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Earlier this month, FactCheck.org and Politifact confirmed that Black Lives Matter Global Network is not a recognized IRS charity, instead raising their funds through a fiscal sponsor, global nonprofit Thousand Current, which would likely “have a legal obligation to make reasonable efforts to ensure that the funds they receive are spent consistent with 501(c)(3) restrictions.” Some critics of the group suggest that its financial arrangement “blocks full transparency.”
FactCheck.org notes that ActBlue helps to raise funds for Black Lives Matter Global Network by directing donations to Thousand Currents, their fiscal sponsor.
“The partnership between the network (ActBlue) and the nonprofit (formerly the International Development Exchange) was announced in 2016,” the site explains. “The nonprofit organization (Thousand Currents) said it would provide ‘fiduciary oversight, financial management, and other administrative services to BLM.'”
An ActBlue spokesperson, Caleb Cade, confirmed to the fact-checking site that “donations made through ActBlue go to Thousand Currents for Black Lives Matter.”
According to Jenesha de Rivera, director of finance and administration at Thousand Currents, the foundation “has applied to become its own 501(c)(3),” FactCheck.org reported, noting that BLM never returned their request for such a form:
“We asked the Black Lives Matter group for a copy of its Form 1023, which is used to apply for that designation, but didn’t hear back. An IRS spokesperson said copies are only publicly available if the organization is approved for 501(c)(3) status.”
As noted by the fact-checking site, “Fiscal sponsorships are common”:
“Using a fiscal sponsorship arrangement offers a way for a cause to attract donors even when it is not yet recognized as tax-exempt under Internal Revenue Code Section 501(c)(3),” according to the National Council on Nonprofits. “In essence the fiscal sponsor serves as the administrative ‘home’ of the cause. Charitable contributions are given to the fiscal sponsor, which then grants them to support the cause.”
Benjamin Leff, a professor who specializes in nonprofits, told the fact-checking site that based upon his general understanding of fiscal sponsorships, “both ActBlue Charities and Thousand Currents have a legal obligation to make reasonable efforts to ensure that the funds they receive are spent consistent with 501(c)(3) restrictions.”
Judicial Watch’s Tom Fitton, however, suggested Saturday that the fiscal sponsorship route blocks full transparency, particularly when it comes to its partnership with ActBlue.
“Transparency?” he posted, linking to Politifact. “So if you want to make a tax-deductible charitable donation directly to Black Lives Matter, you can’t. You donate to Act Blue Charities. Act Blue Charities sends this money, allegedly, to another charity, Thousand Currents, which runs BLM as a ‘fiscal sponsorship.'”
Transparency? So if you want to make a tax-deductible charitable donation directly to Black Lives Matter, you can't. You donate to Act Blue Charities. Act Blue Charities sends this money, allegedly, to another charity, Thousand Currents, which runs BLM as a "fiscal sponsorship."
— Tom Fitton (@TomFitton) June 20, 2020
According to FactCheck.org, “A Thousand Currents audit for 2019 shows that, as of June 2019, the organization held nearly $3.4 million in net assets for Black Lives Matter. It had released nearly $1.8 million to the group in the last fiscal year.”
The fact-check adds: “The audit also provides a breakdown of how the foundation (referred to as the ‘fiscal project’ under a statement of functional expenses, according to de Rivera) spent that $1.8 million in buckets — including on consultants and salaries.”
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