I will rarely, if ever again, discuss my nonprofit on this blog. I’ve been offering updates about it on my site and will continue to do updates there. It is a children’s charity and for that reason I do not want it plastered all over this blog or permanently floating all over the Internet (since my site does change and I’ve disallowed archiving, I’m hoping what I write there will not remain).
I’ve spent a year trying to get it off the ground. The main reason I’ve been held back? It is not yet officially designated a 501(c)3 organization, which means that donations to it are not tax-exempt on your federal income-tax return. It is a legal corporation and operates by all known (to me) nonprofit rules, including filing tax reports. But that one little thing, its tax-exempt status, has kept people away in droves.
I’ve approached other children and family organization (like local women’s shelters), hoping to do a joint program and get my charitable activities started. I can’t even get a phone call or e-mail returned. I’ve posted on a couple boards in the grown-up world that are connected with my charities’ proposed activities but was flamed off the boards. Seems that since I didn’t have a 501(c)3 designation, I was some sort of scammer (never mind that I was asking for donations of used, unsellable playthings instead of money). So I sit and work on my other projects because obviously no one is going to let me go ahead with my ideas.
The first legal counsel I had talked with told me that nonprofits frequently operated while their tax-exempt status was pending. He assured me of this. Which is what motivated me to start approaching people. Why sit around and wait on the IRS? Weren’t people bigger than that? Nope, apparently not. (I have now retained the counsel of a different lawyer.)
I realize that there are a ton of “nonprofit†scammers out there. And people happily donate to these scams and they make off with millions of dollars. I can’t even get people to donate used playthings because they’re afraid I’m going to make out like a bandit with their stuff (although they can’t even sell their items on eBay, since they’re so common and essentially valueless). How do the scammers do it? Obviously, they aren’t legal organizations, so how do they fake it well enough to fool people? I’m upfront about our tax-exempt status, which seems to make people think I’m trying to pull something funny. There doesn’t seem to be a “fake it till you make it†in the nonprofit world.
None of this would bother me quite so much if it weren’t for the fact that completely useless nonprofits and causes are getting tons of money and support. Examples:
Blogger/author Dave Cullen collected $26,000 from at least 600 people simply for an ad in Daily Variety (a movie trade magazine) to state that Brokeback Mountain should’ve won best picture. Surprise–he’s gay. Take a look at those numbers though: $26 thousand from 600 people, making it a donation of a little over $40 per person. I can’t even get $1 from anybody that I don’t personally know. Not only that, but Dave Cullen is not a nonprofit, nor does he represent a nonprofit and he raised the money within a week simply to buy a damn newspaper ad. I have no problem with gay people raising awareness or contributing to causes that make a difference, but a trade newspaper ad about a damn Oscar-nominated movie? There are much better ways that $26K could be spent, in my opinion. (Newsweek March 20, 2006, p. 8 )Wynton Marsalis wants “realistic†federal funding of $600 million in order to bring jazz back to New Orleans. He wants to fund a new talent pool, apparently completely forgetting the fact that the “old†talent pool was formed by people with a passion to play no matter what and without any government funding. The music of jazz and blues was formed by adversity, not government grants and paperwork. I have no problem with $600 million being spent rebuilding New Orleans (repairing hospitals and schools comes to mind). But $600 million to fund jazz is ridiculous. Talk about leeching the soul out of something that is pure soul. If Wynton really wants to help, he should use some of his own money, open a club (if he doesn’t have one already), recruit talent and see if anyone is willing to pay a cover charge or buy drinks to listen to his roster of musicians. From what I understand, this is how things used to work. Should he want to get serious, he can try to form a nonprofit that directly addresses his concerns and work towards his goals from there. Personally, I can assure him he’ll have a lot of fun with that one! (Newsweek January 23, 2006 p. 8 )David Lynch meditates. He feels that it has affected him and his life so profoundly, that to bring world peace, he needs to have “factories†of meditators who will meditate about healing the world and bringing peace. A beautiful idea. In fact, it’s such a beautiful idea that he’s managed to raise over $1 million from donors who like this idea (he’s also pledged $400,000 of his own funds). Never mind that his estimated cost of building seven meditation factories housing 50,000 meditators worldwide is over $7 billion. This is a really good idea! I thought my nonprofit idea was good and that people (in a certain demographic) would be crawling all over it, trying to help. Nope. World-peace is the best idea there is, especially when brought about through meditation. Damn. Wish I’d been that brilliant. (The Week January 13, 2006 p. 8 )And then there’s government pork. Some examples, courtesy of the Citizens Against Government Waste website:
$300,000 for the Oquirrh Institute. According to the Institute’s website, “The Oquirrh Institute was founded in Salt Lake City, Utah, during the 2002 Winter Olympic Games. The Institute’s mission is to shine early light on public policy dilemmas and establish innovative solutions. The Oquirrh Institute is currently involved in four areas of concentration: Moving to Competency-Measured Education, Improving Environmental Management, Advancing Health Information and Research and Enhancing Governance Through Technology.†According to USDA testimony, “The principal researchers have not yet determined a completion date on this project.†A total of $500 has been raised from corporations and foundations. Taxpayers have “contributed†$550,000 to Oquirrh since 2004.$2,100,000 for the viticulture consortium in California, New York, and Pennsylvania. According to USDA testimony, “The original goal of this research was to maintain or enhance the competitiveness of the United States viticulture and wine industry in the global market.†(I thought that the wine industry in the US was a huge commercial success. I didn’t realize it needed to be propped up by the government.)$5,600,000 added by the House for the Gallo Center. According to its website, “The Ernest Gallo Clinic & Research Center (EGCRC) at the University of California, San Francisco (UCSF) was established in 1980 to study basic neuroscience and the effects of alcohol and drug abuse on the brain.†There is no mention of any defense-related research. (Again, the wine industry; this time filed under the “Defense†spending category. I guess drunks are a bigger national threat than I’d thought.)$10,000,000 added by the House for the Intercity Bus Security Grant Program, which is meant to improve driver protection, passenger screening, tracking and communication between buses, and overall security assessment. While the individual grants continue to fund profitable companies, such as Coach and Greyhound, the most ridiculous grant in fiscal 2005 was $46,908 for Hampton Jitney, Inc. The Jitney is known primarily for shuttling wealthy New Yorkers to their summer homes in the Hamptons. The company has recently added a limousine service that promises “a custom tailored limousine ride for an unforgettable day.†(Obviously, people using the Hampton Jitney service could barely afford to pay its service fees, hence its need for a grant. I assume that was the rationale, as there is no other real reason for this grant.)$4,500,000 for the Katahdin Iron Works in Maine. This company operated in Maine between 1843 and 1890. According to Mainerec.com, “Although isolated, it was tied closely to outside markets and technological advances in the iron industry. Its beginnings, for example, paralleled a growing demand for iron farm tools, machinery and railroad car wheels. In the end, the iron works failed when huge mills in Pennsylvania brought the nation’s new age of steel.†According to The Wilderness Society, “The project also features new recreational amenities such as trails, water access points and backcountry facilities that will help bring new visitors to the region.†(For all the people that were clamoring to go hiking near the Katahdin Iron Works, well, you should rejoice. The wilderness will soon be tamed for hiking.)$350,000 added by the Senate for the Chicago Greenstreets Program in the state of Senate appropriator Richard Durbin (D-Ill.). According to a participant in the program, Moore Landscapes, Inc., “The City of Chicago’s Greenstreets Program included the design, installation, and maintenance of over 950 hanging baskets this summer. This newly added feature, overflowing with splashes of vivid color and delicate foliage provide a welcoming touch to the streets of Chicago.†(Yes, we need to make the streets of Chicago more welcoming by decorating with hanging baskets.)$400,000 for the Kam Wah Chung & Company Museum in John Day, Oregon. The museum is dedicated to the work of two Chinese immigrants, Lung On and Ing “Doc†Hay. Admission to the museum is $3 for adults, $2.50 for seniors, and $1.50 for students. An estimated 3,000 people visit the museum each year. According to the museum’s website, “Other fund-raising goals the Friends Group has identified include: Acquiring a support building near the Museum to serve as a visitor, education and interpretive center, and to house the Curator’s office. To do this, we anticipate the need to raise approximately $40,000 in the next two years.†By this estimate, the federal contribution could support the construction of 10 buildings. (I love how the Curator needs a separate building to house his or her new office. Overall, it’s a very nice grant for a small, little-known museum that gets about 8 people a day.)$150,000 for the Bulgarian-Macedonian National Education and Cultural Center in Pittsburgh, Pennsylvania. According to its website, “The Bulgarian-Macedonian National Educational And Cultural Center is a nonprofit 501(c)(3) organization founded in 1995. Its mission is to preserve, perpetuate and present the rich cultural heritage of the Bulgarian and Macedonian people. The BMNECC is projected as a ‘must see’ tourist attraction in the Pittsburgh area in which will be contained both permanent and revolving cultural exhibits and a Performing Arts Center as well as an efficient and attractive Museum, Library and Archives.†(Everyone knows that for real Bulgarian and Macedonian culture in the US, you must go to Pittsburgh.)There are a whole lot of other nonprofit activities mentioned but these were ones that caught my eye. Per federal regulations, nonprofits cannot receive huge sources of money year after year unless their public contributions are greater than these sums by a certain percentage. Otherwise, they aren’t public nonprofits (501(c)3) but are instead some sort of private foundation or enterprise. On the other hand, yes, I’m jealous. I would love for my nonprofit to someday make it onto the pork list because of some outrageous, completely inappropriate government grant.
The nonprofit world is not as altruistic as people seem to think it is. Sure, there are scammers but the vast majority of the scams are done completely legally and out of sight of the public. And then there are the people who make money off nonprofits.
There are plenty of “support†businesses in the nonprofit world. I have collected a whole list of website designers who design crappy sites for nonprofits at a hugely inflated rate (presumably the rate is lower than their even-more-inflated rate for commercial enterprises). Then there are the ongoing seminars of all kinds aimed at nonprofits. One can learn all sorts leadership secrets if one’s nonprofit cares to spend a couple hundred dollars a head sending board members to these seminars. There are trade magazines. There are organizations to which nonprofits can belong, some of which restrict their membership to nonprofits who bring in more than X million dollars a year. There’s a whole lot of focus on nonprofit “board†issues, all which costs money to learn about. There are “filing†services for nonprofits (never mind that most of these services file paperwork a grade-schooler can fill out).
Or how about the lawyers who will “prepare†a nonprofit’s tax-exempt application for the IRS, starting at $5,000. You can find cheaper services but you have to really hunt for them. During the preparation process, the lawyer will ask you all sorts of detailed questions about your nonprofit, and then they’ll write down your answers on the application. That’s pretty much it. Dictation and copywriting. (Sure, they’ll advise you if you’re going in the wrong direction but they’ll charge extra for their advising.) They’ll mail the application for you and the postage will be included in your fee.
Of course, we can’t forget CPAs either. I called one CPA to ask a question that my nonprofit’s lawyer wasn’t able to answer. He was a nice guy and answered my question, gratis. I sent in some paperwork as a way of introducing my organization. On that paperwork was an estimated budget that I felt was realistic once we are able to pursue our goals. It was a healthy amount, but plenty of strippers and escorts make way more per year. He called me and was eager to do the tax work for the nonprofit. He was very intrigued by the numbers I’d put down and was wondering if we’d hit our numbers. I explained it was just an estimate (which is what it said on the paperwork) and we hadn’t commenced operations. Haven’t heard back from him.
Everyone wants a piece. It seems the existence of supposedly unlimited, “for a good cause,†tax-free money just puts people’s heads into a spin. Frankly, it disgusts me. I love money, I can’t lie. But it disgusted me to see strippers ripping off men in the clubs and it disgusts me to see opportunists trying to blatantly rip off public charities. There are ways to do things and then there are ways to do things. I will need some of these services soon, like a CPA when we get too big for me to figure out the taxes (I’m optimistic). I hate to think that as I approach these professionals on behalf of my organization that 95% of them are going to be trying to get into the nonprofit’s bank account instead of actually trying to give the organization genuine help and service while establishing a mutually agreeable business relationship. (In defense of the nonprofit’s current lawyer, I do feel she has achieved a very nice working relationship with me.)
I guess what this piece has been about is disillusionment. I thought the “real world†and the nonprofit world would be different from what I’ve experienced in the adult industry these past several years. Better. Isn’t that the common belief? Instead, what I’ve discovered is that my little bubble world was actually a nice place to be. A very sad realization.
This is why government grants are so awesome. Where else can you get free money like this?