Strictly speaking, this is a tale from Big Lake, not Wasilla, but from anywhere outside of Mat-Su, it’s more or less the same place.
The Big Lake Chamber of Commerce let Donna Turner, owner of a wedding rental shop, serve as treasurer for a reported eight years, apparently without audit or bonding. Turner embezzled some $40,000 from the Big Lake Chamber of Commerce. She copped a plea to one count of second degree theft, agreed to pay restitution of some $29,000 and faces 90 days in the slammer. She will have three years to make restitution, which will be a challenge for some who is unemployed, a convicted felon and wants to do it renting tuxedoes. In Wasilla. With the IRS knocking on her door, looking for the taxes, interest and penalties on the extra $29,000 Turner gave herself. WC hopes no one is holding their breath.
WC doesn’t want to blame the victim here, but nine times out of ten, for a business – including a nonprofit business – an embezzlement is a self-inflicted wound. It’s a failure of risk management.
If a nonprofit has enough money that you’d object if it was stolen, then get an audit, or at least a financial review, every couple of years. Separate the persons who can deposit money from the persons who can withdraw money, and make the person who balances the bank statements someone else entirely. Bond the persons who handle money so if there is a theft, you’ve got a source for repayment. Do some due diligence on the folks you select or hire. A dissolved limited liability company, no business license, and lots of personal stress. Those are all red flags.
And while WC is still on his high horse, the Anchorage Dispatch News reports:
The Big Lake Chamber of Commerce discovered the theft of more than $25,000 in 2013, according to Linley. That’s when the IRS notified the chamber that it was revoking its 501(c)(3) nonprofit tax-exempt status — essential to snaring grant money — because its financial records were in disarray.
There is no way that a Chamber of Commerce can quality as a §501(c)(3) charitable organization. There’s a separate subsection of the Internal Revenue Code for business leagues like the Chamber, §501(c)(6). The difference is that contributions to a (c)(3) are deductible as charitable contributions; payments to a (c)(6) are not. So either the IRS revokes the Big Lake Chamber’s §501(c)(3) status because it never should have had it in the first place, or the Big Lake Chamber’s records were so truly dreadful that it didn’t meet the extremely loose standards for a business league.
WC hopes the Big Lake Chamber of Commerce gets some training in risk management before it starts collecting other peoples’ money again. And some competent tax advice.