Since questions first emerged about the way the Red Cross raised money after 9-11, I’ve used my position on the Senate committee responsible for tax policy and oversight to investigate abuses of the laws that govern the tax-exempt sector and to advocate legislative reforms.  Most of the tax laws in this area haven’t changed much in 40 years despite massive growth in size and complexity of the sector.  I’ve scrutinized the way charitable hospitals account for charity care, whether university endowments are used to make higher education more affordable, if charities like the Red Cross and United Way honor the intent of donations in the way that donors expect, and how tax-exempt laws have been misused as tax shelters or for questionable activities such as self-dealing by foundations and wealthy individuals. 

My efforts have resulted in legislation and increased transparency.  The Pension Protection Act of 2006 shut down abusive transactions involving charities.  The pending Finance Committee health care bill contains reforms I’ve sought to hold charitable hospitals accountable for providing charity health care to the uninsured.  And at my urging, the Internal Revenue Service updated the publicly available tax returns that charities file.  This revision provides donors more information about a charity’s operations than ever before. 

There is more to be done. This month, I released a detailed review about the use of tax-exempt organizations by ACORN, which stands for the Association of Community Organizations for Reform Now.  The analysis reveals a vast number of charitable organizations set up to funnel money to ACORN and raises questions about whether the entities advanced the charitable mission of ACORN to help poor people get housing, or if they were just part of a shell game.  Despite the fact that ACORN set up 42 tax-exempt entities and even housed 31 of them at the same address in New Orleans, ACORN told me three times in 2006 and 2007 that it did not operate as a tax-exempt entity.  Given that public dollars are involved, the public deserves a full accounting of ACORN’s conglomerate of tax-exempt organizations.

Public confidence in the integrity of the way charities and nonprofits operate is fundamentally important to the continued generous support that has made so much good work possible, which is why I continue to work to strengthen these entities through oversight and other necessary changes.