Realities For Children Fiscal Transparency
The Importance of Fiscal Efficiency and Transparency
As is the case in most child abuse and neglect situations, the most dangerous tools abusers have is ignorance and secrecy. Secrecy is also a danger when it comes to charitable giving and non-profit agencies. Lack of information and transparency to donors can allow for misappropriation and inefficient uses of resources.
It is the policy of Realities For Children to not only offer the highest possible level of efficiency when it comes to donor dollars, but to also offer the highest level of transparency in how those dollars are used.
How does Realities For Children Charities realize 100% of donations?
The only way to do this would be to have absolutely no overhead or administrative costs. Although this can occur in charitable efforts that are short-term by design, for example a charitable outreach for a family who has undergone a tragedy, it does not normally occur for a charity that is sustainable for the long term. This is because to be a sustainable organization there will always be overhead and expenses. Realities For Children Charities, however, is both sustainable and has no administrative expenses which is what makes this organization unique and has gained national attention and awards for fiscal responsibility. Recognition and Awards
How is it possible for a sustainable charity to have no expenses?
Imagine if a local business leader decided he really liked one particular charity in his community and said “I want to see more donations going directly to the services they provide”. Imagine, he contacted the director of the charity and said, “My business is successful and I have the ability to take from the dollars my company earns and cover all the administrative costs of your non-profit.” As a result, all costs were eliminated other than what the non-profit was designed to do. When the word got out that this charity could put 100% of donor dollars directly to its services because of their private partnership with a local business owner their gifts increased dramatically.
This is the simplified story of how Realities For Children Charities is able to eliminate all administrative expenses. The difference is that the business that underwrites all administrative costs was actually created specifically for that purpose and is called Realities For Children, Inc.- which is a cooperative of over 230 concerned business leaders in Larimer County that come together specifically to provide underwriting support to Realities For Children Charities.
So, Realities For Children is actually two different organizations?
The first entity is Realities For Children Inc., a membership organization comprised of approximately 230 local businesses. These Business Members pay a monthly membership fee and it is understood that these fees underwrite the administrative expenses for Realities For Children Charities. Our Business Members do receive marketing support from us, so these membership fees are not tax deductible donations, but they are tax deductible advertising expenses.
The second entity is Realities For Children Charities, a charitable organization where all tax-deductible donations and fundraising returns are directed. Realities For Children Charities is designed to provide: Community Awareness, Special Youth Activities and Emergency Funding for services when all other resources are exhausted.
What is the tax status of Realities For Children Charities?
Realities For Children Charities is a 501(c)3 charitable organization as determined by the Internal Revenue Service. Contributions to Realities For Children Charities are deductible and RFCC is also qualified to receive tax deductible bequests, devises, transfers or gifts. Click here to view our IRS Tax Determination Letter or our Certificate in Good Standing.
As a result, your donation is tax-deductible, and every penny is directed to program services. Donations don’t simply serve one agency’s mission, but are accessible to all our affiliate youth agencies, which cover the entire demographic of abused and at-risk children in Larimer County.
What is the tax status of Realities For Children, Inc.?
Realities For Children Inc. is a Colorado non-profit corporation, however, it is not an IRC Section 501(c)3 organization. As a result, membership fees are considered a deductible advertising business expense and cannot be claimed as a charitable donation deduction. Furthermore, to honor the intent of the entity’s purpose, RFC has voluntarily legally subjected itself to the limitation of not allowing any private party to benefit from the net income or assets upon dissolution.
**Generating administrative revenue through business advertising dollars eliminates the competitive concern with other non-profits revenue from donor dollars. This legal status of Realities For Children maintains the integrity of the intent of the membership dollars toward community service versus personal gain of a private business.
Just as important as efficiency, is transparency- so that whether you are a donor, a business member, an event attendee or community member all information is accessible and clear. The entire design of Realities For Children is about collaboration and can only exist and serve effectively with community support.
Realities For Children Charities:
With all overhead costs covered by a separate entity the issues of transparency become much less of a problem. Concerns with transparency usually arise with organizations when donors want to know how much of their gift is going to the program they are donating to versus the administrative costs.
Larger issues often arise when the compensation of salaries to directors of said non-profits arise as well as fiscal accountability of administrative expenses are called into question.
With RFCC there are no compensation concerns as there are no paid employees and with no other administrative expenses the potential for misappropriation is greatly reduced. All requests for annual allocations are received directly from the Affiliate Agency Director the first of every year based on the previous year needs and then presented to the RFCC board of directors for review and approval.
When Guidestar released its report “The State of Nonprofit Transparency, Voluntary Disclosure Practices”, Realities For Children Charities followed their recommendations very closely by providing the following information at the fingertips of any interested party:
Realities For Children Charities Voluntary Transparency Policies:
- Realities For Children Charities keeps website information up to date with current events, Affiliate Agencies and specific financial information for the current year.
- Realities For Children Charities posts the governing board of directors on our website and presents the same list in annual press releases.
- Realities For Children Charities posts a link to the IRS determination letter on the website and makes it available in hard copy upon request. Click here to view our IRS Tax Determination Letter
- Realities For Children Charities posts the organization’s annual 990 tax filing on the website for easy access and makes it available in hard copy upon request. 2015 990 Tax Return
- Realities For Children Charities has met all Standards of Charitable accountability as established by the Better Business Bureau Wise Giving Alliance
Realities For Children Inc.
Our final above and beyond effort for Transparency includes Realities For Children Inc. Although this is not a 501(c)3 organization and no donated dollars or items go to this entity, extraordinary efforts have been taken to make certain all business members who do invest with RFC know where their investment in providing this service is going:
- Each year an 18 page Annual Report is provided to the Business Members outlining the benefits of their membership complete with company Profit and Loss statement
- For the past 15 years RFC invites all Business Members to an Annual Meeting to receive both the marketing report and results of services they have helped to underwrite.
- All Membership agreements signed by business members when they join state in paragraph 7 in bold underlined all caps font: 'REALITIES IS A COLORADO NON PROFIT CORPORATION; HOWEVER IT IS NOT AN IRC SECTION 501(c)3. AS A RESULT MEMBERSHIP FEES ARE GENERALLY CONSIDERED A DEDUCTIBLE ADVERTISING BUSINESS EXPENSE NOT A CHARITABLE DONATION DEDUCTION.'
- Realities For Children has legally and voluntarily subjected itself, by converting to non-profit status under Colorado law, to the limitation of not allowing any private party to benefit from the net income or assets upon dissolution. Click here to view a letter from our attorney.
Realities For Children has been a Member of the Better Business Bureau since 1996 and maintains an A+ Rating.