JUNE 2018



A Dallas man who received donations from large companies by scamming them into matching phony employee donations to the tune of $668,000 has pled guilty in U.S. District Court in Atlanta, Georgia. The government alleged that the money was actually used for personal vacations, jewelry, and the like.

Source:  http://www.mdjonline.com/neighbor_newspapers/west_georgia/news/dallas-man-admits-he-took-hundreds-of-thousands-donated-to/article_e690f2d0-65de-11e8-8a94-032c1fb48eda.html


Each year Children’s Mercy Hospital is benefited by a slew of locally-based celebrities who come back to Kansas City and create what is now called the “Big Slick Weekend.” It surrounds a Kansas City Royals home game and includes a number of celebrity events. This year the celebrities raised over $2 million for the hospital.

Source: http://bigslickkc.org/


The annual auction to have lunch with Warren Buffett was won with an anonymous bid of $3,310,000. The annual auction has raised more than $25 million for San Francisco charity Glide, a favorite charity of Warren Buffett’s first wife. The winner can invite up to seven friends for lunch with Mr. Buffett at a local steakhouse.

Source: The Wall Street Journal, June 4, 2018. Retrieved from https://www.wsj.com/articles/winning-bid-to-have-lunch-with-warren-buffett-3-3-million-1527946585

New York

The Office of the Attorney General has issued a Press Release announcing a $700,000 settlement with the operator of a clothing donation bin program. Among the assertions is that the relationship between the beneficiary charity and the for-profit company was a licensing agreement that provided a flat sum to the licensor. The settlement resolved the allegations that Thrift Land used a charitable veneer to trick and mislead the public into believing that the clothing it collected would benefit the charity whose name and logo appeared on the bins. In fact, the charities received only a small monthly fee.

Commentary: Recycling programs have become very popular. If the foundation of the program is a licensing agreement, then the fact must be disclosed much the same way as a commercial co-venturer point of sale disclosure has to be made in order to be truthful with the donating public. The better format is to have the donations go directly to the charity who then sells the goods and has the discretion of keeping any of the items donated. If you have questions about such a program, please feel free to contact either Errol Copilevitz or Karen Donnelly of the firm.

Source: https://ag.ny.gov/press-release/ag-schneiderman-announces-700k-settlement-operator-clothing-donation-bin-charity-scam


Challenging Times

According to a report recently released by the Fundraising Effectiveness Project, tax reform is having a negative effect on charitable giving. According to the report, the total number of donors to date is down 6.3% compared to last year. Likewise, year-to-date change on giving revenue is down 2.4%.

Source: http://afpfep.org/

European Union/United Kingdom

If your organization has website visitors, donors, members, or others in the EU/UK that provide the organization with personal information and data, it is not too late to attempt to come into compliance with the General Data Protection Regulation (GDPR) which went into effect on May 25, 2018. There is a plethora of resources out there which attempt to explain the regulation and provide some level of guidance on complying. Most of these resources are a bit confusing, especially for United States entities that may receive information, knowingly or unknowingly, from residents of the EU or UK. Should you have any questions about this, please do not hesitate to contact Greg Lam of the firm.

Federal Trade Commission

The Federal Trade Commission recently released educational pieces on online giving. These can be found at https://www.ftc.gov/tips-advice/business-center/guidance/online-charitable-giving-portals.

Internal Revenue Service

The Agency has released a new five-year strategic plan outlining goals to improve tax payer service and administration. Among the six goals are to protect the integrity of the tax system by encouraging compliance through administering and enforcing the tax code, and to drive increased agility, efficiency, effectiveness, and security in IRS operation.

Source: https://www.irs.gov/newsroom/irs-issues-new-strategic-plan-five-year-plans-goal-to-help-taxpayers