Thursday, November 10, 2011

Letters from Egypt: UPDATE on ESMA’s Financing

I’ve held off on this blog waiting for a response; however, I’m ready to tackle other issues so this is my update. If more information is provided, I will post later blogs. But for now…

Cleo was rescued and taken to Hurghada where she is on her way to recovery. Photo: Continental Rescue and Rehab
With all the responses to the blog questioning the Egyptian Society for Mercy to Animals (ESMA) and its donation allocation, I have conducted further research on its US fiscal sponsor Animal Diplomacy. I’ve already highlighted the discrepancies with Animal Diplomacy’s website, ie leaving out pertinent information including founder(s), date established, mission statement or even basic information as to its purpose.

You may look up Animal Diplomacy via a Google search and click on the second listing from PetFinder.com and you’ll find the organization’s creator, Kristen Stilt. The address listed is an apartment building and the phone number seemed to be that of a mobile after it was called. Stilt, an Associate Professor of Law at Northwestern University School of Law and an Associate Professor in the History Department, was named a Carnegie Scholar for her work on the constitutional establishment of Islam in Morocco, Egypt and Malaysia. She is the author of Islamic Law in Action: Authority, Discretion, and Everyday Experiences in Mamluk Egypt (Oxford University Press, 2011). I think that covers her relationship to Egypt/ESMA (all information found from Northwestern University).

I sent an email and Facebook message to Stilt on October 19 inquiring more information about Animal Diplomacy. I have yet to hear a response; however, given her background above – I think it’s completely understandable that she has her hands full.

So I went a step further and contacted the Internal Revenue Service (IRS) to verify that the organization had tax exemption status, in addition to inquiring about financial statements. I also contacted a former employer of mine that is with one of the largest newspapers in Illinois – the state for which Animal Diplomacy has a registered address. My former employer directed me to Guidestar.com to check the current status of the organization. The organization was listed, but no information provided.

And then I heard back from the IRS director of tax exemption, Lois Lerner.

IRS records show that Animal Diplomacy has been exempt under section 501(c)(3) since June 11, 2009.  You can use the IRS website to see for yourself if an organization is exempt under section 501(c)(3) by checking Publication 78 at http://www.irs.gov/charities/article/0,,id=96136,00.html.  You will notice midway down that page the number for our call site, 1-877-829-5500. They also can give you the latest information about an organization's exempt status. 

Like almost all exempt organizations, Animal Diplomacy has an annual filing requirement with the IRS.  If they fail to file the required return or notice for three consecutive years, their exemption will be automatically revoked.  You can learn more about that requirement and also check to see if an organization's exemption has been automatically revoked at http://www.irs.gov/charities/article/0,,id=239696,00.html. Currently, Animal Diplomacy's exemption has not been automatically revoked. 

Section 501(c)(3) organizations are required to disclose certain information to the public, which includes some financial data.  You can learn more about what Animal Diplomacy is required to disclose to you at http://www.irs.gov/charities/article/0,,id=135008,00.html.

I hope you find this information helpful.

Lois G. Lerner
Director of Exempt Organizations

In 2009, Animal Diplomacy claimed that donations were not above $25,000 – which means there are certain forms that do not have to be filled out for the IRS. The past two filings show that donations did not exceed over $50,000.

The information that Animal Diplomacy is required to provide to the general public include:
  • Exemption Application Form 1023/Form 1024
  • Copy of the organization’s annual return (including Form 990-T) for the years of operation

An email was sent on October 26 stating:

Dear Ms. Stilt,

Could you please provide Animal Diplomacy’s exemption application Form 1023/Form 1024 and a copy of the organization’s annual return (including Form 990-T) for the last three years? In addition, do you have a fact sheet or any document explaining the organization's work?

Kind Regards,

It is comforting to know that Stilt has gone through the proper channels as to ensuring the organization is legally registered in the US and I’m not so biased that I won’t report that. What you might find interesting to know is that all PayPal donations going through ESMA are supposed to be funneled through Animal Diplomacy first. This means that although Animal Diplomacy might be properly documenting its donations, to which all go to ESMA, it still leaves up to debate where ESMA is allocating the money and how the Egyptian organization is reporting its figures to Animal Diplomacy. Also, this leads back to the legislation passed in Egypt listed on the previous blog about donations from abroad. And lastly, the donations received in Egypt are usually cash. So are those going unrecorded?

UPDATE:

Stilt did respond to one query from another party saying:

Thank you for your email.  I normally only send such documents to foundations or donors, and the application form itself is not something that either is interested in.  If you are simply wanting to confirm AD’s charitable status, I am happy to provide the IRS EIN number, which is 26-2933425.  And, according to IRS requirements, I have only been obliged to date to file a 990 postcard.

The organization only has a very simple website at this point, but I do hope to improve that in the near future.  The group’s main purpose is to support animal shelters and welfare societies in the Middle East and Egypt in particular.

Please feel free to provide me with more information about your interests if you would like to discuss this further and I would be happy to do so.

Sincerely,
Kristen

Judge for yourself, but while given Stilt’s background, I’m going to throw my weight behind her legitimacy. However, that doesn’t negate my leeriness toward ESMA. It’s suspicious to say the least that an organization will be so evasive about such documentation, yet have no qualms about handing out insults. As with any argument, it’s wise to back up your claims with substantial, factual documentation. And to date, there hasn’t been anything.

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