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What's In A Name?

Guest Blogger: Amy Sinykin, Special Projects & Operations

I’ve been thinking a lot about names recently. Not actual detailed names but the process of naming something. Names are so important. The name of a child can impact his/her entire life. And, just last week, my neighbor and I were discussing how my new (but used) car didn’t fit my personality. It’s gray…like 80% of the other cars in our parking lot. I began to think that I needed to align my car with my personality by giving it a name. That’s some kind of power, the naming process.

Yet, in my ruminating about the naming process, I clearly remembered that names don’t always tell the entire story. My husband and I named our daughter Brooke. It’s a nice name, but our family knows that 99% of why we named her Brooke was because my husband loves to fish for trout, brook trout. Every time we see a brook trout, we are happily and warmly reminded of something we love. (Sometimes it’s, well, trout. And, sometimes it’s our spit-fire little 2 year-old.)

Just yesterday, I realized that this ability to describe who we are through a name can be even more powerful with charities. A very nice, well-intentioned woman called me because she wanted to give to an organization that supported individuals with breast cancer. She had received a call from an organization that sounded perfectly appropriate. But, she took a moment and decided to call the Council for more information. So, I looked up charities using the key word Breast Cancer. (In our research, we found more than 200 organizations with breast cancer as key words.) Can you tell the difference between these two organizations based on their name?

UNITED BREAST CANCER FOUNDATION

NATIONAL BREAST CANCER FOUNDATION, INC.

Upon further research, the caller and I realized that clearly, names don’t always tell the whole story. Let’s look at some of the fairly simple financial information from the Minnesota Attorney General’s database.

UNITED BREAST CANCER FOUNDATION

  • To offer emotional and spiritual support to those battling breast cancer, as well as their family members and friends.
  • 3 Year Average of Charity Expenses: 19.5% Programs, 80.5% Other = (13.9% management + 66.6% fundraising )
  • Total Revenue in 2006: $1,749,251

NATIONAL BREAST CANCER FOUNDATION, INC.

  • To save lives by increasing awareness of breast cancer and by providing funding for free mammograms for needy women
  • 3 Year Average of Charity Expenses: 79.9% Programs, 20.1% Other = (13% management + 7.1% fundraising )
  • Total Revenue 2007: $6,204,686

There is always so much more to a name than just a name. (And, no name yet for my car. Suggestions welcome.)



Polysyllabic post, please read
So I spent part of my lunch cogitating on the revival of the commensurate test.



Gene Takagi's Nonprofit Law Blog covered it very well in a recent post, Re-Embracing the Commensurate Test. At the risk of over-simplifying a decision, the IRS examined the activities and governance of a nonprofit and found that they did not match its exempt purpose and took away their tax exemption. The Chronicle of Philanthropy also covered the issue in this article.



It is a complex decision but I recommend reading the actual IRS letter if you want to learn more.



I am such a nerd that even this seemingly arcane matter made me think of a suggestion: Next time you are reviewing your 990 ask the following questions of your auditor or whoever is responsible for your 990.




  • "How does this document prove that we deserve to be tax-exempt? Do our program descriptions and financial activity match our stated tax exempt purpose? Who benefited most from the way we spent our resources?"



Answering those questions is not as easy as it looks. Studying the new IRS Form 990 is a good place to start learning more. Most people may not know that the commensurate test has risen again. Those who do know about this will point out that the chances of it being applied to your organization are slim.



Every nonprofit has an annual opportunity to establish that its tax exemption is deserved. I would hope we all take it seriously. Maybe, if all 990s were complete and accurate, the commensurate test would fade away again. I would have to find a better reason to use the word commensurate.