Officers of the AMHE Foundation

The Mission of AMHE Foundation
By Reynold Ducasse MD

It is axiomatic that anyone belonging to an organization ought to, at the very least, be familiar with, and abide by the rules, policies and procedures of that organization. To fail to appreciate the significance and wisdom of this self-evident truth is to flirt with institutional chaos, widespread inefficiency, demoralization, and even the demise of the organization. Needless to say, it is incumbent upon the leadership of an organization to see to it that the membership and interested third parties have at their disposition all the information deemed necessary for the proper understanding and the effective pursuit of the organization’s goals and objectives. If we, at AMHE Foundation, have failed at this task, we apologize for our complacency and beg for your indulgence. We understand, now more than ever, the need to make a greater effort to keep the rank and file of AMHE well informed and we begin by clarifying the mission and the legal foundation of the Foundation, which have been and continue to be the source of many controversies. We will use the Q&A format for the sake of the clarity it brings to the text.

Q: What is AMHE Foundation and how does it differ from AMHE ?

A: AMHE and AMHE Foundation are like father and son, both, members of the same family, united by an umbilical cord, but with a reversal of role, in that the Foundation (the son) is expected to help the father (AMHE) develop and carry out a most important function in his life, namely, his charitable mission. Indeed, AMHE Foundation was created specifically to promote the charitable mission of AMHE and that remains its main objective.

Q: Couldn’t AMHE pursue these objectives itself?
     What is the point of creating another organization ?

A: Actually it could. Nothing prevents it from doing it, but it would be doing so under more difficult and less favorable conditions. According to US Treasury rules and regulations, funds intended for charitable causes must be accounted for independently from other funds as they are regulated under special tax laws. Whenever a private organization wishes to carry out charitable or philanthropic works, it is then always advisable to set up an independent charitable corporation to that end, not only because of the more favorable tax exemptions such corporations enjoy, but also because it makes the accounting and the reckoning with IRS easier should one get audited.

Q: What is the difference between a private non-profit organization and a charity ?
     How do these statutes apply to AMHE and AMHE Foundation?

A: This is a very important question, one that has been, and continues to be the object of much confusion not only among our members, but also within the general population. It is because the law, as written, is indeed very confusing. I will try to make the distinction clear.

Nonprofit 501(c)(3) organizations are essentially divided into two categories: private foundations and public charities.

A private Foundation generally refers to an organization under sections 501(c)(3) and 509(a) of the Internal Revenue Code that receives most of its funding from a single source such as a corporation, a family, or other private groups. A charity is a tax-exempt organization under section 501(c)(3) and 509(a) of the Internal Revenue Code that is “organized and operated exclusively” for religious, scientific, literary or educational purposes, or to foster national or international sport competitions, or for the prevention of cruelty to animals. An additional requirement is that charities must be funded by a cross-section of the public.

Both AMHE and AMHE Foundation are 501(c)(3) non-profit corporations. But, contrary to AMHE Foundation, AMHE is not a public charity. It is instead classified as a private corporation under IRS Code 509(a)(2) by virtue of not being established exclusively for charitable purpose, and the fact that it is not supported by public funds. AMHE Foundation, by contrast, is a charity by virtue of having met the specific requirements for the exclusivity of purpose and for being publicly supported by IRS definition.

To be recognized as a charity under the 501(c)(3) code, an organization must pass two tests: first, it must submit to the IRS a copy of its charter of incorporation and bylaws along with a description of its intended activities, goals and objectives, showing a) that the recipients of goods and services indeed qualify under IRS Code 170(c) i.e. are deserving of taxpayers support; b) that no part of its net earnings will inure in, that is, will flow to the benefit of any individual and c) that it is not disqualified from tax exemption under Code Section 501(c)(3) by reason of lobbying, or participation, or intervention in any political campaign; second, it must be publicly supported, meaning that its financial survival must depend on donations, gifts, bequests, or income from endowments, which is to say, it cannot be funded by the scheduled contributions of interested members (dues and other obligations), or by the proceeds of a business venture. Both the financial statements and the bylaws of all charities are reviewed periodically to insure compliance with the law. AMHE Foundation was recently found to be in compliance, and is, thus, legitimately classified as a charity under IRS code 501(c) (3). Its tax exemption status was renewed in February 2002 and will remain effective until December 2006. Application for renewal of the exemption must be submitted three months prior to the expiration date.

The statement of purpose filed by AMHE Foundation in October 2001 is reproduced below for your perusal. It reads:

AMHE Foundation is a charitable organization whose principal mission, goals and objectives are:

• To contribute to the general welfare of Haitians and their descendants at home and abroad,
• To provide material aid to Haitian communities in times of emergency, or heightened social stress.
• To provide financial assistance in the form of scholarships, grants, or loans to needy students of Haitian ancestry, both at home and abroad,
• To help Haitian scholars build a foundation for the advancement of medical education, and the improvement of public health in Haiti.

Now, compare that with the AMHE objectives as found in the official mission statement published by AMHE. It reads, the goals and objectives of AMHE, the Association of Haitian Physicians Abroad are:

• To help the Haitian Physician in the fulfillment his professional and social life.
• To serve as advocate of Haitian immigrant community in health-related matters.
• To develop professional alliances with local medical societies, or organizations.
• To cultivate professional ties with the Alma mater
• To contribute to the advancement of medicine and the betterment of public health in Haiti.

As you can see, AMHE clearly indicates that one of its objectives is to help the Haitian Physician achieve personal fulfillment. That, says the IRS, the taxpayer cannot and will not subsidy. Personal fulfillment is your own private business. However, as many of the listed activities are not for personal gains or comfort, as they are, for all intent and purpose, charitable in nature pursuant to the spirit and letter of code 501(c)(3), a partial tax-exemption is granted. And therein lies the difference between AMHE and AMHE Foundation. AMHE, as a private corporation has only a partial tax-exemption, and pay taxes on certain incomes, e.g., investment income, whereas AMHE Foundation, a charity, enjoys full tax-exemption and pays no taxes at all, not withstanding the fact that both are equally 501(c)(3) nonprofit corporations. The thing to remember is that a nonprofit organization, or NGO, is not automatically a charity by IRS definition, even if that organization regards itself as philanthropic or charitable. Charity, as beauty, is in the eye of the beholder.

In conclusion, the main advantage of having a charitable Foundation is that, because of its full or 100% tax exemption and deductibility, it creates an incentive to give, a boon for fundraisers, while the corporation itself pays no taxes even on business or investment incomes. Most importantly, however, the vital role of a Foundation lies in that charitable organizations, in general, prefer to cooperate with other charitable organizations in order not to jeopardize their own tax status. Thus, if AMHE were to seek a partnership with other charitable organizations, which is likely in the future, AMHE Foundation would provide the necessary link to make that happen. All told, AMHE Foundation has the potential for opening doors to AMHE. It’s up to AMHE then to take advantage of such opportunities.