TSUNAMI RELIEF: SIDE ISSUES FOR FURTHER CONSIDERATION
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for additional information, or visit our website at http://www.charitygovernance.com. We also do on site training. Be sure to consider a donation to a reputable relief organization to aid the victims of the South Asia earthquake-tsunamis disaster. |
STARTING A NEW CHARITY: Several months ago, in a lengthy post, we considered the issues that people should consider before starting a new charity Since December 26, this post has received an unusually high number of hits, raising the possibility that a number of people are thinking about starting a new charity to provide benefits to the victims of this disaster. Don’t start a new charity to aid the victims. There are already very experienced organizations in place providing relief. Providing this relief takes a great deal of planning and experience. Instead of wasting money on start-up costs, you will have far greater impact if you simply contribute the money you would use to fund start up to an existing relief organization. While state charity regulators probably don’t have the resources or time to follow this suggestion, it would be helpful if they and secretaries of state looked for start-up relief organizations in recent filings, and consider contacting these individuals to dissuade them from proceeding. This would not have to be heavy-handed. Unfortunately, a lot of money that could help will be wasted in well-intentioned, but ill-conceived ventures.
We also suspect that some of those looking at our earlier post are not so well-intentioned, but looking to cloak fraudulent schemes in the trappings of charity. This is why those wishing to make a contribution should make contributions only to established and reputable organizations. Under no circumstances should people respond to unsolicited e-mails or telephone calls.
SOLICITING ON BEHALF OF AN EXISTING ORGANIZATION. If your employer, school or religious organization wants to solicit on behalf of an existing relief organization, make sure it has complied with state law. Your organization may be required to register with the charity regulator in your state before commencing solicitation, as well to obtain the permission of the charity on whose behalf your organization is soliciting. We suspect that many organizations will inadvertently ignore these requirements, but the laws in various jurisdictions do impose these sorts of requirements.
TERRORISM FUNDING: In response to the September 11, 2001 terrorist attack, President Bush issued Executive Order 13224 (September 21, 2001), providing, among other things, that every United States person is prohibited from making or receiving any contributions of funds, goods, or services to benefit of those persons listed on the Annex to the order. This order poses issues for relief organizations working in countries with large Muslim populations such as Indonesia, particularly if these organizations are partnering with local NGOs. The list of terrorist organizations is so long we are unable to determine whether the United States has included the Tamil Tigers on the list (Sri Lanka). In response to concerns by charities, the U.S. Treasury issued a series of “Voluntary Best Practices for U.S. Charities.” We would be interested to know whether and how the various relief concerns are addressing Executive Order 13224 as they deliver money and aid. Or in recognition of the devastation and the immediacy of needs, is this a case where the U.S. government will “look the other way” if funds or in-kind donations inadvertently end up in the wrong hands?
SPIKE IN SALARIES?: At this point in the operations, published reports strongly suggest that the relief organizations are behaving admirably. However, we must bring a little cynicism to the table. In a year from now, we wonder whether we will see significant increases in the compensation paid to the leaders of these organizations. It is easy to object to that sort of cynicism, but somebody should remember to take a look at the Form 990s for the next several years to see what happens.
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FOREGOING IS NOT AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. IF LEGAL
ADVICE IS REQUIRED, THE NON-PROFIT OR OTHER PARTY IN QUESTION SHOULD
SEEK THE ADVICE OF QUALIFIED LEGAL COUNSEL. If you liked this post, please visit http://www.charitygovernance.com for a description of our Guide/Tutorial for non-profit directors and officers entitled “Avoiding Trouble While Doing Good: A Guide for the Non-Profit Director and Officer.” Copyright 2005, Auto Didactix LLC. All Rights Reserved. You may not copy any portion of this post to a computer "clipboard" for re-posting anywhere or e-mailing, or otherwise reproduce this post. If you want others to review this post, you may provide them with a link to this web blog. Any use of the material or ideas in this post by reporters or other publishers shall make reference to Jack Siegel, author of "Avoiding Trouble While Doing Good, A Guide for the Non-Profit Director and Officer" and this web blog. For additional information call 773-325-2124 |
