One Utah Lawyer Helped Create 8 Groups That Lent Money to Donors or Officers

As The Chronicle analyzed the records of supporting organizations that lent substantial sums of money to their officers or directors, one name appeared repeatedly: Richard H. Bradley, a Salt Lake City lawyer.

Supporting organizations are nonprofit groups set up to support specified charities. In many cases, wealthy individuals establish supporting organizations as a way to create their own philanthropy. Sometimes those individuals, who are usually directors or officers of their organizations, also take large loans from them, to be repaid with interest. The organizations then use those repayments to make grants to charity.

From 1998 through 2001, The Chronicle found that 10 supporting organizations made loans to directors of $100,000 or more that accounted for half or more of each of the groups’ assets. Mr. Bradley helped set up eight of those organizations.

“The first one I set up for a client because another attorney suggested it to me,” he said. Other wealthy people interested in donating to charity were referred to him, he said, and he helped them set up supporting organizations. “I don’t promote them. I don’t have a Web site or anything like that.”

“Most of my clients are members of the Mormon Church, where people give 10 to 15 percent of their money to charity,” he added. “They’re not doing it to get a tax break. They’re doing it because they want to create an orchard so they can give away the fruit every year. They’re also teaching their children about philanthropy.”

Mr. Bradley is also a director of seven of the supporting organizations he has helped to establish, and previously served as a director of the other one. Of the $3.1-million the founders of those eight groups donated to the supporting organizations from 1998 through 2001, the contributors borrowed back nearly $2.5-million.

Five of the organizations Mr. Bradley has helped establish make the bulk of their grants to another group he runs with his family, called the Wishes Are Forever Foundation. The groups donated at least $209,000 to Wishes Are Forever from 1999 through 2001.

Tracking the Returns

While Wishes Are Forever’s stated purpose is to make grants to charities that help children, what it spent its money on is unclear.

The Form 990 informational tax returns nonprofit groups like Wishes Are Forever file with the Internal Revenue Service are public documents, but the IRS responded to a Chronicle request for the organization’s forms by saying that its two most recent returns are not “available.” That means, according to the IRS, that either the returns “have been checked out by another department” or they were never filed.

Marc Owens, a Washington lawyer who formerly headed the IRS division that oversees nonprofit groups, said that if the returns were checked out by another department, that would probably mean they were being examined by agents whose job is to decide which groups to audit.

Federal law requires charities to make copies of their tax returns available upon request. Mr. Bradley responded to a Chronicle request for his charity’s returns by sending a complete version of its return for 1999, the year the group was set up and before it had received any funds to distribute, and incomplete copies of those for 2000 and 2001.

The latter two returns said the group made $2-million worth of charitable grants, but omitted required sections showing what organizations received the money. When The Chronicle contacted Mr. Bradley’s office to ask for the missing parts of the returns, a woman who identified herself as his secretary said he was “too busy to search for more documents,” despite the federal requirement that the full returns be made public. He has not returned at least a half-dozen phone calls, nor has he responded to written requests for further information.

GuideStar, a nonprofit organization in Williamsburg, Va., that has a contract with the IRS to receive copies of all nonprofit tax returns for posting on the Internet, said it has no record of ever having received any of Wishes Are Forever’s tax forms. Mr. Owens said the fact that GuideStar never received the returns could mean they may never have been filed with the IRS.

In a telephone interview with The Chronicle before he sent any information about his organization, Mr. Bradley said Wishes Are Forever has donated money to a wide range of nonprofit groups, including “the Church of Latter-day Saints, universities, and humanitarian causes like the United Way, the March of Dimes, and the Make-a-Wish Foundation.”

A spokesman for the Church of Jesus Christ of Latter-day Saints said that as a matter of policy it never comments on who makes donations. After searching their records, officials of the United Way of Salt Lake and the Utah March of Dimes said they have never received donations from Wishes Are Forever. According to the Utah chapter of the Make-a-Wish Foundation, Mr. Bradley’s group donated about $40,000 from 1999 through April of last year.

The Chronicle could find no other public records to show what Wishes Are Forever did with the remainder of the $2-million Mr. Bradley said it had donated to charity.