An Oct. 2 BDN article about the recent alleged embezzlement of funds from United Mid-Coast Charities gave readers a mistaken impression about UMCC’s operations.
The author of the article tries to dispute UMCC’s longstanding mission statement that 100 percent of the money raised for charitable purposes is distributed to local nonprofit organizations. The reporter looked at UMCC’s publicly available IRS forms to conclude UMCC in fact raised $1 million more during the last 10 years than it allocated to area nonprofit groups.
Here’s where the reporter made his mistake: UMCC accepts donations in one of several categories, specified by the donor. It raises money that is given out to local nonprofits, and it raises money for its endowment funds that pay for its operating costs. People can choose to give to either, and depending on their choice the money is used appropriately. Money in the endowment fund is only used for operating expenses, not for charitable allocations, and vice versa.
The problem is the public IRS forms lump together all donations — for charitable giving and for the endowments — in one line as revenue. The reporter took that amount, looked at how much was given out each year in donations and concluded there was “missing” money — that UMCC took in more money than it gave out to local charities. But that’s not really the case, and the BDN reporter did provide some clarification in a subsequent article.
All the money that was raised for charitable purposes was in fact allocated to local nonprofit organizations. Money raised for UMCC’s endowment funds was used to pay its annual operating costs. This is how UMCC, an all-volunteer organization, has operated throughout its 70-year history.
To figure out why there is a discrepancy on the IRS forms between the money raised and the funds allocated, you would need to look at UMCC’s operating expenses each year. Even then it would be confusing, because the fiscal year doesn’t line up with the tax year and calendar year. Some expenses in one year are reimbursed from the endowment in the following year. Also, there is interest and investment income added to the endowment, which also confuses the picture for us non-accountants.
The point is, all the money raised by UMCC was spent appropriately, as intended by their donors. UMCC has been fully audited each year with no issues. The only “missing” money, as explained in our court suit, is the money Russell Brace, our former board president, allegedly personally collected from donors and hid in his own personal account, of which UMCC had no knowledge.
Last week, UMCC awarded more than $325,000 to 50 service agencies and programs in Knox and Waldo counties, a continuation of its annual allocations to area nonprofits and charities, including the YMCAs, soup kitchens, homeless shelters and safe houses for victims of domestic violence.
Despite the recent events, we are very grateful for the support we have received from the community, and we are more determined than ever to continue our mission of giving to deserving agencies and organizations in the midcoast area.
Steve Crane is president of United Mid-Coast Charities.