I read the RFM fundraiser thread and have a few questions and comments that might be of value to RFM. Rather than distract from that thread, I thought I would start this new thread. Hopefully this information can be helpful to RFM and it may be of interest to others here as well.

Is RFM a 501c3 tax exempt organization? About four years ago, some of the tax laws changed when it comes to donations made to tax-exempt organizations. The burden of verifying tax exempt status has moved from the charitable organization, to those who make the donations. This is actually a good thing for those charities that understand how the donation game is played, but could put other organizations who don't understand how that system works, at a disadvantage when it comes to raising funds. I am on the Board of a 501c3 organization and was taught by a few other of the board members how this works.

It used to be that all a charity had to do was to advertise their tax exempt status. If someone made a donation to the charity and wrote it off on their taxes and the charity wasn't really tax exempt, the IRS held the charity responsible and not the person who made the donation and wrote it off on their taxes illegitimately, but typically in an honest error.

A few years ago that changed. Now the IRS holds the donors responsible for that kind of mistake. As a result, organizations like Charity Navigator and Guidestar became vetting organizations for big donors. Legitimate charities with annual revenues of less than a million dollars per year typically register with Charity Navigator. Charities with annual revenues in excess of a million dollars per year typically register with Guidestar also. These vetting organizations have guidelines that charities strive to meet. By registering and reporting information to these organizations, your charity can start at a bronze rating, move up to silver or gold, and eventually move to a platinum rating. The vetting organization uses the 990 tax returns and other verification methods to verify the information that you report to them about your charity.

When larger donors decide to donate a certain amount of money to charity now, they go to Charity Navigator or Guidestar and shop for a charity there. There, they read about what the charity does, what the charity says about itself, along with all relevant financial information. All of the verified information is there in one place. There is no risk of violating IRS rules by accidentally donating to a non-tax-exempt charity because all information there is verified for that very purpose of avoiding that situation. Some donors may set their required criteria to (for example) say that the charity must have a gold or platinum rating, or to require that the paid staff can not receive more than a given percentage of total revenues. Often, charities who are not registered aren't even considered by people and companies who might otherwise donate to them because but who do not donate because the charity isn't even registered there. If your charity is unaware of this eco-system, you may not even know why donors exclude your agency from consideration. The bigger the donation amounts, the more this holds true.

The agency that I am on the board of has no paid staff and no paid officers. Everyone on all levels is a volunteer. There are also no advantageous reimbursement of expenses that could allow anyone involved with the charity to receive any personal benefits in hidden ways (like paying anyone's phone or other bills). It's a very interesting environment to be a part of. Several checks ranging from $50 to $5000 come in every month. December is a big month as some wealthy people and businesses need to dispose of certain amounts of money to charity before the end of the year to hit their lower tax bracket targets for the year. The money comes and goes. Easy come easy go is what it looks like because it is not directly earned. It just shows up in the mail. But none of it is ours personally. Every expense is accounted for. The agency always seems to have enough money to meet its mission and in amazing ways at times. I am even wearing my truck out hauling supplies for the agency every month without any return compensation for doing it. Everyone else who volunteers does the same. That's one reason why we get those donations. Most agencies have paid staff or at least paid officers. Donors don't like to see that. They can see those details on Charity Navigator.

If RFM isn't using some of these methods, perhaps they should. The agency I volunteer for gets big checks and most of the time, we never find out where the given donor found out about us. Sometimes they see us at work in the community. But those are just anonymous people who we usually don't know who they are. Who would know that that guy who asked for a flyer at a public event is actually a millionaire who likes to donate to charities and likes what he sees in-action? I think it would be relatively easy for RFM to position themselves well in to a system like this, even being only online. One of the most difficult parts of running a charity is for a new charity with a short history of being in business, to get the bigger donations. After ten years, it starts getting easier. And RFM has already paid their dues credibility wise with a long history. Simply by jumping through some of these hoops, you might be surprised when unexpected checks just show up in the mail because people like what you're doing. Maybe their only exposure to RFM might come from their Charity Navigator profile. If they like what they see there, that might be enough.

Hi azsteve,

Thank you for your thoughtful post. It sounds like you have a lot of experience in this area.

Fundraising at RfM has mostly been an informal affair, partly by momentum and partly by design. We don't need large amounts of money to keep the site running, though the design is getting a little old and it would be great to be able to get some professional work done on it.

We have talked for years about having a more formal organizational structure for the site, including getting 501(c)(3) status. That would require some money to set up the legal aspects as well as putting together a board of directors, writing bylaws, etc. I know that the Exmormon Foundation did this about 15 years ago and, IIRC, it wasn't too burdensome back then. We should probably look at it again.

I would love to have a conversation about these topics. If anyone has ideas, feel free to chime in below.

Thanks!

CZ (admin)

It was I who set up the Exmormon Foundation as a charitable organization, and it was fairly simple (at that time). I have not kept up with the regulations in that area, so I couldn't advise. As I recall, it did not require a lot of expense (if any), just filling out a long application. I would guess that the application is online at the IRS website.

IIRC, however, charitable contributions are no longer deductible? (as I said, I have not kept up, and the wife does all our taxes)

Good idea, AZsteve.

It's actually easier to write of charitable donations in the US.

IF you itemize nothing really changed. The thing is fewer people itemize so fewer people take the deduction.

For those that don't itemize there was a provision to write off up to $300.00 in monetary donations. Not sure if congress will press that option forward for 2021.

From what I've heard recently, the application process for a 501c3 is still relatively simple. But the wait for the IRS to approve the application has grown substantially. Before the start of the pandemic, it was taking nine months or more. I don't know how long it's taking now.

The IRS form 990 EZ is very simple and easy to fill out by anyone who is good with handling details. The 990 long form seems to frieghten most ordinary tax preparers, mostly because they don't have experience with it. It can be difficult to find a person to do your 990 long form unless you know someone who does them for themselves or for another charity. It's just not as common and most experts never learn to do it. For a reletively small agency without a lot of revenues, the short form should work.

Other than tax returns (which are publicly available), the only other thing that legally needs to be done in the way of reporting for a 501c3 is to file an annual report to the Secretary of State's office each year. I did that myself for several years and it's not very difficult if your officers don't have conflicts of interest or convictions. You just list your officers and state for the record (by answering questions), several things that would expose certain conflicts of interest if you answer certain ways (no bank fraud convictions, no controlling interests in certain foreign corporations, etc...).

Set up dunk tanks in the neighborhood bar parking lots. Have people dressed as missionaries holding the BoM sitting on the dunk platform. $10.00 for 3 balls. Cha Ching!

How much for two?

Dunk dorky, devilish, deminted Mormon misfits, missionaries, misleaders and misogynists.

Sell books of nomrom - Mormon, backwards - to nomroms: they'd love it;

How about a dance?

Build a temple!!

but reduce the dues to 5%