History Medical Relief Mission Become a Member Opportunities
AMHE inc.
|
Foundation The Mission of AMHE Foundation 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? 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 ? 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.
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:
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.
|
|||||||||||||||||||||||||||