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18 WWW.UNWLA.ORG “НАШЕ ЖИТТЯ”, ЛЮТИЙ 2016 other official, your primary obligation is to the UNWLA. Although this does not mean that you cannot actively participate in other organizations’ activities, it does mean that while you are acting in the capacity of a UNWLA official, you must re- linquish any loyalty you may hold to another cause or purpose. In other words, as an executive officer, director, or other official of the UNWLA, you cannot be guided by the interests of another organization with which you may be affiliated. You do not represent that other organization while you are serving in your UNWLA role. So far, the UNWLA‘s activities—the ac- tions of its executives and directors and all others serving in leadership positions—have been exem- plary from an ethical standpoint. Our internal and external audits have consistently confirmed our clean bill of ethical health. But we must con- tinue to be vigilant and cautious. The three things that have gotten organizations in trouble most often have been: a) Bad recordkeeping or a lack of accountability; b) Spending too much on unrelated business ac- tivities; and c) Distributing organizational funds to causes that are not within the organization’s speci- fied tax-exempt purposes in accordance with its bylaws. Let us look at the question of responding to requests from other humanitarian organiza- tions that solicit our funds, for example, to help needy women and children in Ukraine. Why shouldn’t we contribute our funds to such organi- zations, which would then in turn distribute these funds to the needy in Ukraine? The bottom line is that UNWLA views it- self as a humanitarian and cultural organization that provides direct support to needy Ukrainians and direct support to worthy caregivers and to deserving Ukrainian cultural and educational in- stitutions. We are not a “feeder” organization that collects donations from people, primarily from our own Ukrainian-Americans, and then funnels them to other charities. Even though these other organizations may promise that our funds will go to needy Ukrainians, once we part with those funds, we have no assurance that they will be dis- tributed exactly as we intend. And even if they were to go to needy Ukrainians, the so-called “credit” goes to those organizations, and not to the UNWLA. Moreover, if our contributors would have wanted to contribute to these other organizations or to any of the other thousands of human welfare organizations out there, they certainly would have done so. Similarly, if our branch members want to contribute to these other organizations, they are free to do so, that is, out of their own individ- ual wallets. But people who contribute to the UNWLA should be secure in the knowledge that the funds they donate to the UNWLA are not simply going to some other charities, which can do with them as they please, but rather that they are going to fund the goals we have set up in our bylaws and in our communications with the public. Importantly, from a tax standpoint, the way we control and distribute funds has a direct impact on whether our contributors can deduct their donations for federal tax purposes. We are a domestic 501(c)(3) organization with a significant foreign involvement, that is, a large portion of our total humanitarian expendi- ture involves providing grants to individuals and other organizations located in Ukraine and sever- al other countries. The IRS will disallow charita- ble deductions where a domestic exempt organi- zation does not exercise adequate discretion and control over grants made to foreign recipients. One of the criteria the IRS uses to determine the propriety of foreign grants is whether the charity’s board has reviewed and approved the project in the foreign country for which funds have been spent. Interestingly, the application I fill out every year for the Combined Federal Campaign (CFC) specifically instructs that only funds that we di- rectly grant to needy recipients are considered as part of UNWLA’s humanitarian support. In other words, funds forwarded to or through other hu- manitarian organizations are disregarded for purposes of CFC eligibility. This, if nothing else, should validate our organizational perspective as to how our funds should be distributed. To summarize, although we are not ex- plicitly prohibited from distributing our funds to other similar 501(c)(3) organizations, from a UNWLA policy perspective, we want the funds we raise to go directly to recipients whom we directly choose, and not to middlemen. From a federal tax standpoint, funds distributed without approv- al of the UNWLA’s board of directors may jeop- ardize the deductibility of donations by donors.
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