Nonprofit lawyer here and small donor to FAIR. I think there might be some confusion that I can clear up to an extent.
There are a number of stages that a nonprofit typically goes through on the way to becoming a full-fledged 501c3 tax-deductible charity, and they aren't entirely mutually exclusive from a chronological standpoint, i.e. they often operate in parallel. It sounds like FAIR is at stage "1.5". The first stage is sponsorship under another organization's (in this case, "United Charitable") charitable status. But they have also taken the first stop towards "state 2", going out on its own, by filing articles of incorporation. The articles of incorporation is a state law matter that does not say much of anything about federal tax c3 charitable status, so even having been incorporated, they would still need to collect funds under the fiscal sponsorship. But they can't get c3 status without first incorporating, so it's typically done in parallel.
The "directors" listed under the incorporation papers, who would more accurately be termed, "incorporators", are sort of a "proto-" Board of Directors, but it wouldn't really surprise me if they are not in any way acting like a real Board of Directors, because the organization is still for the most part operating under the sponsorship of another organization, which does have a Board of Directors with fiduciary responsibilities around its activities and all of the money flowing to it.
It's likely that the three incorporators/directors will eventually become members of the Board of Director once it's up and running as a separate c3, but it's not a given. Right now, there just needs to be three people listed in the incorporation papers for purposes of state corporate law. They probably haven't done a single thing in that capacity other than agree to have their names listed there (and yes, hopefully they did in fact agree to do so), and if that were the case, there's nothing wrong with that. There's already another Board (United Charitable) exercising fiduciary responsibility over all of the money and activities of the organization.
The "Advocacy Fund" is a related but separate issue. Whether they have their own c3 status or are operating under the c3 status of another organization, they are not allowed to use c3 funds for political activities. But in order to engage in political activities, many nonprofits establish related "advocacy" funds that are allowed to do political activities, so long as the funds are segregated, both coming in and going out. That is to say, the funds that go to the c3 cannot be used in the advocacy fund, and the c3 cannot engage in advocacy except to the extent that it's paid for out of those segregated funds. Funds that are donated to c3 advocacy funds are not tax-deductible. So they are inviting people to give to the advocacy work, which is not tax-deductible, but if the donors would rather donate to the tax-deductible c3, they are invited to go over and do so. Very normal.
None of that addresses the other kinds of issues raised, so don't take this as any kind of endorsement of his leadership. I have zero information about any of it other than what you've written here. Just pointing out that there are good explanations for these particular issues.
They are supposed to be a non-partisan organization - why are they doing advocacy work if they are non-partisan? And you haven’t answered the fact that Melissa and Bari likely did not know they were listed in this document.
Advocacy and partisanship are very different things. I’d think anyone donating to FAIR wants them to use their money to advocate for free speech, but on a non-partisan basis, like we used to see with the old ACLU. I read 20@20’s response as helpfully clearing up the question about why there are two different donations sites, with the one being designated not tax deductible. In any case, I very much appreciate you bringing this issue forward; I hope they can install a CEO who will stand strongly and fairly for FAIR’s mission, because it is more important than ever.
As I said, they should've known that they were listed, but if they had already agreed to be on the board generally, it's possible that they weren't apprised that they were listed on this particular step in the process. I wouldn't do that, but I wouldn't be shocked to see that it had been done. People are busy, it's possible that they would agree even after that fact that there were better things to pay attention to that state-level incorporation paperwork.
The c3 cannot do political advocacy work, but an "advocacy fund" that is entirely funded by donations directly to that fund is free to do certain kinds of advocacy work, depending on how they set it up. Every major public interest c3 organization also has a related advocacy fund (usually a c4) where they encourage people to donate without an expectation of tax deductibility if they want to see more "political" type of activities. "Partisan" is another question, you do political advocacy work on a non-partisan basis, or you can also do it on a partisan basis, in which case there are additional kinds of rules that apply.
Again, do not take this as any sort of endorsement of his leadership. I have no basis whatsoever to say whether or not he is a good leader of the organization, and I am interested as a donor in the question.
Wow! Thank you for doing the research to expose all of this. I’m 100% with you - want FAIR to succeed but not with a corrupt / unethical leader. He needs to go!!
This isn't infighting. This is exposing blatant corruption. Also, what good has come from FAIR specifically? Good COULD come from it. What have they actually done so far?
Nonprofit lawyer here and small donor to FAIR. I think there might be some confusion that I can clear up to an extent.
There are a number of stages that a nonprofit typically goes through on the way to becoming a full-fledged 501c3 tax-deductible charity, and they aren't entirely mutually exclusive from a chronological standpoint, i.e. they often operate in parallel. It sounds like FAIR is at stage "1.5". The first stage is sponsorship under another organization's (in this case, "United Charitable") charitable status. But they have also taken the first stop towards "state 2", going out on its own, by filing articles of incorporation. The articles of incorporation is a state law matter that does not say much of anything about federal tax c3 charitable status, so even having been incorporated, they would still need to collect funds under the fiscal sponsorship. But they can't get c3 status without first incorporating, so it's typically done in parallel.
The "directors" listed under the incorporation papers, who would more accurately be termed, "incorporators", are sort of a "proto-" Board of Directors, but it wouldn't really surprise me if they are not in any way acting like a real Board of Directors, because the organization is still for the most part operating under the sponsorship of another organization, which does have a Board of Directors with fiduciary responsibilities around its activities and all of the money flowing to it.
It's likely that the three incorporators/directors will eventually become members of the Board of Director once it's up and running as a separate c3, but it's not a given. Right now, there just needs to be three people listed in the incorporation papers for purposes of state corporate law. They probably haven't done a single thing in that capacity other than agree to have their names listed there (and yes, hopefully they did in fact agree to do so), and if that were the case, there's nothing wrong with that. There's already another Board (United Charitable) exercising fiduciary responsibility over all of the money and activities of the organization.
The "Advocacy Fund" is a related but separate issue. Whether they have their own c3 status or are operating under the c3 status of another organization, they are not allowed to use c3 funds for political activities. But in order to engage in political activities, many nonprofits establish related "advocacy" funds that are allowed to do political activities, so long as the funds are segregated, both coming in and going out. That is to say, the funds that go to the c3 cannot be used in the advocacy fund, and the c3 cannot engage in advocacy except to the extent that it's paid for out of those segregated funds. Funds that are donated to c3 advocacy funds are not tax-deductible. So they are inviting people to give to the advocacy work, which is not tax-deductible, but if the donors would rather donate to the tax-deductible c3, they are invited to go over and do so. Very normal.
None of that addresses the other kinds of issues raised, so don't take this as any kind of endorsement of his leadership. I have zero information about any of it other than what you've written here. Just pointing out that there are good explanations for these particular issues.
They are supposed to be a non-partisan organization - why are they doing advocacy work if they are non-partisan? And you haven’t answered the fact that Melissa and Bari likely did not know they were listed in this document.
Advocacy and partisanship are very different things. I’d think anyone donating to FAIR wants them to use their money to advocate for free speech, but on a non-partisan basis, like we used to see with the old ACLU. I read 20@20’s response as helpfully clearing up the question about why there are two different donations sites, with the one being designated not tax deductible. In any case, I very much appreciate you bringing this issue forward; I hope they can install a CEO who will stand strongly and fairly for FAIR’s mission, because it is more important than ever.
Yeah his response frankly leaves out a lot. He doesn't know as much as he thinks he knows, which will all become clear over the next few weeks.
I will be paying attention. I hope FAIR ends up in the best of hands. We need it.
As I said, they should've known that they were listed, but if they had already agreed to be on the board generally, it's possible that they weren't apprised that they were listed on this particular step in the process. I wouldn't do that, but I wouldn't be shocked to see that it had been done. People are busy, it's possible that they would agree even after that fact that there were better things to pay attention to that state-level incorporation paperwork.
The c3 cannot do political advocacy work, but an "advocacy fund" that is entirely funded by donations directly to that fund is free to do certain kinds of advocacy work, depending on how they set it up. Every major public interest c3 organization also has a related advocacy fund (usually a c4) where they encourage people to donate without an expectation of tax deductibility if they want to see more "political" type of activities. "Partisan" is another question, you do political advocacy work on a non-partisan basis, or you can also do it on a partisan basis, in which case there are additional kinds of rules that apply.
Again, do not take this as any sort of endorsement of his leadership. I have no basis whatsoever to say whether or not he is a good leader of the organization, and I am interested as a donor in the question.
Fact or pure conjecture? Have they stated that they didn’t know? Many orgs have c4’s for nonpartisan advocacy work, e.g., RepresentUs.
Wow! Thank you for doing the research to expose all of this. I’m 100% with you - want FAIR to succeed but not with a corrupt / unethical leader. He needs to go!!
This isn't infighting. This is exposing blatant corruption. Also, what good has come from FAIR specifically? Good COULD come from it. What have they actually done so far?