Injured Police Officers Fund, the legitimate Las Vegas-based charity that funnels financial aid to families of fallen cops in southern Nevada, has taken a major step toward transparency and accountability. In its latest public IRS tax return filing, IPOF revealed for the first time the total amount of contributions received on condition the money quickly went to specifically designated officers. As it turns out, that amount dwarfed the total sum listed as being distributed out of general contributions.
The fuller picture had the beneficial impact of significantly improving a key measure of financial efficiency for IPOF, a potential draw for future donors. Moreover, the new data will help distinguish IPOF from the many illegitimate law enforcement-themed organizations that fraudulently–fraudulently, I say!–seek funds from the Nevada public (and elsewhere). Here in Las Vegas, at least, these outfits have been greatly aided by regulators who don’t enforce disclosure and other laws already on the books.
IPOF’s revelation came after several years of hectoring by me from the New To Las Vegas world headquarters about the charity’s seemingly poor financial efficiency in one important measure and a general lack of transparency. IPOF previously had pleaded individual officer privacy in not revealing the total amount of designated contributions or distributions (the numbers are the same). To me–a national journalist who has been writing about charities, their filings and financial efficiencies for decades–a specific section on the IRS tax return mandated disclosure of this very information. I perceived that the donating public was not seeing the entire picture.
Besides posting here about these issues concerning IPOF, I first pressed these matters more than two years in an interview with Chelsea Stuenkel, IPOF’s then-new president and an officer (sergeant then, lieutenant now) with the Nevada Department of Public Safety. It took a little while, but, as she recently wrote me, “We have in fact changed the way we are reporting specific donations this year after our discussion.”
So here’s the skinny for calendar year 2022 (charity tax filings are outrageously slow, and IPOF’s return for 2023 likely won’t be available for at least another six months). IPOF made grants of $305,205 to the families of 11 officers, two of who died. Of that amount, $228,794–or 75%–consisted of amounts paid upon the specific request of the donor to a specific officer. This is a category never before revealed publicly by IPOF, and is somewhat buried on page 34 of the 36-page tax return. That amount was three times more than the $74,411 paid to officer families out of general non-designated donations and investment returns, and reported more prominently in another section of the tax return.
Counting the designated donations, IPOF received $954,546 in gifts. After all expenses, IPOF added for future use nearly $600,000 to its net assets, which at year’s end totaled $2.7 million.
Allow me to explain the significance of how charities manage their resources. One measure of nonprofit evaluation is the charitable commitment ratio, or the percent of total expenditures paid in direct furtherance of the stated mission. IPOF listed its mission on the tax return’s first page (as well as in public pronouncements) as to “provide financial assistance to families of officers injured or killed in the line of duty.” Accounting rules allow certain but not all overhead to be included in program support, as the mission is also known. Without the designated donations, IPOF’s charitable commitment ratio was 73%. But inclusion of those funds raised it to 85%, since all the non-direct-mission expenses were already counted.
I can tell you that an 85% charitable commitment ratio is pretty good in the world of nonprofits. I have all of the IPOF’s tax returns back to 2001, and the weighted average ratio for that period calculated from the disclosed information was just 51%, with one year as low as 5%. The Better Business Bureau Wise Giving Alliance, a leading national charity watchdog, puts the minimum acceptable charitable commitment ratio at 65%.
But it turns out IPOF was hurting itself as a credible entity by not reporting any designated donations for most of that period. Indeed, including that amount, 2022’s 85% was IPOF’s highest charitable commitment ratio since 2001.
And that pairs well with another big metric of charitable evaluation, the fundraising efficiency ratio. This is the percent of donations remaining after deduction of fundraising expenses. For 2022, IPOF’s ratio was 100%. The charity spent nothing on fundraising; it can’t get any more efficient than that. Throughout its history back to 2001, IPOF has excelled at this efficiency, which I calculate at 98%. This means only two cents of every dollar raised went to raising it. Again, the BBB says any ratio above 65% is okay.
There’s a simple reason for this super-efficiency. IPOF does not use direct mail solicitation, which is expensive. The charity also does not hire outside telemarketing fundraising consultants, who are notorious in the world of law-enforcement-themed solicitation for holding on to most or even all of what is raised. Instead, IPOF relies on a few large donors, net proceeds from several annual fundraisers, and contributions to IPOF that come in after a police death or serious injury gets media attention. Nevada news accounts often recommend IPOF as “the only approved donation point” for designated gifts.
IPOF also has an unpaid board of cops: mainly sworn officers representing nearly a dozen law enforcement agencies operating in southern Nevada. Most notable is the Las Vegas Metropolitan Police Department.
If you live in Nevada–and even if you don’t–you’re probably plagued by telemarketing cold-calls from what seem to be law-enforcement causes but are actually political action committees masquerading as worthy charities. I call each a “faux charity,” as almost all of the money raised goes to fundraising and overhead and almost none to the stated mission, often making political contributions to sympathetic candidates.
A 2021 Nevada law that the Nevada Secretary of State’s Office, aided and abetted by the Nevada Attorney General’s Office, won’t enforce bars such entities from soliciting in Nevada without first registering and making financial filings. Since then, I have yet to find any properly registered faux charities among the dozens that have called me (and I look each time). There also, of course, are general laws in Nevada protecting consumers and criminalizing fraud, but again, regulators are MIA. To read my previous coverage on this subject, simply type the word “faux” into the nearby search box and recoil in horror at the more than two dozen hits.
IPOF, which doesn’t even solicit, is fully registered in Nevada and most definitely isn’t a faux charity.
Founded in 1982, IPOF began in response to uninsured expenses incurred by a cop shot in the head during a traffic stop, and over time has grown. IPOF now pays a death benefit of $25,000 for line-of-duty deaths and, in non-fatal cases, up to $10,000 of out-of-pocket costs like child care during a recovery period. But it is the charity’s role in husbanding designated contributions without taking a haircut for overhead that might be its most important function.
I still have a few issues to raise. IPOF every year has sent me its tax return upon my request (as IRS rules require), but the charity still doesn’t post the return on its website, which many reputable nonprofits now do. While the IRS recommends this course of action, this is not required but certainly would enhance transparency. In my view, more data on designated contributions should be included in the return, and consideration given to amending previous-year tax returns to include this information.
IPOF is a tax-exempt 501(c)(3) charity, which means contributions are potentially tax-deductible (unlike anything sent to a faux charity PAC, or any PAC, for that matter). But from my reading of federal tax law (and I hold a law degree as well as a Chartered Financial Analyst charter), it is far from clear that a contribution to IPOF earmarked for a specific individual would be tax-deductible by the donor. When I inquired about this, Stuenkel and IPOF accountants punted, saying IPOF sends out donation acknowledgment receipts upon request but that it would be up to the donor to figure out the tax deductibility ramnifications.
However, in the scheme of things these are small objections. In a state not noted for informational openness in matters of public interest, IPOF is moving in the right direction. Right on, I say!