Frequently Asked Questions about WILPF’s Fiscal Sponsor:

Published on August, 19 2013

                                                               

 

Q: How can I receive a tax deduction for my gift to WILPF?

 

A: As a 501(c)4 organization, WILPF is exempt from paying federal income tax. It can directly accept gifts that do not qualify for a tax exemption. If you itemize deductions on your annual tax return you may find it advantageous to make a tax deductible gift. You can give a tax deductible gift to WILPF through its fiscal sponsor, the Peace Development Fund, by check, credit  card, monthly pledge or online. The Peace Development Fund is a Silver-level GuideStar Exchange participant, demonstrating its commitment to transparency; you can view their GuideStar profile at http://www.guidestar.org/organizations/04-2738794/peace-development-fund.aspx.

 

If giving by check, please use the Peace Development Fund as the payee and write WILPF, U.S. in the memo line. Mail your check to WILPF at 11 Arlington Street, Boston, MA 02116.

 

If giving by credit card or establishing a monthly pledge, please contact Ria Kulenovic (WILPF Director of Operations) in the national office at 617-266-0999.

 

If giving online please visit the Give to WILPF page of our website at https://org2.salsalabs.com/o/5372/p/salsa/donation/common/public/?donate_page_KEY=431 or the website of our fiscal sponsor, the Peace Development Fund at http://www.peacedevelopmentfund.org/page/donations.

 

Q: But, isn’t the Jane Addams Peace Association WILPF’s fiscal sponsor?

                                        

A: The Jane Addams Peace Association (JAPA) provided fiscal sponsorship services to WILPF from 1951 to August 14, 2013. On August 14, 2013, WILPF entered into a contract with the Peace Development Fund for the provision of fiscal sponsorship services. If you have made a gift to WILPF via JAPA that has not yet been processed or acknowledged, please contact WILPF Director of Operations Ria Kulenovic at 617-266-0999 as soon as possible.

 

Q: Why did WILPF separate from JAPA?

 

A: The decision to change sponsors is an operational decision made by the finance committee and approved by the entire WILPF Board of Directors. WILPF Board of Directors has been looking at options for expanding our donor base while minimizing overhead for several years. These discussions reached a critical decision point when WILPF and JAPA were unable to agree on a written fiscal sponsorship agreement formalizing the relationship between the two organizations. 

 

In addition, WILPF needs some services which JAPA has been unable to provide including:

 

●    WILPF needs a fiscal sponsor that has sufficient internal controls in place and a staff large enough to guarantee appropriate separation of duties and checks and balances.

●    Monthly reports of activity including complete donor information for all donations received for WILPF.

●    Tax exempt notification to donors of any amount, even those below the IRS threshold of $250 or more.

●     An agreed upon and affordable schedule of administration fees.

●     Timely payment of donations made through sponsor, at least twice monthly.

●     Accurate and timely submission of information to institutional funders, including both during the application process and after the project is concluded. 

●     Copies of annual reports, audit, and IRS 990 forms from the sponsoring organization to compare with WILPF’s reports.

●     Full specific and transparent accounting of restricted funds held by sponsor organization.

●     Easily accessible online giving option available for prospective donors.

 

The mismatch between WILPF’s needs and JAPA’s capacity has resulted in frustrations on both sides and caused significant interpersonal tensions. One of WILPF’s reasons for separating from JAPA is to maintain cordial relationships between JAPA board members and WILPF members. In particular, WILPF and JAPA have overlapping missions but they both need autonomy to proceed with individual programs. The fiscal entanglement has hampered good will between the two organizations. The WILPF board feels that cooperation would be enhanced by the absence of fiscal disagreements.

 

 

Q: Are my WILPF membership dues tax deductible?

 

A: No, they are not. WILPF membership dues are on a sliding scale, from $15-$150 depending what one chooses to give. Dues are payable directly to WILPF and that income is used to fund our political advocacy around legislative issues. The tangible benefits of WILPF membership total about $20 a year, taking into account the per-member assessment charged to support WILPF’s Secretariat in Geneva and the direct benefits of membership. We value this unrestricted income, but if you need to maximize your tax deductions, you can pay the minimum amount in dues and give anything more to WILPF through the Peace Development Fund.  

 

Q: What do people planning end of life (bequest) gifts to WILPF need to know?

 

A: Bequests can be made directly to WILPF U.S. and many individuals choose to do this. Recent changes in the U.S. tax code raised the amount exempt from estate taxes; for 2013, estates with a total value of less than $5,250,000 are free from federal taxation but may be subject to state taxes. Your tax accountant or financial planner should advise you about your specific situation. Whether you decide to make a bequest to WILPF or to WILPF through a related 501(c)3, WILPF Director of Operations Ria Kulenovic (rkulenovic(at)wilpf.org) or WILPF Development Chair Robin Lloyd (robinlloyd8(at)gmail.com) can advise you on the appropriate language to use to ensure that your intentions are honored posthumously.

 

Q: Many members make their monthly pledge to WILPF through JAPA. What will happen to those pledges?

 

A: At present, pledges made to WILPF through JAPA are entered manually by WILPF Director of Operations each month, incurring excessive bank processing fees. With the permission of the pledgers, these pledges will migrate to the Peace Development Fund and their processing will become automated conserving several hours a month of WILPF Director of Operation’s time for other purposes. By automating the pledges, we will be improving the security of sensitive information and qualify for a lower processing fee. Although the pledged amount will go to WILPF, pledgers’ credit card statements will show the payee as Peace Development Fund. All pledgers receive annual acknowledgements from WILPF as well.

 

Q: How do I make a gift of stock to WILPF?

 

A: By giving stock, bonds or mutual fund shares that have increased in value since you acquired them, you may avoid paying capital gains on the appreciated value and make a larger gift to WILPF through the Peace Development Fund. If you itemize on your federal tax return, you may claim a charitable income tax deduction up to 30% of your adjusted gross income for such gifts and carry the excess forward over the ensuing five years.If you are planning to give a gift of stock to WILPF, it’s tax advantageous that you give the stock itself and not sell it yourself. Donors wishing to give stock to WILPF should contact the Peace Development Fund directly by contacting its Executive Director Ray Santiago at (415) 642-0900 or e-mail (ray(at)peacefund.org). 

 

Q: Does WILPF participate in corporate matching gift programs?

 

As a 501(c)4, WILPF is often not able to participate in corporate matching gift programs, but our fiscal sponsor--the Peace Development Fund--does. A list of companies with matching gift programs that recognize the Peace Development Fund as a partner can be found at http://www.peacedevelopmentfund.org/page/matchgifts; please consult this webpage as these programs frequently change.

 

If you work for a governmental agency that offers a matching gift program, you may be able to donate to WILPF through the Peace Development Fund. The Peace Development Fund participates or has applied to participate in the following state, city or university campaigns:  through the Human and Civil Rights Organizations of America the New York State Employees Federated Appeal (SEFA # 99900347) and the University of Massachusetts Employees Charitable Campaign; through Partners for a Better World the California State Employee Charitable Campaign (CSECC # 2682), the Commonwealth of Massachusetts Employees Charitable Campaign, the City of Boston Employee Charitable Campaign and the Washington State Combined Fund (WACFD # 1479284). 

 

Matching gifts can double, triple or even quadruple the amount of your gift to WILPF, but please email WILPF Director of Operations, Ria Kulenovic, at rkulenovic(at)wilpf.org to notify her of your intention that this gift be directed to WILPF.  

 

Q: What has been the relationship between WILPF and JAPA?

 

A: JAPA was founded by Allen Olmstead, husband of WILPF Executive Director Mildred Scott Olmstead, and Robert Rea, husband of Pennsylvania WILPF chair Helen Rea, to collect tax exempt gifts for WILPF. In the early years, the board of JAPA was a subset of the board of WILPF U.S. but this is no longer the case. At this time, there are no accountability mechanisms in place binding the two organizations. This means that JAPA is fundraising for its own purposes and WILPF is fundraising for its purposes and the two boards are independent from each other. There is no legal or contractual relationship between the two organizations except that JAPA board members are current WILPF members. WILPF board members, unlike WILPF members in general, have legal duties of loyalty care toward WILPF’s finances and organizational health. Similarly, JAPA board members have these same legal duties toward JAPA.

 

Q: When was JAPA founded?

 

A: WILPF incorporated in the United States in 1929 and was recognized as a tax-exempt 501(c)4 organization in 1931. JAPA was incorporated in 1948 and received its IRS ruling designating it as a 501(c)3 public charity in 1951. The 2-3 year lag time between incorporation and IRS recognition is typical.

 

Jane Addams died in 1935. After her death, WILPF members decided to set up a fund in her memory to be used to help carry on our work, which was financially crippled both nationally and internationally by her loss. The WILPF board also wanted to perpetuate the association of Jane Addams’ name with WILPF as well as honor her legacy. A committee known alternately as the Jane Addams Peace Fund Committee or the Jane Addams Memorial Fund Committee raised money for special projects, particularly for the international work of WILPF. Mabel Wing Castle chaired this committee from 1942-1948. Once JAPA was established, she became the first president of JAPA Board of Directors, serving until her death in 1950.  

 

Q: Why did WILPF establish JAPA as an autonomous organization?

 

A: We don’t really know the answer but we suspect it had to do with tax code at the time and the pressure from well-heeled members to provide an avenue for tax exempt giving to WILPF. A memo composed by Mildred Scott Olmstead in 1957 suggests that the WILPF board did not intend to create JAPA as an autonomous organization but rather as one under WILPF’s control, writing “It is important that the director of our [WILPF] Finance Department or the chairman of our [WILPF] Finance Committee in some way control the finances of the JAPA as well as WILPF in order to prevent duplicate appeals and insure the best possible use of donors’ names and gifts in accordance with their wishes.”

 

In 2011, WILPF engaged the pro bono services of David Adams (see timeline below), a non-profit law attorney, to report on the various possible avenues available to WILPF for handling tax exempt contributions under contemporary law. There are several ways in which WILPF could re-organize itself so as to ensure the control Mildred Scott Olmstead describes. The current fiscal sponsorship with the Peace Development Fund is intended to be temporary while the organization comes to consensus on the best long range strategy for financial sustainability.

 

Q: Why was the board’s decision to seek an alternate fiscal sponsor kept confidential?

 

A: The WILPF board has been contemplating a change in its fiscal sponsorship arrangement since the spring of 2010; the baby steps toward this decision are documented in the minutes from WILPF board meetings posted on the WILPF website at http://wilpfus.org/about/current-national-board/board-directors. Many WILPF members and donors were involved in discussions leading up to this change. While we were negotiating the actual contract with the Peace Development Fund, it seemed prudent to keep those negotiations confidential until the outcome was certain.

  

Q: Did JAPA charge WILPF for handling their tax exempt donations?

 

A: In prior years, JAPA charged a handling fee of 10-15% for processing tax deductible donations to WILPF. Since May 2008, JAPA has not charged WILPF a flat percentage for its fiscal sponsorship services. If JAPA were to charge a typical fee 7.5% based on the dollar amount of donations received, in 2011 WILPF would have paid JAPA a total of $20,180 for handling $269,063 in tax exempt donations.

 

However, if we look at the bigger picture it’s easy to recognize that JAPA’s fiscal sponsorship services are not free. JAPA’s donor pool is identical to WILPF’s and all of its assets derive from its association with WILPF. In other words JAPA receives no donations from individuals or institutional donors who are not WILPF members or affiliates. This means that JAPA is entirely supported by the generosity of WILPF members and their families. 

 

JAPA's overall projected operating expense budget for 2011 was $170,620; this does not include any monies used to support WILPF programs. Of this, 19.5% or $33,272 was anticipated to be paid to JAPA by WILPF International, for rent and accounting services. Another 13.6% or $23,271 was to be provided from donations from WILPF members’ restricted for support of the Jane Addams Children's Book Awards program. The remaining $114,077 in JAPA operating support also came from WILPF sources, through bequests, trusts, income from restricted endowments, annuity remainders, etc. The WILPF board believes that the money that WILPF’s members give to WILPF through JAPA could be used differently to more effectively realize WILPF’s mission in the world. At every level, WILPF needs to streamline its operations so that more staff time can be made available for doing our mission-based program work. For these reasons, the WILPF U.S. board believes that changing fiscal sponsors makes economic sense. 

 

Q: Who is WILPF International’s fiscal sponsor?

 

WILPF International stopped using JAPA as its fiscal sponsor and employer of record at the end of 2010, and incorporated its United Nations Office as a 501(c)3 under U.S. law. In addition to supporting the staff of Reaching Critical Will and Peacewomen, the WILPF UNO is managed by an office manager based at the Secretariat in Geneva, who supervises a part-time administrator in New York.  

 

Q: What will happen to the Children’s Book Award?

 

A. The Jane Addams Children’s Book Award program began as a WILPF initiative in 1953, and was transferred to JAPA for further development and administration in 1966. The awards are decided upon by a committee of WILPF members spread across the country, most of whom actively involve youngsters in the decision-making process. The books honored by this program are frequently purchased by WILPF branches that develop community programming around them and donate them to local schools and libraries. WILPF will remain supportive of JAPA’s Jane Addams Children’s Book Awards program, but should JAPA decide to discontinue this program at any point in the future WILPF would be eager to continue the program if funding for its administration were available to WILPF. 

 

Q: What responsibilities does JAPA have in relation to WILPF members?

 

A: Current practice is that JAPA Executive Director contacts WILPF branches to publicize the Jane Addams Children’s Book Awards as well as the various restricted funds that WILPF branches and members can apply for (Jones Fund, Joan Patchen Fund, Kay Camp Fund, etc.). WILPF members serve on the JAPA Peace Education Projects (PEP) Committee, which recruits WILPF members to serve as volunteers on the Jane Addams Children’s Book Award selection committee. It’s been agreed in the past that once a year, the JAPA Executive Director or other officer should contact the treasurer of each WILPF branch holding an account with JAPA to apprise her of that account’s balance.

 

Q: Why did the Memorandum of Understanding (MOU - sometimes also called MOA - Memorandum of Agreement) process fail? What were WILPF's preconditions? What were JAPA’s preconditions?

 

For several years, WILPF has wanted to codify the relationship between WILPF and JAPA in a written document signed by both organizations. Such a document would replace the piecemeal and unevenly recorded “collaboration agreements” from 1995-1999 currently regulating reporting, the transfer of funds, the division of assets and other operational matters. WILPF understood the proposed MOU to be prospective, governing future transactions only, and engaged an attorney to draw up a suitable document. JAPA refused to negotiate the terms of that proposed agreement which was presented to them in January 2013 until WILPF agreed to sign a release of claims for the proceeds from the sale of 1213 Race Street as a precondition to negotiating the terms of the prospective MOU. WILPF agreed to sign the release as long as WILPF could retain the right to negotiate the expending of the JAPA portion of sale proceeds.

 

Since 1983, JAPA has promoted itself as the “educational arm of WILPF” but during the intervening decades WILPF’s elected leadership and WILPF’s staff have progressively lost powers of decision making with regards to JAPA’s assets. Because JAPA’s financial holdings have come from donors whose intentions were to support WILPF, WILPF feels a responsibility to ensure that these donors’ intentions are honored but WILPF is currently unable to fulfill this responsibility. The fiscal sponsorship agreement we have signed with the Peace Development Fund requires transparent reporting by both parties and is legally binding.

 

The following is a rough timeline of WILPF’s attempts to develop a binding agreement between WILPF and JAPA that we hope will help members understand the current situation:

●    2009 Fall WILPF board meeting: questions raised about the propriety of JAPA withholding funds and donor information from WILPF.

●    2010 Spring WILPF board meeting: ad hoc committee comprised of Carol Urner, Ellen Schwartz, Nancy Munger and Laura Roskos appointed to do a cost/benefit analysis of WILPF’s converting to 501(c)3 status. Committee agrees that it needs legal advice and submits applications for pro bono counsel.

●    2010 Spring JAPA board meeting: deep discussions regarding re-focusing JAPA’s mission to provide for a “financial future for JAPA.”

●    2010 Fall JAPA board meeting: JAPA board agrees to hold collaboration meeting with WILPF in the near future.

●    2010 Fall WILPF board meeting: affirmation of JAPA board agreement to hold collaboration meeting between the two organizations in near future; WILPF Director of Operations authorized to provide logistical support in planning same. Site and dates for meeting identified; budget developed.

●    2010 Fall: WILPF United Nations Office (UNO) incorporates as a 501(c)3 public charity in the state of New York and arranges with JAPA to take over all accounting for the UNO operations.

●    April 2011: At the urging of WILPF staff, WILPF engages attorneys Bill August and Dick Allen to render an opinion on WILPF’s options regarding obtaining 501(c)3 status.

●    2011 Spring WILPF board meeting: agreement by all, including JAPA co-presidents, not to do anything that would alter existing 1999 collaboration agreements between WILPF US and JAPA, and seek a legally binding fiscal sponsorship Memorandum of Agreement with JAPA.

●    2011 Spring JAPA board retreat to determine a financial way forward for JAPA: WILPF co-presidents share August/Allen memo with JAPA board members; despite the interest of several, the memo is not discussed at the retreat.

●    2011 May 26 WILPF steering committee meeting: decision to inform incoming treasurer about MOU process underway; instructs co-presidents to negotiate a Memorandum of Agreement with WILPF International governing fundraising activities in the U.S. and ensuring transparency in reciprocal financial reporting.

●    2011 International Congress: representatives of WILPF International, JAPA and WILPF US meet to discuss initiation of preliminary work toward building comprehensive MOU. WILPF, US and WILPF International representatives come out of the meeting with impression that agreement has been reached about start of such preliminary work. This impression is not shared by JAPA representatives, including JAPA ED. Work is stalled.

●    2011 August 21 WILPF steering committee meeting: ad hoc committee comprised of Barbara Reed, Nancy Munger, Robin Lloyd and Eva Havlicsek appointed to work on MOU. Board members study documentation not available to the 2008-11 board regarding the Race Street funds. There is disagreement among board members on the intent of those WILPF members who initially “gave” the property to JAPA in order to allow a property tax exemption on the property. The WILPF board indicates no desire to re-open the 2010 allocation agreement regarding proceeds from the sale of 1213 Race Street.

●    Later Fall 2011: Committee of six, two from each concerned party (JAPA, WILPF US, WILPF International) formed to address issue of dividing unearmarked bequests from WILPF members.

●    Winter 2012: The estate of WILPF member Esther Sanjines is closed and JAPA informs WILPF of the bequest.

●    Early Spring 2012: WILPF receives anonymous donation to underwrite costs of face-to-face collaboration meetings with JAPA.

●    Spring 2012 WILPF board meeting: clarifying/resolving relationship with JAPA named as one of three top priorities for 2012 by the majority of WILPF Board members, with the exception of JAPA co-presidents serving on WILPF board.

●    June 2012: WILPF National Director resigns. As a member of the “group of six”, her resignation temporarily halts negotiations regarding the disbursement of unearmarked bequests. 

●    Early fall 2012: Ria Kulenovic, WILPF Director of Operations, is appointed to take over as one of the “group of six.”

●    Late fall 2012: JAPA board removes WILPF U.S. and WILPF International presidents from the JAPA board of directors. JAPA ceases sharing financial and investment reports with the WILPF board.

●    2012 Fall WILPF Board meeting: agreement reached to engage an attorney to create a draft Memorandum of Agreement for Prospective Interaction to send to JAPA as a catalyst for further discussion and negotiation.

●    January 2013: Draft memorandum presented to JAPA for comment. WILPF has no preconditions for engaging in negotiations with JAPA. JAPA Executive Director acknowledges receipt of draft document.

●    March 2013: WILPF board consenses to remove JAPA president from the WILPF board of directors.

●    April 2013: JAPA counters WILPF MOU proposal by demanding that WILPF sign a Release of Claims to the portion of the Race Street proceeds held by JAPA.

●    Spring 2013: WILPF treasurer requests documentation of the Sanjines bequest from JAPA and JAPA refuses this request. 

●    Spring 2013: In spite of WILPF treasurer’s belief that a prospective document should not have any pre-conditions attached to its negotiation, she sends provisional agreement about release of claims to JAPA, provided that it doesn’t relinquish WILPF’s rights to negotiate the use of the JAPA sale proceeds. Discussions on how JAPA’s sale proceeds were to be used were not recorded in the board meeting minutes from 2009 that decided proceeds allocation; however, three people present at the meeting recall a conversation in which Ann Pendell (then serving as president of JAPA) assured WILPF members that the Race Street funds held by JAPA were for the use of WILPF.

●    May 2013: amended Release of Claims sent back from JAPA to WILPF treasurer with the requested item (relinquishing all rights to negotiate the use of JAPA’s sale proceeds) moved to another paragraph. WILPF treasurer responds by pointing out that this was not a change in the original intent and refuses to sign the document.

●    May 2013: Seeing this as a clear stalemate in negotiations, WILPF finance committee, with the approval of the entire WILPF board, begins making inquiries into alternative sponsor possibilities.

●    June 2013: WILPF board decides to pursue a contract agreement with the Peace Development Fund for a period of one year.  During that year the board will investigate the possibility of changing WILPF’s own IRS designation to 501(c)3.

●    As of August 2013, WILPF treasurer has received no response from JAPA regarding the actual contents of the draft MOA.

 

Q: What were the terms of disbursal of the proceeds from the sale of 1213 Race Street?

 

A: At its Spring 2009 meeting, WILPF Board of Directors agreed to the Allocations Committee’s proposal with regards to the proceeds from the sale of 1213 Race Street.

 

There were three basic decisions made.

 

1.   The percentage split would be based on the original amounts of money invested in the building in 1972 by WILPF ($29,000) and by JAPA ($48,112). The precise ratio is then 37.6% to 62.4%; which will be rounded to make the split  40% to WILPF and 60% to JAPA.

 

2.    The way to account for recent amounts owed by WILPF or put into the building by WILPF and JAPA  is to take them "off the top" first before applying the split ratio.  That is, pay off WILPF and JAPA for what they each added to the building first, then split the remaining pot.

 

3.    This understanding would last until June 2009 and would be revisited if the building remains unsold beyond that time.

 

The building was eventually sold for $540,000 in April 2010. After the closing costs and commissions, the remaining $500,700 was divided and $193,985 transferred to WILPF with JAPA retaining $304,717 of the net proceeds.

 

Q:  What were the terms of the fiscal sponsorship agreement WILPF wanted to establish with JAPA?

 

A. WILPF is archiving the draft MOA and all communications received by the treasurer, and is happy to make available those documents to interested members. The draft is 15 pages long; the Release of Claims is one page. Please write to dialogue@wilpfus.org to request these documents.