‘Tis the season to reach down into our pockets past the lint balls and with a little luck find some spare change for the less fortunate. Three-year-old Matthew Chen of Riverside jumped with excitement at the opportunity of slipping his mother’s nice crisp dollar bills into the Salvation Army donation bucket, all the time refusing to relinquish a shiny silver quarter, in his other hand. I feel confident that young Matt isn’t aware that organizations like the Salvation Army and the Red Cross are two of our nation’s premier nonprofit humanitarian organizations. His mother Victoria, on the other hand, knew exactly what she was doing. She was visibly pleased that little Matt experienced such unabashed delight in giving. Besides, how can one argue with the sign hanging above the little red bucket that read, “Salvation Army: Doing the Most Good?”
The Red Cross has delivered relief to casualties of war and victims of disasters since 1881. Together with the Salvation Army and 400 National Guard troops they provided more than 160,000 liters of water and nearly 860,000 meals to approximately 200,000 residents of New York City and the State of New Jersey in nine days following Hurricane Sandy. With each war and disaster, the Red Cross and the Salvation Army dispatch millions in funds and supplies along with personnel to help those in need. Their ongoing efforts help the homeless, the hungry and the sick and they never enter the realm of politics. Like other religious and charitable organizations, they are classified as a not-for-profit organization in accordance with section 501(c)(3) of the Internal Revenue Code (IRC) and are prohibited from engaging in political activities. Their classification affords these organizations a tax-exempt status. There are many noteworthy nonprofits, local and national, that accept donations and put it to work for the greater good of society. Some are focused on research seeking cures for disease and others focus their energies on feeding, clothing and providing shelter to the homeless. For their dedication and hard work, our government affords them tax considerations.
The other popularized not-for-profit organizations are corporations operating exclusively for the purpose of promoting social welfare, a term codified in the Internal Revenue Code. The face of these non-profits include the likes of Grover Norquist, founder and president of Americans for Tax Reform—so long as the tax reform favors the wealthy. There is much liberty taken with the words, “social welfare.” When used by the far right, as written in the IRC, the words mean deregulation, segregation and privatization of education and tax cuts for the wealthy. These nonprofits participate in political campaigns and legislative processes that favor their sociopolitical and economic agendas. They are better known to many as Super PACs. And unlike the Red Cross and Salvation Army, they have no disclosure requirements. Nor are they limited in the amount they can spend on political activity. They too are afforded a tax-exempt status pursuant to section 501(c)(4) of the IRC.
There are non-profits that benefit society and respect people’s rights to practice the faith of their choosing and exercise their civil rights. These organizations place their volunteers in harm’s way to provide comfort and hope to the victims of tragedy in the form of blood and blankets, food and water. And when I think of little Matthew’s innocence I can’t help but feel that the well-intended laws and tax-exempt status of the nonprofit agency has been corrupted and violated for the purpose of promoting special interests, at taxpayer’s expense. The political activities of Super PACs are not required to speak the truth and they get to this with tax-exempt dollars. Why does this sound so wrong, so corrupt?
Neoconservative political advocacy groups, like Americans for Prosperity, founded by the Koch brothers, seek laws that promote the increase of wealth for the wealthy, yet they receive the benefit of a tax-exempt status afforded to humanitarian organizations like the Red Cross. Unlike the Red Cross or the Salvation Army, they do not seek to relieve pain or suffering, feed the hungry or house the homeless. They seek power and wealth and avoid taxes for the privilege of promoting their interests, as they lobby and influence politicians on Capitol Hill and at home in local and state elections.
And yet, as corrupt as this reality may appear, these political action groups are not at the shameful end of this non-profit disaster. That position has been claimed by individuals who exploit our nation’s support of its military men and women. Disabled Veterans National Foundation, a non-profit organization, raised $56 million over the past three years and is indebted to Quadriga Art for $60 million; not a dime went to support disabled veterans, according to CNN. The Society for the Prevention of Cruelty to Animals International’s program Baghdad Pups, which was supposed to match military dogs left behind in Iraq with military personnel, raised nearly $27 million and has outstanding debts of $8.4 million to Quadriga Art. The reportedly abandoned Baghdad Pups never existed. The group both these foundations are indebted to, Quadriga Art International, is a global direct marketing company that offers services to nonprofit organizations and whose tax-exempt status is being investigated by the Senate Finance Committee following a CNN Special Investigation Report in May 2012. In addition, a Harvard-trained lawyer by the reported name of Bobby Thompson has bilked donors out of $100 million with a non-existent Navy Veteran’s Charity. This shameful, unacceptable condition is a reflection of well-intended tax laws gone terribly wrong.
How have we allowed this situation to become what it is today? Last month the non-profit religious organization, Alaska Family Council, also became a nonprofit political action group, Alaska Family Action. With the support of the Koch Brothers and without changing one board member, its location or agenda, the Alaska Family Council will now have tax-free political speech. Jim Minnery, president for both organizations expressed his appreciation for the Citizens United Supreme Court ruling, which allows political and religious groups to be one and the same. He said, “We literally have to switch the light switch off and on when we have a board meeting, because we have to be a separate nonprofit corporation according to IRS regulations.” His comments were met with laughter from the crowd assembled for a fundraiser.
How do you explain to the little Matts of the world and all the innocent, unsuspecting individuals wanting only to contribute to the greater good of a nation, untainted by religion and politics, that the face of nonprofits has changed and not all embody the “Doing the Most Good” mentality?
It appears true tax reform is needed, tax reform that requires the same level of transparency for political action groups as it demands of charitable organizations. Why should political action groups be afforded a tax-exempt status at all? But if they are, they should be stripped of this status whenever they engage in spurious political speech. Nor should religion be allowed to become a nonprofit political action group, which is merely an attempt to impose a single faith on people of many faiths.
I do not wish to rain on the world of “Doing the Most Good,” but it has become increasingly difficult to distinguish the good guys from the bad. Whenever in doubt check the IRS website for credential information and revenue distribution. There are also organizations that rate nonprofits, but under no circumstance should you ever pay for this information.
The people of this country are the most charitable individuals in the world and when disaster strikes we open our homes, our hearts and our wallets, like young Matthew and his mom, Victoria. We reach out to our neighbors with the help of organizations like the Salvation Army and the Red Cross. And it is important that we never lose sight of our compassion, because our compassion is by far our best quality. Happy Holidays!