Experiences with IRS re 501(c)3 applications for American Indian programs

I had several IRS experiences involving our getting 501(c)3 tax exempt/charitable status for three all-Indian Native programs -- two in the Nixon era and one when Gerry Ford was president.  Despite dire predictions about hassles and delays, we didn't have any heavy problems. Part of the current IRS situation involves 501(c)4 applications as well.  I know little about those.

The first was our Chicago-based Native American Community Organizational Training Center with a regional focus.  We developed that over the first several months of 1973 -- and I, who became its chair and Bill Redcloud who emerged as its director, were able to get "political" backing from almost all of the Native organizations in the faction-ridden Chicago Indian community. (That took some diplomatic doing.)  Three mainline religious denominations -- Lutheran, Methodist, and Presbyterian -- were ready to provide significant funding (and subsequently did).  Church monies are automatically tax exempt -- but the denominations are always reassured if a group does have 501(c)3.  We were also seeking foundation funds -- ultimately fairly successful in that -- and there the IRS tag was a must.

The application form for 501(c)3 made a conventional income tax pak look like a Sunday school brochure.  It's probably much larger now. Fortunately, we had a very good lawyer friend, Tom Hanson of Chicago's Orlikoff firm, a genuinely liberal group.  Tom was from western Iowa and his father, Bill Hanson, was a Federal District judge known for his pro-Indian decisions.  Tom, himself, helped us much in our Southside Chicago organizing and also in my volunteer work on the Northside in Native endeavors.  By the time we reached the point of seeking 501(c)3, I had just accepted a position in the Graduate Program in Urban and Regional Planning at University of Iowa.  I remained chair of the Training Center and commuted the 225 miles to Chicago.

Tom had a friend in the UI's Law School, a tax professor.  The prof agreed to help us with our application to IRS, and third year law students worked on our application as a kind of  practicum.  When we sent it off, we weren't sure what to expect since the Training Center had obvious activist implications.  It came back to us, not approved, but the reason was purely technical.  We had overlooked a relatively new provision that required our formal agreement that, if the Center should ever disband, its remaining funds would be disbursed to organizations that themselves had 501(c)3 status.  A conference call of our board was not sufficient and a formal board meeting was required. So we all gathered at St. Augustine's Indian Center (Episcopal), held a formal board meeting in its upstairs room, passed the required addition to our application and amended our by laws, and filled out and signed the necessary papers.  Resubmitted, our application was quickly approved.  The Training Center was a success.  I remained its chair until, a few years later, we moved to Rochester, New York.

Bill, a very good man indeed, suffered from Rheumatoid Arthritis, a cousin of Lupus.  At one point, he was hospitalized and the required quarterly report to IRS didn't get off on time as it usually did.  Belatedly, he and I realized that the Training Center was about 30 days late and the penalty fee was something like $350.00 a day. We sent the Report, accompanied by a letter from me  to our contact in IRS explaining the situation, and I sent it all by Special Delivery.  Then I called the guy.  "Don't worry about it," he said jovially. "You're not going to fined anything.  These things happen."  Crisis was over.

We did the same application process later on with a spin-off from the Center -- dealing with health services.  Again, the Law School prof and students did the work on the IRS application.  That went through pretty quickly.

Still later, when a good friend and board member of our Training Center, Willard LaMere, organized the American Indian Business Association of Chicago and the Midwest  (I was its board member from Iowa), we again used the services of the good UI tax prof and his students to secure 501(c)3. Its focus was small business development and assistance to tribes interested in tribally-owned and controlled enterprises. That application went through in record time.

So our experiences with IRS in that vein and at that time were far from dire.

On the other hand, many of us know of other situations that have been extremely problematic for organizations.  This current mess is something else.  Earlier today, I posted this on RBB:

"The current IRS and AP et al. controversies obviously much involve the First Amendment.  If, whatever else develops out of those situations, the First comes to be seen, as it and the whole Bill are, formally and ideally non-relativistic in their coverage, that alone will be a very refreshing development.  On that, I am cautiously optimistic -- at least for the foreseeable future. (H)

Hunter Bear

HUNTER GRAY [HUNTER BEAR/JOHN R SALTER JR] Mi'kmaq /St. Francis 
Abenaki/St. Regis Mohawk 
Member, National Writers Union AFL-CIO
www.hunterbear.org  (social justice)

See the new expanded/updated edition of my "ORGANIZER'S
BOOK." It's the inside story of the rise of the massive Jackson
Movement -- careful grassroots organizing, bloody repression, sell-out 
and more.  It also covers other organizing campaigns of mine through
 the decades since Mississippi. It's replete with grass-roots organizing
examples and "lessons."  And it has my new 10,000 word 
introduction.  Among a myriad of positive comments and reviews:
 ". . .a local activist's important account of the deleterious effects
the involvement  of national organizations can have on indigenous
protest movements."  (Historian David Garrow.)
http://hunterbear.org/jackson.htm

See the related:  http://crmvet.org/comm/hunter1.htm

Stormy Adoption of an Indian Child [My Father]:
http://hunterbear.org/James%20and%20Salter%20and%20Dad.htm