Re: CLEVELAND LODGE SENDING MONEY TO ADYAR
M K Ramadoss
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The situation of Cleveland Lodge is not a simple question of sending money.
Cleveland Lodge set up a sister entity which is Foundation. It is a type of Foundation Called Private Foundation for tax purposes. It is classified as tax exempt foundation. It does not pay tax on its income.
However, there is a requirement they distribute all their income annually to avoid paying tax.
These kind of foundations can distribute only to other tax exempt operating entities which are classified as public charity.
If Cleveland Lodge Foundation sends money to Adyar directly it would not be deductible and Lodge has to pay income tax on it.
Since American Section is a public charity, money sent to it qualifies for tax deduction for the foundation.
So money is sent to American Section for onward forwarding to Adyar using American Section as a conduit.
Here comes the problem. For long time, money meant for Adyar would be kept by American Section and Adyar President used to spend it at his/her discretion. There is no transparency how the money is spent since it is not in the accounts of Adyar. Money is in no man’s land. Even if the money lands at Adyar no one knows how it is spent. No transparency.
The other question is the legality from the American Side. Since deductible money cannot be sent to Adyar, trying the circumvent it by sending it thru American Section may not be legal. I am not a lawyer but this is a question that Cleveland Lodge need to clarify. Cleveland Lodge Foundation has a responsibility to monitor if the money is indeed spent by Adyar for furtherance of theosophy because the money should be spent for the objectives set out in the organizing documents of Cleveland Lodge Foundation. For the last three months my requests for copies of the Foundation organization documents received no answer. These documents are in the public domain and by law they are required to provide it to anyone who asks for it. This is to provide public oversight.
There is bigger question. Only 1/3 of the income is spent for local charity and theosophical activities. Other 1/3 goes to American Section with strings attached. Also another 1/3 is sent to Adyar using American Section as a conduit. The question is why bulk of money is shipped to Wheaton and Adyar instead of spending it in local theosophical endeavors. The amount is not small. Last time I saw – the info is on Internet – 19K spent locally and 25K each sent to Wheaton and Adyar.
In money matters full transparency is a protection to avoid it being spent on wrong projects or even misused or misappropriated.
Since tax exempt money involved a portion of taxpayer – public money, everyone has a right to ask for transparency. The intent of the law is to encourage public to have oversight of the tax exempt organization.
Sending money to Adyar is no problem. Cleveland Lodge sending it in a manner it is allowed by the law to be deducted by them and aviod paying taxes. It may look complicated but the principle behind is simple.
On Fri, Nov 1, 2019 at 7:31 PM Konstantin Zaitzev via Groups.Io <firstname.lastname@example.org> wrote:
As far I know, there is Orlando Lodge in the USA, which is a lodge directly attached to Adyar. You shlould contact them and ask how they solve this problem, as they most probably transfer money to HQ somehow.