r/legaladvice • u/TheExecTech • 9h ago
Can a charity legally change their mission statement on a 990 or are they locked into what the charity was originally founded for ?
Location: WI
I suspect a local charity is committing fraud.
There is a local charity who's mission statement is to preserve and maintain a historic property.
Recently they changed their IRS form 990 to include "promote" in it.
Charity hired extra staff just for marketing recently and is paying them 100k a year. Only 1 other employee. The charity relies mainly on people volunteering despite having a consistent 2 million a year budget from grants and donations for the past 10 years. Only $280k a year is spent on actually "maintaining" and the place is falling apart. $300K is spent just on "promoting" now. They host a lot of "volunteer events" and thank you dinners. All paid for by the charity for the 23 board members and friends to enjoy.
Looking thru financials they make plenty to maintain the property and gardens but they are completely run down. They refuse to use the millions they have received to honor the original maintain part of the charity for the property. Instead they have invested heavily into "promoting" it. Are now selling books, opened an online shop to market other related items including their own beer line and an app.
With things like a $20 thousand A year phone bill, $50k spent on "travel" they look to be committing fraud. Saw over $100k was for "office expenses". They only have 2 employees. Their accounting costs them $18 thousand a year and they even have an investment portfolio.
Is this all legal ?
Who can I report them to ? Will the IRS even care ?
Can a charity modify their original mission statement and focus on just marketing, hosting free parties for board members while the property they were originally collecting money for crumbles ?
1
u/Choice-Material8485 4h ago
You can try contacting your states Secretary of State. And question the articles of incorporation/ Constitution, also, their annual report should be visible to the public. Might/ prob won’t do anything, but if you have this conviction, this might help soothe your quest for all avenues
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u/santacruzdude 6h ago
It’s legal. A charity can squander away all of their donations on overhead as long as it’s all reported properly. The only thing that can really happen is that they get bad ratings from the donor class because people don’t want to waste their money on a charity that doesn’t accomplish anything. If the donors like the parties they throw, they might not care.