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Posted: February 23, 2010 12:30 a.m.

BOC considers umbrella 501(c)(3) to simplify donation process

Umbrella would contain senior services, other non-profits

The Newton County Board of Commissioners are considering the formation of an umbrella 501(c)(3) organization that would oversee all other non-profits related to the county.

The idea behind a single 501(c)(3) would be to simplify accounting for the county by having only one fund, as opposed to having several separate funds for each county-related non-profits, like senior services, the Miracle League Field and the Friends of Gaithers.

Many corporations only donate to 501(c)(3)s because of those donations are then tax-exempt. Oddly enough, the county and other governments, also qualify for tax-exempt status, but County Attorney Tommy Craig said many corporations have become ingrained to donating only to 501(c)(3)s.

“They (corporations) don’t want to change, and they have the money. I think the 501(c)(3) is regrettable red tape, but it’s necessary if we want the money,” Craig said.

In addition to non-profits, this would make it easier for corporations to donate directly to the county. District 5 Commissioner Tim Fleming said many people want to donate to departments like animal services, including items like food and medicine, but he said those people also want tax-exempt status.

An umbrella organization could clear up that any confusion about tax-exempt status.

The proposal was made because of recent problems with the organizational structure of the Newton County Senior Services 501(c)(3) and its board of directors.

Senior Services used to be a county department before it was converted to a 501(c)(3) in 2006. District 1 Commissioner Mort Ewing has repeatedly said that, in 2006, he thought the 501(c)(3) was being created simply to allow senior services to receive grants from corporations. He does not approve of the senior services board of directors, which is composed of volunteers appointed by the BOC, having any oversight over county employees or the 501(c)(3)’s budget.

“That’s where we strayed,” he said at the county’s retreat, which was held this weekend at Burge Plantation in Mansfield.

Administrative Assistant John Middleton said that before senior services had been turned into a 501(c)(3), the organization had missed out on an approximately $50,000 grant from Phillip Morris. He said the only reason senior services didn’t get the grant was because it wasn’t a 501(c)(3). He said other corporations expressed similar thoughts.

However, senior service’s board of directors has not been functioning according to some members. Last year the senior services chairman and two members resigned, and since that time the board of directors has not met. Ewing and District 5 Commissioner Tim Fleming, each of whose members resigned, have expressed concern over the dysfunction of the board.

Without a full board, senior services was ineligible to receive a $60,000 grant from the United Fund. To attempt to remedy the situation with a temporary fix, the BOC appointed Ewing and Fleming to replace their members, as well as BOC Chairman Kathy Morgan to serve as chairman.

It was later discovered that the 501(c)(3)’s bylaws did not allow a commissioner to serve on the senior services board. On Sunday, the BOC held a special called meeting to rescind those appointments and appoint new members. Again, the appointments are intended to be temporary to allow senior services to receive the United Fund grant. The members will be replaced when the future of the 501(c)(3) board if determined.

Ewing appointed County Clerk Jackie Smith as District 1 representative; Fleming appointed Recreation Commission Director Tommy Hailey as District 5 representative; and former senior services chairman Benny Phillips was reappointed in that same position.

Currently, the senior services 501(c)(3) is the only non-profit that has even been officially adopted by the county. As a result, under the umbrella proposal, Newton County Senior Services would simply be reorganized and retitled as something like Newton County Non-Profit Services. Ewing asked if the board of directors for this organization could be the BOC and Craig said he believed that would be doable.

Then other non-profits could be brought under the umbrella group. Instead of those non-profits having their own board of directors, they could then have committees that operated under the umbrella board. Ewing said this is how the Friends of Gaithers already operates. There is simply a committee and donations to the group are made through the county.

Morgan said each nonprofit could have a separate agreement with the county to suit that 501(c)(3)’s needs. The umbrella board would have much more oversight regarding senior services, which has county employees, as opposed to something like the Miracle League Field project.

District 3 Commissioner Nancy Schulz initially was hesitant about the umbrella proposal, because she thought it would be increase the size of government.

“The trend is to decrease the size of government, not grow it. What would stop all 501(c)(3)s, like the chamber, the Arts Association, from coming under the umbrella?” she asked.

However, Morgan said that many of these groups are already supported by the county in some way; money is already funneled through the county to these groups. This umbrella would actually simplify the process. Middleton said when a project like the Miracle League Field was completed and donations stopped coming into the county, the umbrella would prevent the need for that 501(c)(3) to exist and, therefore, have to be disbanded.

After hearing these reasons, Schulz said she had no problem with the umbrella idea, but she said the word “501(c)(3)” still causes her problems, because it seems like it’s inappropriate for non-profits to mix with government.

The BOC reached a consensus to have Craig’s office move forward with exploring the umbrella 501(c)(3).
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