It’s All on the 990

Please, consider this as somewhat of a public service announcement from someone who has worked in non-profit most of a career:

Most of it is pretty profitable and the people pouring cash into them really don’t have the best interests of anyone but themselves at heart, no matter what the ads say. (Shocking, isn’t it?)

In yesterday’s American Thinker, a piece by Ross C. Reeves titled Private Foundations: Benefactors or Malefactors? jumped out at me. Reeves’ primary argument is that the U.S. Income Tax code has huge loopholes that allows wealthy families to contribute huge amounts to charitable foundations which makes that money exempt from taxable income. These foundations are part of the 501(c) code that categorizes and separates the various non-profit categories (foundations are 501(c)(6)s, the most famous being the National Football League. I’m not kidding). The 501(c) code covers education, religious institutions, PACs, foundations, and more making them all tax exempt. Because these wealthy people are putting money in a foundation, where the cash is then invested in securities and other financial instruments and grows as assets, but is part of a tax exempt entity, the profits themselves are tax-exempt. Yes. This happens. A lot. Especially at universities with huge endowments.

Lack of tax revenue isn’t the only issue. From the article:

…their greatest influence on the national agenda is promoting and funding research, public opinion polls, academic studies, advocacy groups, and other intellectual fodder in support of their pet causes. These activities are designed to “leverage” tax dollars in furtherance of their agendas.

I would like to add PBS programming to that list.

Reeves goes on to name foundations that are fronts for wealthy families and their influence and for some reason omits George Soros and only mentions Gates and Warren Buffett much lower in the article. Doesn’t matter. In this arena, not all of the players are household names, but all want to use their money to influence how we all think and to modify our behavior.

Reeves quite correctly states that entrenchment of this modus operandi is not at all American, but it has been going on for a very long time. It’s just now being noticed by a curious population which is using the inter-net to uncover and discover what the monied people out there have been up to in plain sight while the people in the heartland have worked to make them rich. (A good number of the working-class have done well for themselves, but we’ve all seen the really, really, really rich pull away from reality.)

So, in the spirit of sharing information with my fellow Americans, please allow me to recommend a shortcut to find out what the big, east coast based, progressive foundations fund: the 990.

Every non-profit that has a 501(c) status as determined by the Internal Revenue Service, regular old 501(c)(3) or not, after a long process requiring lawyers and filings and a letter over a year later (if you’re not George Soros), must file a form 990 annually with the IRS (the final deadline after extensions is November 15, so most of the 2010 990s still have not been filed). On the 990 is listed the board of directors or trustees, every donor who gave over $5,000 (the exception here is 501(c)(4) which is what PACs are. So, the donors don’t want the public to know who’s paying for lobbying and the creation of legislation that no one reads before it’s passed), every grant given out by the foundation and all expenditures and capital assets. They are a pain to fill out and that generally happens AFTER an audit of end of fiscal year financial statements by an independent auditing firm which generally costs $10,000 or more depending on the size of the non-profit. (Every now and then you find a firm that will do the audit and 990 pro bono, but it’s pretty rare in my experience.) (A whole industry has been created around non-profit finances, that’s for sure. The software choices alone….)

The thing about 990s that a lot of Americans don’t know is that they are public record and that every non-profit out there MUST, as a matter of law, make their 990 available to anyone who asks. That means that the big “family” foundations have nowhere to hide. They do not always publish the information on their websites, and usually, to find the complete 990, a subscription to a service (Foundation Directory or GuideStar) is required. But, that information is available. (The industry wants only people interested in grant applications looking at 990s which is why it’s buried to an extent.)

So, my fellow Americans out in the heartland, want to know where the really, really, really rich put their money that goes to influence how you and I think, how we spend our money and any number of other life choices and decisions? It’s all on the 990.