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14 WWW.UNWLA.ORG “НАШЕ ЖИТТЯ”, ЛИПЕНЬ-СЕРПЕНЬ 2017 cally spelled out in our bylaws. It stands to reason, therefore, that we may not contribute money to other organizations whose purposes are not sufficiently similar to our own. We can donate money to other 501(c)(3) organizations only if such funds will advance our own charitable mission. Even so, there are strict rules governing these kinds of transactions: There must be no conflict of interest; 2 there cannot be any violation of donor restrictions; 3 there can be no misuse of the donated funds by the receiving organi- zation; and the donation of the funds must not imperil the financial well-being of our own organization. Violations of these rules may lead to personal consequences to our directors and other executives, who act contrary to their ethical or fiduciary obligations to our organization. In your capacity as a UNWLA director, executive officer, regional or branch president, or other official, your primary obligation is to the UNWLA. This does not mean that you cannot actively partici- pate in other organizations’ activities, but it does mean that while you are acting in the capacity of a UNWLA official, you must relinquish 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 in- terests of another organization with which you may be affiliated. You do not represent that other organi- zation while you are serving in your UNWLA role. So far, our activities—the actions of our executives and directors and all others serving in leader- ship positions – have been exemplary from an ethical standpoint. Our internal and external audits have consistently confirmed our clean bill of ethical health. But we must continue 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 activities; and c) Distributing organizational funds to causes that are not within the organization’s specified tax- exempt purposes in accordance with its bylaws. Let’s look at the question of responding to requests from other humanitarian organizations that solicit our funds, for example, to help needy women and children in Ukraine. Why shouldn’t we contrib- ute our funds to such organizations, which would then in turn distribute these funds to the needy in Ukraine? The bottom line is that our organization views itself as a humanitarian and cultural charity that provides direct support to needy Ukrainians and direct support to worthy care givers and to deserving Ukrainian cultural and educational institutions. We are not a “feeder” organization that collects dona- tions from people, primarily from our own Ukrainian-Americans, and then funnels them to other chari- ties. Even though these other organizations may promise that our funds will go to deserving Ukrainians, once we part with these funds, we have no assurance that they will be distributed exactly as we in- tend. And even if they were to go to needy Ukrainians, the so-called “credit” goes to those other organiza- tions, and not to our own. 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 individual wallets. People who contribute to our organization should be secure in the knowledge that the funds they donate are not just going to some other charities that 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. Equally important, 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. For example, can we honor a request from either a member or a potential donor to designate that funds go to a specific person or small group of persons? No, allowing the earmarking 4 of funds to specific individuals, no mat- ter how deserving, jeopardizes an organization’s tax-exempt status in the eyes of the IRS. This is because a charitable organization must be organized and operated for the benefit of an indefinite class of individ- uals, not for specific persons, even if those persons are in dire need of assistance. 5 Distributing funds to family members, friends, or other associates of UNWLA members is likewise an absolute no-no. 6 Furthermore, from the standpoint of the potential donor, “contributions” that are earmarked for the relief of a particular individual or family are not deductible for federal income tax purposes. This may come up in the case of donors who want to write a check to our organization, but also want to specify
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