Orange County Register

The Watchdog faces umbrage from nonprofits who take offense when she asks questions about how they manage money.

There was grumbling when The Register published the salaries of the Sawdust Art Festival’s top-paid employees last year. The chief financial officer of the Joyful Child Foundation asks why his organization is being examined.

Here ye, hear ye: The Watchdog will be watching nonprofits. She does not mean to offend!

Here’s the deal.

For every three dollars donated to charity, the government forefits a dollar or so in tax revenue.

BIG BUSINESS, BIG MONEY

A study by the Gianneschi Center for Nonprofit Research at CSU Fullerton and the Center for Nonprofit Management found that there were 1,899 nonprofits in Orange County that filed tax returns with the IRS .

They had revenues of $4.2 billion and assets of $7.1 billion in 2000 – an increase of nearly 50 percent from just three years before. That’s about 4.1 percent of Orange County’s GDP.

Seems like something we should keep a closer eye on, no?

It’s a matter of public trust. The Internal Revenue Service gives nonprofit organizations a big break - not charging them income taxes. Why? Because nonprofits are supposedly working for the broader social good.

Are they? And are they doing it well? It may seem impolite to ask, but it’s the Watchdog’s job. Please excuse her insolence. 

Congress set it up this way, not us. Nonprofits accept donations from the public. The public has a right to know how those donations are spent.

And - as my former colleague Ricky Young famously fumed when the Irvine Ranch Water District wanted to know “who we were with” when we arrived in its lobby asking to see its budget -  ”We are with the public!”

So, for the record, anyone can walk into any nonprofit’s office and ask to see its tax returns for the past three years, and the nonprofit must oblige.

If it refuses, the penalty is $20 per day, per undisclosed tax return. Said penalty accures for as long as the nonprofit fails to produce, up to a maximum of $10,000 (per undisclosed tax return).

Brother, can you spare a dime?

Read “Charities are big business, part two”

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