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Minnesota charities council revising its standards
Sept 23, 2009;
Star Tribune | When do the charity watchdogs rethink their standards and how do they do it? In Minnesota, where a state charity rating group (the Minnesota Charities Review Council) operates credibility and acceptance comparable to the national groups such as Charity Navigator and BBB Wise Giving Alliance, a public process is underway for a revision of the benchmark measures that donors sometimes turn to in order to decide among potential recipients of their contributions. Among the provisions being reconsidered are the following: 1. increasing the proportion of a nonprofit’s expenses devoted to admin and overhead (from 30 to 40%, that is reducing the percentage that must be spent on programs from 70 to 60%); 2. generating information on community impact to replace “accomplishments” as a measure of nonprofit success; 3. encouraging diversity in hiring staff, board members and volunteers; 4. prohibiting loans to board members; 5. revising and tightening travel and reimbursement policies; and 6. examining the issue of term limits for nonprofit board members. Many nonprofits have been critical of the national rating groups for some time. How much better can a statewide rating organization do in recalibrating its measures to more accurately reflect good management and financial practice in the nonprofit sector?—Rick Cohen

Candidate Pays Off $16,445 in Back Taxes
Sept 24, 2009; The Ledger | Here in DC, we’ve seen an occasional private home here and there, used at least partially as residences, with a nameplate identifying the place as the office of a charitable foundation—thus making the property tax exempt. Given that the DC tax office has been mired in a scandal involving staff purloining millions over a long period of time, we suspect that there haven’t been too many street investigations into these single-family and rowhouse foundation offices-cum-abodes. In Lakeland City, Florida, one James Goetz, a candidate for the city commission, apparently lives in a home owned not by Goetz, but by the Goetz Foundation. According to the tax assessor, to qualify for the tax exemption, the property was not supposed to be Goetz’s residence, but he lived there through at least 2006, 2007, and 2008—and was hit with a bill for unpaid residential back taxes (apparently, once hit with the tax bill for the property since he was living in the foundation building, Goetz applied for a local homestead property tax reduction). In addition, apparently the property changed hands between the Goetz Foundation and other entities during this time, the other entities all headed by Goetz himself. Candidate Goetz will clean up these problems, he pledges. His explanation?  “In our lives, unexpected hiccups happen.” The press didn’t look at the programs of the Goetz Foundation, but we did.  The Foundation’s website indicated that the organization was created in 2004 “initially to help those effected by Hurricane Katrina . . . [and] we were able to bring resources to those in Louisiana who were in need of support.” It is sort of interesting that the foundation was created in 2004 to help victims of Hurricane Katrina, when Katrina didn’t hit Louisiana until August 29, 2005. Under its list of “past projects”, the Foundation notes four: for the 2008 holiday season, working with “Project Hearth” “to help raise items (sic) such as childrens (sic) books, toiletries and food for those who have found themselves below the poverty line this year” and, worth noting, “We have also donated to hundreds of families this season of toys who would normally not have had anything under the tree”; in 2007, “We have raised over $2,000 during the holiday season in which we have purchased food for families who’s (sic) refrigerators are bare”;  for 2006, donating Thanksgiving dinners to 50 families in the Lakeland area; and in 2004-2005, raising unspecified funds for supplies for students in the Lakeland area who were from Louisiana. The Foundation website notes that every dollar raised by the Foundation is spent on programs, no admin. and overhead costs taken. The only posted 990 for the Goetz Foundation available on Guidestar [PDF], a 990-EZ for 2008, contains this information. It identifies $9,500 in contributions, gifts, grants received (Part I, Line 1) and $9,500 in expenses (Part I, Line 17).  However, only $9,400 of expenses are identified, all identified as “benefits paid to or for members” (Line 11), explained on Part III Line 28 as grants: “Our purpose has become (sic) to help families with no means for food, shelter, and gifts for children around the holidays.” Part III Section A lists public support for the Foundation as $2,000 in 2005, $5,000 in 2006, and $5,500 in 2007, before the $9,500 in 2008. Given these numbers, it doesn’t take much in back-of-the-envelope calculations to guess that Lakeland City provided more subsidy to the foundation in terms of foregone taxes and other benefits to the Goetz family able to live in a tax-exempt property than the foundation earned in charitable donations or provided in charitable services.—Rick Cohen


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