Non Profit Investigation: 88 Impact

Staff Reports

Eastvale – In our investigative reporting series of local non-profits accountability, we have requested information and tax records for several area non-profits. Our response from 88 Impact Foundation, a local non profit who accepts donations from local residents, businesses, and government agencies, was “we are a private foundation and we do not have to disclose where our money goes out to.”

According to IRS.gov, this is incorrect. According to the IRS, you have the right to inspect and obtain a copy of a tax-exempt organization’s: Annual information returns (e.g., Form 990); Exempt status application materials; and Notice of status under Internal Revenue Code section 527(i).

“All we want to know is where the money goes. We are asking accountability,” said Michael Armijo, Editor of CityofEastvaleNews.com. “Nothing more, just where are you spending the money people and companies are donating. IF they are working with the city, and IF the city is spending money (labor, promotion, direct donations) on the foundation, then they are spending the taxpayers money. If the resident’s are donating, where is resident’s money going? That’s it.”

“As you have stated, 88 IMPACT Foundation is a 501(c)(3) private foundation, and as such is subject IRS regulations on all tax-exempt organizations and nonprofit organizations,” Anthony Chan, a freelance reporter, wrote in a letter to Hari Dihman, listed as the Principal in the 88 IMPACT Foundation.

The demand letter, which included the formality of content required under the Freedom Of Information Act, also stated; “According to the IRS, the following tax documents of all tax-exempt organizations must be available for public inspection and copying: Form 990, Form 990-EZ, Form 990-PF (Return of Private Foundation), Form 990-BL, Form 1065. 501(c)(3) Non-profit organizations must also provide Form 990-T for public inspection and copying.” The 88 IMPACT Foundation office personnel stated the opposite, that they were not required to comply and will not produce any documents regardless of IRS code.

According to their Facebook page; “The 88 iMPACT Foundation was built with the hopes of its founding family to create an impactful family legacy. As of April 22, 2014, the long talked about and anticipated 501(c)(3) Non-Profit 88 iMPACT Foundation has been filed & made active. 88 iMPACT Foundation will serve to further develop, support, educate, and create resources for all Small Business & Public Safety Agencies (i.e. Law Enforcement & Fire Fighters).” Their goal is to support the people that make our communities thrive economically & keep families, homes, and our businesses safe. “Under the California Public Records Act § 6250 et seq., I hereby request to inspect or obtain copies of public records of 88 IMPACT Foundation’s annual tax returns for 2014, 2015, and 2016 including: Form 990, Form 990-EZ, Form 990-PF, Form 990-BL, Form 1065, and Form 990-T,” the letter stated.

“The California Public Records Act requires a response within ten business days.  If access to the records I am requesting will take longer, please contact me with information about when I might expect copies or the ability to inspect the requested records,” Chan wrote. For exemption application materials, a community member is entitled to inspect or receive a copy of the organization’s exemption application (Form 1023, 1024, or other document required to be filed), any papers filed in support of the application and any determination letter issued by the IRS with respect to the application.

Nonprofits are required to file IRS Form 990 must allocate their annual expenses into three categories: 1.program expenses—expenses directly related to carrying out your nonprofit’s mission. 2. administrative expenses—expenses for your nonprofit’s overall operations and management—for example, costs of board of directors’ meetings, general legal services, accounting, insurance, office management, auditing, human resources, and other centralized services, and 3. fundraising expenses—including costs for publicizing and conducting fundraising campaigns, maintaining donor mailing lists, conducting special fundraising events, and any other activities that involve soliciting contributions. The IRS does not require that nonprofits spend any particular portion of their income on each category. It just wants nonprofits to report how they spend their money, according to nolo.com.

Failure to comply with public disclosure requirements can result in “a maximum penalty of $10,000 for each failure to provide a copy of an annual information return.”

Next month we will follow up with the information requested.