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Friday, November 8, 2019

“TRANSPARENCY” BEGINS AT HOME: Compliance Stumbles Mar Launch Of Newly-Formed Michigan Domestic Nonprofit Corporation, TCAPS Transparency In Education; Group Solicited Donations Online Without Proper State Authorization; Michigan Attorney General's Charitable Trust Section Has No Record Of Group's Registration, Or Request For Exemption

Described by The Ticker as a “501(c)(3) nonprofit organization”, TCAPS Transparency lacks EIN number disclosure on its site. 

November 12 Update: new donate function live; group still lacks EIN, Michigan Attorney General Charitable Trust registration

October 27, 2019 Screen Grab

It appears the effort to recall four members of the Traverse City Public Schools Board of Education is off to a bumpy start, including a previously-undisclosed online cash grab.

While official State of Michigan records, available online, reveal an application was submitted October 23, 2019, on behalf of “TCAPS Transparency In Education” (endorsed later that day by the Deparment of Licensing and Regulatory Affairs), as of this morning, the Michigan Attorney General's Charitable Trust Section has no record of a document submission (or a pending request) in its database, required before a Michigan nonprofit is allowed to even solicit donations. 

The domain name, tcapstransparency.org, was registered on October 24, and the site was live and soliciting donations three days later.

On October 28, in an effort to seek answers, I emailed the Registered Agent for the nonprofit, and posed these questions:

(1) The site is actively soliciting donations for the group, but as of this morning, the Michigan Attorney General’s Charitable Trust Section has no record of document submissions required before a nonprofit is allowed to solicit donations under the name “TCAPS Transparency In Education”. 

Have you, as the nonprofit’s Registered Agent, or another representative of the nonprofit, filed either a “Initial Solicitation Form” or a “Request For Exemption” form? 

If so, when were they filed? 

If not, when will they be filed? 

(2) Have you, as the Registered Agent, or another representative of the nonprofit, filed an application with the IRS for an employee registration number (EIN) for the nonprofit? 

If so, please provide the number issued by the IRS. 

If not, when will an application be filed? 

In a response sent later that day, the representative stated that TCAPS Transparency “is newly established and we are building the framework at the moment. We will certainly pass this email on to our attorney to make sure we are in full compliance, something we care greatly about.”

After trading several more emails with the group's representative, I received an email on October 31, stating as to “the compliance stuff I’m told that it is and we are waiting for docs to be received from state/federal folks.”

In Michigan, nonprofits are licensed by the Michigan Attorney General and must comply and register under the Charitable Solicitation Act. 

If unregistered, an organization and those involved in fundraising activities could face fines and criminal punishment under amendments to the Act that were approved in December 2010 and which took effect on March 30, 2011.

Here are the appropriate steps that must be undertaken before an organization begins to solicit money on behalf of a Michigan nonprofit:

-File the Michigan nonprofit articles of incorporation 
-Get a Federal EIN from the IRS 
-Adopt the nonprofit’s bylaws 
-Apply for federal and/or state licenses 
-Open a bank account for your Michigan nonprofit 
-Later, submit the annual report 

In all cases, the counties, cities and townships involved in the conduct of the recall election must bear the costs of the election. The costs are not subject to reimbursement by the State of Michigan.

And while the current online home of “TCAPS Transparency In Education” does not yet include an active donation function, the former site did for several days.

Aside from not being tax deductible, will we ever know how much money was taken in?

And just where did that money go?

Certainly not my definition of (ahem) transparency.

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