Center, which was linked to the 1993 World Trade Center bombing.

On its application to the IRS, the organization described its mission as helping war orphans, widows and refugees in Muslim nations. Prosecutors argued that, in reality, the organization was a front from the beginning for pro-jihad activities. Judge Saylor ruled that there was “no proof of conspiracy at the beginning of creation of Care as a charity” and that the three did not conspire to lie to the IRS when in made application. As such, the conspiracy charges against the three were dropped.

While Muhammad Mubayyid’s conviction for tax conspiracy was overturned, his convictions for making false statements to federal officials and filing false tax returns remain. The convictions for filing false tax returns involve the failure to disclose the fact that the organization sent out newsletters which supported extremist organizations and have been considered pro-jihad. Unlike a federal income tax return, the return filed for tax-exempt organizations reports annual activities and financial statements and is considered an “information” return. All significant activities must be reported; the defense argued that the failure to include the information was not an intentional omission.

Mubbayid’s co-defendant, Emadeddin Muntasser, similarly did not see his conviction for lying to the FBI overturned. Both Muntasser and Mubayyid remain in jail.

Supporters of the men claim that the case would never have been raised if the charity had not had Muslim ties. Kathleen M. Sullivan, who was part of the team that challenged the initial court ruling, argued, “[n]ever before has there been a tax criminal prosecution for a charity failing to tell you that it’s sending out newsletters that somebody might not like.”

U.S. Attorney Michael Sullivan anticipates that the government will appeal. He had previously regarded the initial convictions as a blow against those who abuse tax laws to support extremism.

** Please note that the now-defunct charity mentioned in this post is not affiliated with CARE International, a charity that fights global poverty.

{ 0 comments }

The Internal Revenue Service has concluded that Senator Barack Obama’s church, the United Church of Christ, did not violate nonprofit tax laws when Senator Obama addressed the denomination’s 50th anniversary General Synod in June 2007.

You may recall that the IRS was investigating the denomination claiming that it had “reasonable belief” that the circumstances surrounding the speech had political overtones. Nonprofit organizations, including churches, are prohibited from engaging in behavior that urges support for a political candidate.

The IRS determined that the UCC had made several attempts to stay in compliance noting that the invitation to Obama came “well before he announced his candidacy and that [he] was invited to speak … in a non-candidate capacity, on how his personal faith intersected with his public life.”

Additionally, the IRS found that the UCC had advised those in attendance that Senator Obama was there as a member of the church and not as a candidate for office, that the audience should not attempt to engage in any political activities, and that the church’s legal counsel had advised Senator Obama’s campaign on the ground rules for the speech.

The IRS also concluded that the UCC did not authorize campaign volunteers to set up tables near the entrance of the Hartford Civic Center and that the UCC website provided a link to the IRS fact sheet on prohibited campaign-related activities by non-profit groups. The church’s legal counsel was also found to have properly advised UCC leaders regarding their responsibilities.

The UCC was represented in the matter by the law firm of Wilmer Cutler Pickering Hale and Dorr on a pro bono basis.

You can read irsmayltr.pdfthe IRS letter in its entirety here.

Technorati Tags:
Barack Obama, IRS, tax

{ 1 comment }

Tax officials have a message for Rev. Al Sharpton: pay up. The IRS has filed personal liens against Sharpton totaling nearly $1 million (the actual value of the lien as of last spring was $931,397). Sharpton also owes nearly $365,558 to the City of New York for unpaid personal income tax; his for-profit company, Rev. Al Communications, currently owes the state of New York $175,962 in delinquent taxes.

And that may be only the top of the iceberg. A current investigation by the U.S. attorney into the finances of Sharpton’s nonprofit group, National Action Network, may yield more.

The nonprofit organization has been messy with their finances over the past few years. The group does not deny that there may be inaccuracies with respect to their reporting and they agree that they had failed to file timely tax returns as required (which have now reportedly been filed). But Charlie King, the acting executive director for National Action Network, blames the group’s successes for their troubles. He says that the organization was not prepared for the sizable increases in donations and income but denies that the failure to account for the donations was purposeful. King told the AP:

The infrastructure was trying to keep up with that pace, and it was not a perfect fit. The National Action Network may not have been perfect, but nothing was going on that was untoward.

What level of income are we talking? Donations to the organization reportedly top $1 million each year. Donors have included such corporate giants as Anheuser-Busch, which gave more than $100,000 last year, and politicians such as New York Gov. David Paterson, Rep. Charles Rangel, and New York Attorney General Andrew Cuomo, each of whom have donated thousands of dollars.

The National Action Network is reportedly also being investigated by the FBI and the IRS for its part in Sharpton’s failed 2004 presidential bid. The investigation is thought to focus on whether Sharpton or the organization committed tax crimes or violations during his campaign; he was previously forced to return public matching funds for breaking fundraising rules during his candidacy.

Investigations into Sharpton’s charities and his personal finances are nothing new. In addition to the current liabilities, Sharpton has failed to file returns on at least one other occasion: he plead guilty for failing to file a state tax return. Nearly 20 years ago, he escaped additional charges when was acquitted of tax fraud and allegations that he stole from one of his charities.

As for Sharpton now? Despite the investigations, he remains upbeat. He claims that these investigations are simply reactions to his presence as a civil rights leader. “Whatever retaliation they do on me, we never stop. I think that that is why they try to intimidate us.”

Adding fuel to that argument is the fact that, in the latest probe, the official overseeing the investigation is U.S. Attorney Benton Campbell. Campbell is the Brooklyn-based prosecutor whom Sharpton is urging to file federal criminal charges in the Sean Bell shooting. Campbell’s office has refused to comment on any of the investigations.

Interesting, no? What do you think? Are the feds overstepping their boundaries to “get back” at Sharpton? Or is he, in fact, crooked?

(Hat Tip: Tax Prof Blog)

{ 4 comments }