|Tax year||Cash, savings, and investments (Line 22, IRS Form for the indicated year)|
|At beginning of year||At end of year||$ increase||% increase|
|2000 - 2002||$17,487||$54,138||$36,651||+209% (average 69.8% per year)|
Not bad. Not bad at all. But -- something is puzzling about these figures. Mr. Hall is constantly asking for donations. On many of the "MIA activist" web sites one finds appeals from Hall for money to support his research and legal expenses. Yet, we find the cash balance for his organization increasing each year by healthy amounts while his research and legal expenses -- see below -- are quite low -- in fact, the only legal fee he paid is the $10,000 fee that the court ordered him to pay.
Please click on the links to the individual year 990's where you will find that -- for the three years reviewed here -- an average of 47 percent of the donations to his organization has gone to increase the cash balance of the organization. That is, while he is appealing for funds to pay his legal fees, he is, in fact, using donations to build up his bank balance.
The IRS requires that 501c(3) organizations report certain expenses and expenses that exceed certain levels. These expenses are reported on Supplemental Schedules for each tax year. I did not scan and post Hall's expenses for 2000 - 2002 but here they are.
|Legal research (1)||--||--||$10,000|
|Bank service charges||$22||--||$139|
|Auto & truck||$57||--||--|
|Personal property tax||$7||---||--|
|Licenses and permits||--||$50||$50|
|Postage and freight||--||--||$547|
|Total expenses reported on Supplemental Sheet||$9,605||$10,720||$22,123|
(1) See the material quoted from Hall's web site -- he paid this $10,000 only because the court ordered him to do so.
Not-for-profit organizations must get their money from somewhere. Some agencies operate such revenue producers as thrift stores, flea markets, and other operations that produce funds for the organization. All not-for-profits solicit donations.
Fund raising can be a big business. There are very large and wealthy organizations that have made fund raising into a science. I will not go into the details here but, if you want to raise money via donations, you can do it yourself, or, you can hire a fund raising professional -- who can be anyone from a free-lancer who operates on a shoestring to a sophisticated fund raising organization that raises really big money and charges fees to do so.
A rule of thumb among fund raisers is that the fund raiser should turn over to the not-for-profit at least 80 percent of what is raised. I have seen some operations -- several of them involved in the MIA issue -- in which the fund raiser kept 70 to 80 percent and gave the remainder to the cleint -- the not-for-profit. One such organization was "Operation Rescue" run by retired Air Force Colonel Jack Bailey -- his fundraiser gave him 10 to 20 percent and kept 80 to 90 percent -- all the while Bailey was asking for donations to help him run operations to find and free US POWs in Southeast Asia.
Another MIA "activist" who has done well from fund raising based on the Vietnam War MIA issue is Ted Sampley of Kinston, NC. Sampley created a self-contained financial network that revolved around POWs and MIAs. One of Sampley's companies, Red Hawk, manufactured T-shirts and sold them to his nonprofit Homecoming II, which in turn sold them at the organization's "vigil booth" on the Mall in DC. Although Sampley could say he was destitute, with only one personal bank account containing $100, the organizations were quite healthy. His reported earnings from the cash-only T-shirt concession amounted to nearly $2 million over three years.
Mr. Hall has not pushed fund raising to these limits, but he seems to be catching on. Let's look at some figures and examine how much he spent of fund raising and how much he raised, as revealed in his Form 990's.
|Tax year||Fundraising expenses||Amount raised||% of fundraising costs that went to raising funds||% of donations that went to increase cash on hand this year|
|2001||$7,705.00||$26,812.00||29 %||58% ($15,484)|
|2002||$7,732.00||$38,030.00||20 %||22% (8,428)|
There is almost no data here with which to analyze his fund raising efficiency; also, he does not identify how and where the fund raising expenses were spent.
In the first year that he began to spend money on fund raising, it appears to have made no difference in the amount of funds raised. That is, Hall went from spending nothing on fund raising in 2000 to spending $7,705 in 2001 -- with almost no increase in the funds raised. However, look at the next year -- a fairly substantial increase in the amount raised. Also, in tax year 2002, his fundraising efficiency increased. This is a normal development -- in the first year of a serious fund raising campaign, no one expects to make much money. In fact, most professional fund raisers expect a loss in the first year because that year is devoted to testing appeals, devising and revising the appeals, and generally getting started.
Here is what I notice from these figures:
No identification as to where the fund raising expenses are going. Are they purchasing T-shirts from Ted Sampley, or, are they carrying out a professional fund raising plan?
In each year for which I have records, a large portion of the funds raised goes to increase the organization's cash on hand at the end of the year, not to provide more services.
There is one other angle that needs to be mentioned here. The IRS is quite interested in whether or not the non-profit organization has family members on its board and if the organization has contracted with organizations owned by family members.
Let me explain this with some real-life examples.
Suppose you form a non-profit agency to provide job training in low and very-low income neighborhoods. You receive one or more federal, state, or local grants for your program. Your wife forms a company named "Training Partners, Inc." and your organization signs a contract with her company by which her company conducts training for your non-profit and your non-profit pays her company a nice amount of money.
Or, suppose your brother-in-law forms a fund raising company and your non-profit contracts with him to conduct your fund raising.
Or, your sister could form a computer management company and your non-profit could contract with her company to install and maintain your computers and your office network.
As you see, the opportunities for corruption are many. You contract with friends or relatives for services, pay them inflated contracts, and they and you make out like bandits using donated funds or grant money.
Not that there is evidence that Mr. Hall is doing this - - but it's not unheard of.
The Form 990's list the following officers and directors of the POW/MIA FOIA Litigation Account:
Mike Benge, 1st Vice-President and Secretary. Benge was a USAID officer in Vietnam; he was captured and released at Operation Homecoming.
Wayne Sill, 2nd Vice-President and Treasurer. I don't know Mr. Sill.
Roger Hall, CEO and Director.
One other matter needs to be mentioned here, though it does not relate to Mr. Hall's finances. Go back and read the paragraphs that I snipped from his website and note this sentence:
. . . On August 10, 2000 the U.S. District Court for the District of Columbia refused to dismiss the CIA's case and revealed in a court order that the CIA had information on the last known location of a live POW/MIA. . .
When Hall learned during a court hearing that the name of one POW was in some of the documents he was seeking, he quickly got on the various MIA "activist" websites, spreading this information and asking for donations. Stop for a minute and think about this. Hall alleges that the CIA has thousands of doucments that report and record intelligence information collected during the Vietnam War that identify US POWs.
At Operation Homecoming in February-March 1973, 591 US POWs were released. Another 100-plus Americans were captured during the war and either escaped or were released during the war. Another 65 died in captivity. That's around 750 Americans who were captured by the Vietnamese or their Lao or Cambodian allies. Because information about captured Americans was one item of information that the CIA was charged with collecting during the war, why would anyone be surprised if their files contained documents that located or identified one or more POWs? Note that Mr. Hall's comment does not mention the date of this alleged CIA information - - he's excited about information on the whereabouts of a US POW during the war?
Mr. Hall's analytical abilities amaze me.
So, what do we learn from the tax returns filed by the POW/MIA FOIA Litigation Account? Not much, though there are a few points that need to be reiterated.
While Mr. Hall solicits donations to pay his legal expenses, he is actually using the bulk of the money coming into the organization to build up cash reserves. Which raises the question of what happens to the cash when the organization disbands?
Hall went from spending nothing on fund raising to spending over $7,000.00 per year with only slight increases in donations. Either his fund raising is not especially effective, or, he has a sweetheart deal with a fund raiser as a way of passing funds to someone.
That's about all. The next time you feel moved to donate to Mr. Hall's cause, you may want to consider if you want your donations to go to increasing his bank account or to doing some good. My advice: Donate to your church, to a local food pantry, or to Habitat for Humanity.