Before I begin, let me explain that the admirable efforts by this ‘social group’ should be commended and the actual act of giving is something that they can be proud of. However, many aspects of how these unselfish acts came to fruition, simply put, is illegal. This blog is not intended to thwart these efforts in the future, but it is intended to expose issues and even possible legal problems to the people connected behind it (and yes, that includes the SFC)
To start, one must look at just what the ‘Plaid19’ is and how they, in their own words define themselves. The ‘Plaid19’ originated as a ‘joke’ referring to what seemingly was the “Southern Gentleman’s” choice of casual fashion. Simply put, it was noticed by a group of his fans that he often showed up at appearances and such wearing plaid and mismatched clothes. What started as a My-Space group, morphed to the creation of a message board (reason to be seen below) and lastly even a domain name and web site was established.
The ‘leader’ (or ‘driver’ as she calls herself) of the group defined ‘Plaid19’ when questioned ‘just what is Plaid19?’ on the group’s message board as follows:
“It is the name that we do our charity work under”
Then this quote from the SFC Website and article
“We have supported children and others who have had needs throughout the year. The funds, the time, and all the travels does not even come into the minds of the Plaid group.”
It is very clear that this group makes the claim of being a ‘charitable and fundraising organization’. Once again, the efforts are not being questioned here, as the original intent is admirable. However here lies a few problems.
Since the ‘Plaid19’s domain name and website is registered under a Virginia address and publicly solicited funds were directed to a Virginia address, Virginia State Statues and Codes would obviously apply to this organization and their claims.
"Charitable organization" means any person which is or holds itself out to be organized or operated for any charitable purpose, or any person which solicits or obtains contributions solicited from the public.”
"Charitable purpose" means any charitable, benevolent, humane, philanthropic, patriotic, or eleemosynary purpose”
"Contribution" means any gift, bequest, devise or other grant of any money, credit, financial assistance or property of any kind or value, including the promise to contribute, except payments by the membership of an organization for membership fees, dues, fines, or assessments, or for services rendered to individual members, and except money, credit, financial assistance or property received from any governmental authority.
"Solicit" and "solicitation" mean the request or appeal, directly or indirectly, for any contribution on the plea or representation that such contribution will be used for a charitable purpose, including, without limitation, the following methods of requesting such contribution:
1. Any oral or written request;
2. Any announcement to the press, over the radio or television, or by telephone or telegraph concerning an appeal or campaign to which the public is requested to make a contribution for any charitable purpose connected therewith;
3. The distribution, circulation, posting or publishing of any handbill, written advertisement or other publication which directly or by implication seeks to obtain public support; or
4. The sale of, offer or attempt to sell, any advertisement, advertising space, subscription, ticket, or any service or tangible item in connection with which any appeal is made for any charitable purpose or where the name of any charitable or civic organization is used or referred to in any such appeal as an inducement or reason for making any such sale, or when or where in connection with any such sale, any statement is made that the whole or any part of the proceeds from any such sale will be donated to any charitable purpose.
"Solicitation" as defined herein, shall be deemed to occur when the request is made, at the place the request is received, whether or not the person making the same actually receives any contribution.
Now I understand that is a lot to take in, but it is also very important to understand when taking up ventures such as what the ‘Plaid19’ is currently participating in and the legal responsibilities that go with that. Of all those Code of Virginia definitions sited above, the Plaid19 has self-admitted to falling under every definition, as well can be seen by their actions. But it is becoming more and more clear that this group didn’t understand (or didn't care about) the legal implications and even the possible criticism of their noble deed(s), as seen by their lack of preparation and attention to detail.
Registration of charitable organizations: (only listing applicable code)
Every charitable organization, except as otherwise provided in this chapter, which intends to solicit contributions within the Commonwealth, or have funds solicited on its behalf, shall, prior to any solicitation, file an initial registration statement with the Commissioner upon forms acceptable to him. Each registration statement shall thereafter be refiled on or before the fifteenth day of the fifth calendar month of the next and each following fiscal year in which such charitable organization is engaged in solicitation activities within the Commonwealth. It shall be the duty of the president, chairman or principal officer of such charitable organization to file the statements required under this chapter. A charitable organization's registration statement may alternatively be filed online on a website approved by the Commissioner. Such statement shall contain the following information: 1. The name of the organization and the purpose for which it was organized.
2. The principal address of the organization, the address of any offices in the Commonwealth and its designated agent for process within the Commonwealth. If no such agent is designated, the organization shall be deemed to have designated the Secretary of the Commonwealth. If the organization does not maintain an office, the name and address of the person having custody of its financial records.
4. The place where and the date when the organization was legally established, the form of its organization, and a reference to any determination of its tax-exempt status under the Internal Revenue Code.
5. The names and addresses of the officers, directors, trustees and the principal salaried executive staff officer.
6. A copy of a balance sheet and income and expense statement, with the opinion of any independent public accountant, for the organization's immediately preceding fiscal year; a copy of a financial statement certified by an independent public accountant covering, in a consolidated report, complete information as to all the preceding year's fund-raising activities of the charitable organization, showing kind and amount of funds raised, fund-raising expenses and allocation of disbursement of funds raised; or a copy of Internal Revenue Service Form 990.
8. A statement indicating whether the organization intends to solicit contributions from the public directly or have such done on its behalf by others.
10. The general purpose or purposes for which the contributions to be solicited shall be used.
11. The name or names under which it intends to solicit contributions.
12. The names of the individuals or officers of the organization who will have final responsibility for the custody of the contributions.
13. The names of the individuals or officers of the organization responsible for the final distribution of the contributions.
14. A statement indicating whether the organization, or any officer, professional fund-raiser or professional solicitor thereof, has ever been convicted of a felony and, if so, a description of the pertinent facts.
Now that is a lot to glean, but very important especially if one questions the organization, its purpose, solicitation for funds, and finally how those funds are dispersed. Lastly, the Code of Virginia also identifies ‘non-resident registration’ just in case the group chooses to use the excuse that the organization’s hierarchy not residing in the Commonwealth of Virginia.
(b) Any charitable organization, having no office or place of business within this Commonwealth and soliciting in this Commonwealth from without the Commonwealth solely by telephone or telegraph, direct mail or advertising in national media, and any professional fund-raising counsel or professional solicitor engaged by such an organization, shall file with the Commissioner any report which would otherwise be required of it or request the Commissioner to determine that such organization is exempt under § 57-50 or § 57-60.
Anatomy and chronology of the events and the potential issues and concern:
11/12/06 – This initial solicitation comes directly from the group’s ‘leader’, via their message board (falling under the definitions sited above, ‘Charitable Organization’, ‘Charitable Purpose’, ‘Contribution’, and ‘Solicitation’. Also, this is not the first solicitation by this organization)
“The plaid #19 will donate $50.00 in Bell's name and $50.00 in Elliott's name (These amounts can grow, but we will make sure they are no less.)
To The Commonwealth Autism Society of Virginia (this is the society they donated to a few weeks ago)
The Admin and mods of this board will furnish engraved ornaments to tell Elliott and Bell about the donation. Kim has volunteered to make the plaid christmas cards with all of the team names listed to go with the ornaments.
Donations: Board members may donate whatever they wish. Donations will be turned over to ******. [name omited] Please contact her for details. She will be handling getting the donation secured.”
Once again, I should mention that this is an admirable venture to say the least, but with a blink of an eye, this venture takes a turn, and that turn is one that could cause scrutiny if others lacked trust in the organization and their intentions.
12/10/06 – Now a month after the original solicitation, there is an indication that some contributions could be diverted elsewhere with this announcement.
“The deadline is quickly approaching. If you still want to contribute, I need your money by Thursday December 14th. That way I can get the money to the bank and mail the check off to the society on Friday………… There may be another twist to our giving as soon as I get some details……… What we would like to do, is give any funds that we collect over $300.00 to her fund at the truck stop. Since right now I am at $285.00 and money is still coming in, I think we should be able to give something………. Let me know what you think or if you have any objections.”
Again, this ‘new twist’ is another example of the admirable deeds this group is attempting to wrap it’s arms around, however there are reasons for the lengthy State Codes listed above and this is a prime example. ‘Switching gears’ in the middle of a fund raising drive to divert funds to another event is simply neither ethical nor prudent. As one who donates funds under a specific premise, however said funds are contributed elsewhere at the very basic level could be considered fraudulent by others. Lastly, what is the number of ‘objections’ needed to stop this ‘new twist’, or needed to allow it to continue?
Now we see an example of the need for prudent pre-solicitation steps and the reason for getting one’s ‘ducks in a row’ before embarking on such endeavors. Why do I find myself ‘re-living’ the now infamous ‘fire shirt Ebay auction’? This is how something good can go sour very fast. It only takes a couple of accusations of misappropriations of funds and the whole credibility of an organization can crumble. If that was to happen in this instance, in my humble opinion, that would be a terrible thing, as this group’s intentions are good.
This group has claimed to have raised nearly $2000 in less than a few short weeks of time in late 2006, and their efforts have not gone unnoticed. Recently SFC posted a feature article concerning this group including pictures and background stories, complete with the Sadler Foundation Treasurer present. I would have thought that a person in such a position would have ‘done their homework’ and made sure that said organization was actually following State Law and had a valid and legal status from within the state, instead of being overcome with the emotion and potential notoriety of the event.
One proud member of ‘Plaid19’ can even be quoted in saying such incorrigible words as:
“Tax records, I dont care about anyones tax records but my own.”
Now this brings up an interesting dilemma, for not only the people who donated, but also the organization itself. Since the proper paperwork was not filed with the Commonwealth of Virginia by the organization in the first place, what are the ramifications when and if, one of the contributors attempts to claim their donation on their annual taxes? Any reasonable and rational person should think that the ‘Plaid19’ is truly a bona fide charitable organization, which is soliciting contributions from the public via the Internet. They have a website, a forum, a my-space page, a plug on the SFC website and even the Sadler Foundation Treasurer's endorsement.
Since the ‘Plaid19’ already has future fund raisers in the works, I hope this blog makes one point very clear and gives a 'wake-up call' to the powers that be from within this 'social group' before some sort of ‘disaster’ strikes. I would hope that before any other funds are collected or disbursed the proper filing with the Commonwealth of Virginia is completed, along with a basic knowledge of what legally is expected of such a charitable organization including record keeping, disclosure and an organization structure. But then again, its ‘parent organization’ that raises far more funds than that to date has failed to do when requested.
I would hate to see any of these good deeds turn sour.