CLEVELAND LODGE SENDING MONEY TO ADYAR


M K Ramadoss
 

CLEVELAND LODGE SENDING MONEY TO ADYAR USING WHEATON MAY BE VIOLATING TAX EXEMPT LAWS --

Cleveland Lodge of TS sends $25K annually to Wheaton earmarking it for Adyar. This is much more than it spends on local charities.

There are many problems with this. Cleveland lodge, by law, cannot send money to Adyar directly. When money is sent to Wheaton, one is not sure if the money does reach Adyar or parked in Wheaton and spent with no transparency or even if it reaches Adyar, how it is spent since there is no transparency.

As a tax exempt foundation, Cleveland Lodge money has part of American Taxpayer money involved. There is no indication if Cleveland Lodge is monitoring the money sent to Wheaton. Such monitoring is essential since part of the money is coming from the taxpayer.

Once a foundation gets tax exempt status, it is bound to be transparent and public has a right to oversee how its income is spent.

After 9/11, US Government is very concerned about money that goes overseas. Hence, it is the professional advise that

"It is advisable for the sake of clarity in the grant relationship and good business practices in general that the charity take the additional step of putting a grant agreement in place requiring progress reporting and return of the funds if they are used for an improper purpose."

Any one interested can contact Internal Revenue Service about the above issue. Surely such contacts would be taken seriously. And it costs nothing because we are talking about taxpayer money - your and my tax money!

Peace

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Konstantin Zaitzev
 

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.
If you don't trust an American Section and its way doing business, you'd better to vote for being such a lodge too.

Some lodges here in Russia pay directly too but our sutuation is a bit different. We do not trust our presidential representative, yet we want to be in a Section. 7 Lodges applied for an association last year but got a refusal from Adyar. It seems to be a discrimination on ethnic grounds, as Togo with 2 lodges is permitted to have an associatiom while Russia with 7 not.


M K Ramadoss
 

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.

MKR



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On Fri, Nov 1, 2019 at 7:31 PM Konstantin Zaitzev via Groups.Io <kay_ziatz=yahoo.com@groups.io> 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.
If you don't trust an American Section and its way doing business, you'd better to vote for being such a lodge too.

Some lodges here in Russia pay directly too but our sutuation is a bit different. We do not trust our presidential representative, yet we want to be in a Section. 7 Lodges applied for an association last year but got a refusal from Adyar. It seems to be a discrimination on ethnic grounds, as Togo with 2 lodges is permitted to have an associatiom while Russia with 7 not.