Dear Nonprofiteer, If I smell a rat, should I just hold my nose?

Dear Nonprofiteer,

I’m dealing with a tough situation and I could really use some help. I live in a  quiet rural community outside of a large town.  A neighbor moved away many years ago and turned his home into a “non profit” event center, mostly doing a huge wedding business (illegally by the way, as they’ve been asked to cease and desist by the county).

They now seek to legalize and expand their already enormous operation.  The neighboring residents object to this expansion due to noise, traffic and pollution. (They are looking to go to 7 days a week and build additional events structures.)

There is a hearing coming up and in an effort to find more info to bolster our argument, I’ve been looking into their “non profit”.

I discovered that one of the “non profits” they filter money through is a “therapeutic riding center” for disabled children located in another community.  The manager of this non profit is the daughter of the people in question, and they are also the only 2 officers of the non profit.

There is no website, no phone number and the address is an office building.  If you Google any other “therapeutic riding centers” they all have websites and info and photos of beaming disabled kids.

I smell a rat. How do I go about having them looked into by the powers that be?

Signed,

If I Don’t Watch Out For The Neighborhood, Who Will?

Dear Neighborhood Watch,

What you’ve described is such a tangle that it reminds the Nonprofiteer of those What’s Wrong With This Picture? puzzles in which the task is to identify the 47 not-very-hidden mistakes in the drawing.  Or, in other words, a law school exam.  So she’ll take an issue-spotting approach.

Issue #1 is a building-and-zoning problem, namely, that your neighbor is operating an illegal business.  If a cease-and-desist order has been issued and ignored, you should notify the sheriff and/or the county board and ask what is being done to enforce the order.  If you receive no response, send a copy of the letter to the local newspaper.  Voila: instant enforcement.

Issue #2 is another building-and-zoning problem, namely, that your neighbor wishes to expand his/her illegal business.  Obviously he can’t do that unless and until he comes into compliance on his current activities.  Probably in your efforts to compel him to do so, you should also copy the county executive and/or the zoning administrator and/or the Zoning Commission, and point out that his previous failure to comply with the law suggests that he’s not the sort of person to whom one would wish to grant additional license.

So far nothing we’ve discussed has anything to do with nonprofits. You’ve taxed only the Nonprofiteer’s long-rusty powers as a zoning lawyer. No business, whether nonprofit or for-profit, can operate in violation of the building and zoning laws.

But then we come to the nonprofit part, where once again there are two issues.

Nonprofit Issue #1: Can one operate a legitimate nonprofit without a Website?  Merely to ask the question is to answer it: of course.  Perhaps the group is spending all of its money on helping disabled children and none on an office or a Website.  But if parents of disabled children are unable to access the group’s services—because there’s no phone number and letters to the address go unanswered—then there are grounds for concern.  Contact the state agency responsible for the oversight of nonprofits (in some states this is the Attorney General’s Office, in others the Secretary of State’s Office, in still others a separate Charitable Bureau) and explain that you’re unable to access the services of this nonprofit and therefore you wonder if it is in fact pursuing its mission.  Copy the newspaper and again you should see fairly prompt action in the form of at least a preliminary investigation.

Nonprofit Issue #2: Can one operate a legitimate nonprofit in which the sole employee is the child of the sole members of the Board of Directors?  While this is unattractive (to say the least), it’s actually fairly common among small and newly-formed nonprofits.  All the work is done by the founders and their relatives, because they’re the only ones aware of the agency and passionately committed to its mission.  Provided that the group’s bylaws contain the conflict-of-interest policy required by the Internal Revenue Service, employing relatives is not automatically grounds for presuming that the agency is a sham.  On the other hand, the fact raises enough questions that you might include it in any letter you send to the charitable oversight authorities pursuant to Nonprofit Issue #1.

Frankly, though, the real concern here is that your neighbor is disturbing you by operating an unlicensed roadhouse.  Let sleeping nonprofits lie, and focus on shutting down the event space so you can get some sleep yourself.

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2 Responses to “Dear Nonprofiteer, If I smell a rat, should I just hold my nose?”

  1. Nancy Worssam Says:

    What a witty, fun, and expert response to a rather bizarre letter. Well done!

  2. Jeff Rasley Says:

    Smell a rat; if you can afford it, hire a shark. Good advice & prioritization, Kelly.

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