Investigating Charities: Key Actions By Senate Finance Committee
June 9, 2005 | Read Time: 3 minutes
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Topic of investigation
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When committee started investigation
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What it examined
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Status
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American Red Cross
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June 2002
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American Red Cross’s fund-raising tactics following the 2001 terrorist attacks, as well as its financial reporting practices and disaster-relief policies.
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Inquiry has ended. Red Cross revamped its disaster fund-raising practices, including changing solicitations to be more candid about what activities donations would support.
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Capital Athletic Foundation
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March 2005
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Information about salaries, expenses, business transactions, investment policies, and lobbying practices at the charity in Washington, D.C., which which was set up by the Republican lobbyist Jack Abramoff to offer sports programs for children.
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Continuing.
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Car donations and other noncash gifts
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March 2004
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Asked the Internal Revenue Service for information and documents related to the oversight of deductions taken by donors for noncash gifts, with special emphasis on donations of cars and other vehicles. The inquiry was later expanded to cover all types of noncash charitable contributions.
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IRS responded to committee’s request for information. New federal laws tightening rules for donations of vehicles and gifts of intellectual property were passed by Congress last year. Committee’s broad inquiry into noncash gifts continues.
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Charity tax shelters and possible scams
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April 2004
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Asked the Internal Revenue Service and the Department of Treasury for lists of charities that might be offering donors and others an opportunity to get involved in illegal tax shelters.
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Continuing. Introduced legislation in May 2005 to crack down on companies that improperly benefit from charity-owned life- insurance policies. Additional legislative proposals expected later this year.
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Hospitals
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May 2005
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Asked 10 of the nation’s largest tax-exempt hospitals for informationabout how much free care they provide to the poor, patient billing, and ventures with for-profit companies and hospitals.
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Continuing.
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Nature Conservancy
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July 2003
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The Nature Conservancy’s governance, land transactions, and management practices.
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Continuing. Final report expected to be released at a Senate hearing in June. Since inquiry started, organization has halved the size of its governing board and made other structural changes to improve oversight of the group’s programs.
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Smithsonian Institution
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May 2004
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A 1998 donation to the Smithsonian Institution of four musical instruments, following concerns that the organization may have allowed the donor to inflate the instruments’ value to claim an excessive tax deduction.
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Continuing. Committee is considering proposing additional rules to toughen the standards of writing off noncash gifts.
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Solicitation fraud
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April 2002
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Steps that government agencies take to protect people from makinggifts to organizations that provide misleading information to potential donors, especially organizations that promise to grant the wishes of sick children.
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Inquiry has ended. Committee worked with Pennsylvania Attorney General’s Office to reduce fraudulent solicitations.
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Statue of Liberty
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April 2003
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The Statue of Liberty-Ellis Island Foundation, seeking information about the organization’s salaries, grants, and contracts.
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Continuing.
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Supporting organizations
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February 2005
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Asked the Internal Revenue Service for a report on its audits of a sampling of supporting organizations. Urged the Treasury Department to review the regulations that created such organizations, which are supposed to channel money to a single charity.
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Continuing. Committee is considering proposals to tighten regulation of such organizations to ensure that money that is supposed to go to charity gets there.
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Terrorism
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January 2004
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Role of tax-exempt organizations in financing of terrorist groups. Asked the IRS for information on 24 charities suspected of having connections to terrorists and about the agency’s oversight of nonprofit organizations that may finance or perpetuate violence.
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Continuing.
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United Ways
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August 2002
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United Way of the National Capital Area’s management of donations and how the United Way’s national umbrella organization ensures the integrity of its local groups.
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Inquiry has ended. The United Way of the National Capital Area agreed to make changes, such as promising to give at least 90 percent of the money pledged during on-the-job campaigns to charity. The United Way of America adopted new rules for local groups to encourage them to disclose more information to the public and meet new financial standards.
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