May 10, 2007 | Read Time: 2 minutes
On his blog, Trent Stamp’s Take, the president of Charity Navigator is defending his watchdog group against criticisms that it used flawed methodology to study the fund-raising value of walkathons, galas, and other special events.
Using data gleaned from the 990 informational tax returns, a Charity Navigator study found that charities spent $1.33 on average to raise each dollar they received from special events.
But in an article by The Chronicle, organizations that were included in the study say it does not count all the money generated through special events.
While the Internal Revenue Service says that money from special events should be listed under the form’s category for “direct public support,” which Mr. Stamp’s group relied on, organizations say they often use different criteria for choosing which line on the 990 form to report such income.
Mr. Stamp calls this defense bogus.
“The IRS tells them exactly how to do it. And yet some apparently don’t do it that way. And then when we report the data based on how they were supposed to do it, our methodology is ‘flawed,’“ he writes. “In the for-profit sector, the charities here would be guilty of tax fraud. Here, they have the audacity to accuse us of not interpreting their data correctly.”
Mr. Stamp goes on to say that he stands by the study’s findings that “special events are a lousy way for a lot of charities to raise money.” And based on the Chronicle article, “you must further draw the conclusion that some charities don’t care about filing correct tax forms.”
What do you think of this debate? Is special-event fund raising inefficient? Should Charity Navigator stand by its findings? Are these charities guilty of filing incorrect tax forms? Click on the comments link just below this posting to share your thoughts.
