A cautionary tale for Duluth collectives?

Recently in Minneapolis, the Sisters’ Camelot collective faced restrictions in its ability to canvass for donations as the group was no longer listed as a registered nonprofit or charity in Minnesota. It has been told to cease fundraising efforts with a potential $25,000 fine per fund solicitation. The canvass workers unionized and have been calling for collective organizers to step down to restructure in the wake of the mishandling of the collective.

From the Industrial Workers of the World website: Union Exposes Wage Theft, Gross Negligence at Sisters’ Camelot, Calls for Resignation of Managing Collective

Sisters’ Camelot provides food and meals to homeless folks and low-income neighborhoods in Minneapolis. It relies on monetary donations and donations of food from merchants.

This is not unlike Duluth’s very own Loaves and Fishes Catholic Worker Community.  Not listed as a nonprofit in Minnesota, nor a church/religious organization, yet it solicits funds from the community and even states on its Facebook page that the running of its houses costs up to $50,000 per year (the threshold for income requiring an organization to file a federal 990 individual tax form as a nonprofit).  On March 8 it asked for $3,000 on its Facebook page to help pay for insurance for its homes.

Should Loaves and Fishes and other Duluth collectives be wary in light of this news?  Is there a line between helping the poor and marginalized as a household service and negligence to the law in not having accountability as a registered nonprofit?

8 Comments

moosetracks

about 10 years ago

Loaves and Fishes has never operated under charity status.  Those who donate to them, know that full well.  Their soliciting of funds comes from the private community.  Everyone involved is a volunteer, there is no paid staff, canvass or otherwise.  I think that comparing Loaves and Fishes to Sisters Camelot is an unfair comparison.  While both engaged in social justice issues, their tactics are quite different.

adam

about 10 years ago

So if you're, like, a promotional organization that is receiving money from a city and a visitor convention bureau, you should probably be a nonprofit, or at least have a fiscal agent?

scotts

about 10 years ago

I can't speak to all aspects of the law by any means, but what Adam is saying sounds like a business to business contract arrangement for services.  Minnesota charitable solicitation law seems fairly clear when an organization solicits donations from the public for charitable purposes:

A Guide to Minnesota's Charities Laws

scotts

about 10 years ago

Currently, Loaves and Fishes Community is only registered as an assumed name for Judith Sausen. (Anyone can look this up on the MN Sec. of State web page.)  Judy has not lived at the community for some time, and I doubt she'd like to be personally liable for the income that's going through the community in the name of Loaves and Fishes Community.  

Really, to protect volunteers and their guests, having a better legal foundation is just a good idea. Register as a religious organization/church, register as a nonprofit, or find a fiscal sponsor. Anything else is evading the law, misleading the public, and not responsibly serving the live-in guests and volunteers from liability.

edgeways

about 10 years ago

Have you actually talked to Judy, or the L&F folks about this? Perhaps they know what they are doing, or perhaps not, but it would seem if that is the organization you are either targeting, or using as an example, engaging directly with them would be more profitable then hoping they stumble upon this. Are you a lawyer? Are you secure in your opinion? As it stands, just jabbering away at it here seems, well, less than productive.

scotts

about 10 years ago

I have also sent an email to them, yes.  This kind of negligence has happened from my knowledge for years.  I just wanted to bring to light some things for public consideration.

Bret

about 10 years ago

I'll let L&F speak for themselves, but I know them and from what I know this is a well thought out choice.  You can take contributions without having 501(c)(3) status, it's just that those contributions are not tax deductible. As L&F makes that clear to their donors.  There's nothing amiss here.

Joel Kilgour

about 10 years ago

I agree transparency is good. So for the record, let me briefly address what seem to be Scott's four main accusations (inferred and otherwise). If Scott or anyone else has more questions, feel free to call me at Dorothy Day House (218-724-2054):

1. We do not exploit our employees. We have no employees. 

2. WE ARE NOT REGISTERED OR INCORPORATED. There, I said it. In fact, we tell everyone... heck, it's right there in the appeal he references. This is true to the personalist philosophy of the Catholic Worker movement, and also pragmatic. We house people other agencies cannot because of funding or legal requirements. To operate differently would be a bigger ethical problem for us.

3. We are an intentional community funded entirely by its own members and supporters. If we canvassed or sent blind appeal letters, laws regarding charitable solicitation might be relevant. We don't. 

4. $50,000 a year. Let that sink in. After giving away several thousand dollars annually in direct aid to our guests (transportation, rent assistance, work clothes, etc), we use what's left to run three households that are effectively the second largest emergency shelter in Duluth, as well as a free community bike shop and tons of housing rights organizing. Whatever else doesn't come in donations we salvage or grow in the garden. Good luck finding a registered nonprofit that can pull that off. If you'd like a quarterly break-down of where the money goes, check our next newsletter.

What it comes down to is this: if you like L&F and trust our reputation, by all means help us out. If not, that's okay too. We're not going to come knocking at your door.

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