7.3 Earthquake hits Haiti; Tsunami feared

[Psi U MC Vito]

Originally Posted by DrPhil

Is it or is it not true that charities have to put 100% of the donations into the charity? Does it matter whether it's "non-profit" or are they all non-profit?

Someone please answer this and stop caring about bignasty. LOL.

Wyclef said he has never paid his employees or himself with the charitable donations from Yele. So...question...since he supposedly gave 1million of his own money and it is a non-profit...really dumb questions ahead: those who work for Yele would get paid...how? Expenditures would come from...where?

Charity is a special kind of non profit. Also I know they don't need to put it all into charitable works, but they are allowed to use some of the money for administrative cost. I don't know anything besides that though.

[Senusret I]

Originally Posted by DrPhil

Is it or is it not true that charities have to put 100% of the donations into the charity? Does it matter whether it's "non-profit" or are they all non-profit?

Someone please answer this and stop caring about bignasty. LOL.

Wyclef said he has never paid his employees or himself with the charitable donations from Yele. So...question...since he supposedly gave 1million of his own money and it is a non-profit...really dumb questions ahead: those who work for Yele would get paid...how? Expenditures would come from...where?

1. Unless a donation is specifically directed to a certain fund or program, then any or part of your un-designated donation may go to administrative or operating costs. The charity may NOT just give your money away to a project or program which is unrelated to the work of the charity. The charity MAY use your donation for salaries of employees, unless you designate it otherwise.

2. You should be donating to a charity which has a 501(c)3 designation so that your donation can be tax-deductible. I also would sleep better at night knowing I could review that organization's tax forms. I won't say "all charities are nonprofits" because some charities are scams, but I can say that all 501(c)3s are nonprofits.

3. I think Wyclef misspoke and doesn't really know what he's talking about. Unless his entire staff is volunteer, their salaries are being paid from either his donations, government grants, private foundation grants, or direct public support.

I hope I answered your questions.

[DrPhil]

Originally Posted by Senusret I

1. Unless a donation is specifically directed to a certain fund or program, then any or part of your un-designated donation may go to administrative or operating costs. The charity may NOT just give your money away to a project or program which is unrelated to the work of the charity. The charity MAY use your donation for salaries of employees, unless you designate it otherwise.

2. You should be donating to a charity which has a 501(c)3 designation so that your donation can be tax-deductible. I also would sleep better at night knowing I could review that organization's tax forms. I won't say "all charities are nonprofits" because some charities are scams, but I can say that all 501(c)3s are nonprofits.

3. I think Wyclef misspoke and doesn't really know what he's talking about. Unless his entire staff is volunteer, their salaries are being paid from either his donations, government grants, private foundation grants, or direct public support.

I hope I answered your questions.

Thanks.

I misrepresented what Wyclef said. I heard it on Michael Baisden's show and didn't commit it to memory. It was more along the lines of his saying he has never profited from Yele.

His site with his blog and so forth where he reiterates this defense:
http://wyclefjean.wordpress.com/

[MysticCat]

Originally Posted by bignasty

I don't have the exact law. I have the exact stat from that law.

Do you cite sources with all your posts?

If asked for the cite, yes.

But if that's how we're playing this game . . .

Originally Posted by bignasty

Under the law charities only have to spend 10% of the donations they receive on the vitims.

You're wrong.

[Psi U MC Vito]

Originally Posted by MysticCat

If asked for the cite, yes.

But if that's how we're playing this game . . .

You're wrong.

I there any legal limit to the amount of money that can go for administration costs?

[Senusret I]

Originally Posted by Psi U MC Vito

I there any legal limit to the amount of money that can go for administration costs?

You know Vito, I really personally can't remember this. I work for a nonprofit, and I know we do a good job at keeping administrative costs down, but I don't know if that's because of tax law or because of the rules of our grants. (Many of our grants have that rule, but the number varies from grant to grant)

(Both federal grants and some private grants)

[preciousjeni]

Originally Posted by lovespink88

It's MM, so yes to both

Ahhh I see.

Originally Posted by Senusret I

You know Vito, I really personally can't remember this. I work for a nonprofit, and I know we do a good job at keeping administrative costs down, but I don't know if that's because of tax law or because of the rules of our grants. (Many of our grants have that rule, but the number varies from grant to grant)

(Both federal grants and some private grants)

I'm not aware of any federal tax law that limits the amount of money you put toward administrative costs as long as private inurement has not occurred. As Senusret I said, certain grants do have overhead limitations that you account for when submitting the grant budget.

I'm still very curious about bignasty's 10% stat. The only specific number that even comes close is the 5% rule for private foundations. They're required to spend a minimum amount equal to 5% of their assets each year.

Back to laws regarding restricted (earmarked) funds. Federal laws regarding public charities are surprisingly vague. State laws, however, do vary. Most charities have a policy regarding restricted funds, including how to deal with those funds if they are no longer needed.

However, I'm not aware of any federal or state laws regulating what percentage of restricted or unrestricted funds have to go toward program expenses vs. administrative expenses. That's pretty much left up to the charity.

[MysticCat]

^^^ And to add to what Sen and jeni said, there are Better-Business-Bureau-type organizations and certifications for non-profits that require a cap on administrative costs.

[preciousjeni]

Originally Posted by bignasty

John Stossel did a story for 20/20 a few years ago on the Red Cross and non profits. Some of the execs in the story were making 6 or 7 figures. According to Stossel only 10% of the donations had to go to the victims and as much as 90% could be spent on expenses.

Are you serious?!?!?!?!?! LOL!

[Psi U MC Vito]

Originally Posted by bignasty

The administratives costs can not be more than 90%. Like I told you the first two times the minimum that has to go to the victims is only 10%.

Dude like people have been telling you, you need to cite this shit. The lawyers, as well as an employee of a non profit are saying that they have no idea where this stat is coming from.

[MysticCat]

Originally Posted by bignasty

Like I told you the first two times the minimum that has to go to the victims is only 10%.

Like I told you, you're wrong.

Originally Posted by bignasty

John Stossel did a story for 20/20 a few years ago on the Red Cross and non profits. Some of the execs in the story were making 6 or 7 figures. According to Stossel only 10% of the donations had to go to the victims and as much as 90% could be spent on expenses.

[preciousjeni]

Originally Posted by bignasty

I am right. Cite a source proving me wrong.

No problem.

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.

Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct.

Source: http://www.irs.gov/charities/charita...=96099,00.html

To recap:

1) The expenses of a non-profit (administrative, fundraising, programming) must be tied directly to its exempt purposes.

2) Expenses may not inure to any private shareholder or individual, meaning that no single person can benefit unreasonably from a non-profit's activities.

3) Expenses cannot go toward attempting to influence legislation as a substantial part of the non-profit's activities.

These are the rules.

In reality, a non-profit can spend 100% of its revenue on salaries if it wanted to, as long as no private inurement took place.

There is no such thing as a 10%/90% rule as you're suggesting. Either you heard wrong or the "reporter" was blowing smoke.

[Senusret I]

Originally Posted by shimano

The legal minimum is 10% and the maximum is obviously 100%. The 90% that I mentioned was the max that a charity can spend on administrative costs, ads, fundraising, overhead, junkets to Hawaii, ect.

Which is not true.

[AGDee]

Originally Posted by shimano

Are you an idiot? Your post does not dispute anything. I said the legal MINIMUM a charity has to spend on the victims is 10%. You reply with a charity can spend 100%. No Shirlock.

The legal minimum is 10% and the maximum is obviously 100%. The 90% that I mentioned was the max that a charity can spend on administrative costs, ads, fundraising, overhead, junkets to Hawaii, ect.

She said "In reality, a non-profit can spend 100% of its revenue on salaries if it wanted to, as long as no private inurement took place." She did not say that a charity can spend on victims. She said they can spend 100% on SALARIES.

[MysticCat]

Originally Posted by bignasty

I am right. Cite a source proving me wrong.

LOL. You really are too funny. To quote an "authority:"

Originally Posted by bignasty

Look it up yourself.

Originally Posted by bignasty

I don't need help making the point. I already made it.

Hey, you're the one who set the rule that we can claim whatever we want without backing it up. (And sorry, Stossel as an authority is just plain laughable.)

Whatever. At the end of the day, you're still wrong. And sad.