EXPOSING THE BLACK LIVES MATTER CHARITY SCAM
How Black Lives Matter Launders Money
The Left’s ActBlue Fraud
BLM Charity Crimes
Bob Bishop, CPA
The New York Times’ recent article ” Racial Justice Groups Flooded With Millions in Donations in Wake of Floyd Death” covers the torrent of donations flowing into the Black Lives Matter movement with ActBlue as a major facilitator.
ActBlue reported in May; it processed a record of $177.9 million in monthly donations, which resulted in a 180% increase over 2019. An unprecedented amount of charitable and political donations thanks to the Black Lives Matter hyper activism.
Charitable giving should focus on redressing the damage done to the victims because of the rioters looting and destroying property. Unfortunately, many hustlers will take advantage of the public’s goodwill to solicit for a fictitious charity, accept donations not intended for its purposes, or promote antisocial behavior.
Take, for example, the crowdfunding platform GoFundMe. A search of for Black Lives Matter found over 5,000 campaigns. Unlike nonprofit charities, online solicitors are not subject to financial reporting requirements. It is doubtful that many will use the funds for legitimate charitable needs.
GoFundMe Abuse Case Study
An excellent example of GoFundMe solicitation abuse is the highly publicized Black Lives Matter Los Angeles. Black Lives Matter Los Angeles newly created GoFundMe account has raised over $2.2 million to date. GoFundMe lists BLM-LA as one of the top fundraisers.
BLM-LA founded in 2017, is a pseudo organization not legally organized as a California corporation. A business search of the California Secretary of State website confirmed that BLM-LA has never filed the required organizational documents. The search of the California Registry of Charitable Trusts has no listing for BLM-LA. BLM-LA is an unlawful charity and subject to taxation.
ActBlue the Three-Headed Hydra
This investigative report elaborates on the New York Times article on ActBlue’s role in the funding of Black Lives Matter. For those unfamiliar with ActBlue, it facilitates Democrats, progressive groups, and far left-leaning nonprofits fundraising using ActBlue’s fundraising platform. It seems straightforward, but the general public is not aware of the concealed complexities, lack of transparency, and possible diversion of funds.
ActBlue brands are ActBlue Charity, ActBlue Civics, and ActBlue PAC, which are supported by ActBlue Technology Services. ActBlue Technology Services provides fundraising software allowing clients to fundraise without building a costly platform. The credit card clearinghouse performs a collection pass-through role to the 501(3)(c) nonprofits, 501(4)(c) social welfare organizations, and 527 political action committees.
Fiscal Sponsorships Using ActBlue Charity
Black Lives Matter Global Network has received substantial national news coverage, and it recently received $6.5 million in donations. The network is an pseudo organization, and according to the IRS, it is not a 501(C)(3) charity, nor is it registered with the California charity registry. Why is it able to receive charitable donations? By using Thousand Currents 501(C)(3) charity through what is known as ‘fiscal sponsorship.’
Fiscal sponsorships funnel money through a “conduit arrangement” between a nonprofit sponsor like Thousand Currents to a pseudo organization or a group of individuals to exploit the IRS tax code. Donors should receive a tax deduction receipt from the fiscal sponsor.
Often, the arrangements lack oversight leaving them highly susceptible to misuse and fraud, and they conceal the beneficiaries. Also, funds cannot be used for political activities. Unfortunately, the IRS has refused to take action regarding fiscal sponsorships even though it recognizes the arrangements have inherent risks. The IRS does not require fiscal sponsors to disclose their conduit arrangements in their 990 tax returns.
Fiscal sponsorship is most appropriate when a national disaster occurs like Hurricane Katrina. It is only logical when there isn’t sufficient time to form a legitimate charity. Fiscal sponsorships like BLMGNF and Thousand Currents are not meant to be a permanent relationship.
Through the BLM Global Network donation page, I made a small donation to trace the disposition of the funds. ActBlue Charity processed the donation. The BLM Global Network was the recipient, and ActBlue Charity, not Thousand Currents, was the tax-exempt organization according to the online receipt. Only through inquiry with ActBlue was it revealed that Thousand Currents was the fiscal sponsor. Thousand Currents 2019 audited financial statements disclose it offers fiscal sponsorship services but does not disclose those arrangements.
Convicted Domestic Terrorist Leads Thousand Currents
The Vice-Chair of the Thousand Currents’ Board of Directors is Susan Rosenberg. Rosenberg, a member of the Weather Underground and Bill Ayers associate, was sentenced to 58 years in prison on weapons and explosives charges. She was suspected but never charged in the 1981 Brinks robbery that leads to the death of three peace officers. Eric Holder, Deputy Attorney General, orchestrated Rosenberg’s pardon signed by Bill Clinton on his last day as President.
With the recent publicity about Thousand Current’s involvement in BLM, the organization has wiped its Board of Directors from its website to hide Rosenberg’s involvement. Thanks to the Wayback Machine, Thousand Current’s cannot hide her role.
Social Welfare Organizations Using ActBlue Civics
A Social welfare organization 501(c)(4) is a nonprofit operated exclusively to promote social welfare. Even though donations are not tax-deductible, these organizations must file annual IRS 990 tax returns. All too often, they are engaged in political activism. Intervening in political campaigns is prohibited. They cannot use fiscal sponsorships.
One excellent example of a civic organization relying on ActBlue’s fundraising platform is the rapidly mushrooming Indivisible Project. The primary organization’s focus is anti-Trump. Because of its extreme political activism, it may violate IRS statutes. ActBlue appears to be an enabler for anarchist organizations.
Political Action Committees Using ActBlue PAC
One of the larger PACs using ActBlue Civics is the Color of Change that solicits donations for far left-wing candidates for social justice causes. Federal Election Commission May’s report that the PAC has received an astonishing $2.2 million in individual contributions. Color of Change is a hybrid PAC with all the benefits of a regular PAC with the ability to be a super PAC giving it more considerable influence.
ActBlue’s 2018 3X Summary Report (mid-term election cycle) annual collections were $87.8 million. The year-to-date collections for April 2020 are $60.1 million, an eye-popping amount collected from individuals making small contributors. Annualized 2020 collections are estimated to be around $180.3 million. It’s not pouring money; it’s a monetary waterfall that will have a significant influence on this fall’s elections.
Public support of those victimized by the recent riots is much more effective and meaningful than faceless and ineffective government bureaucracies. However, before donating to a charity, donors should check with the IRS website and their state’s charity registry. Influence Watch is an excellent source that provides fact-based, accurate descriptions of charities, civics, and PACs. Popular watchdogs ProPublica and Guidestar offer excellent analysis and downloadable tax returns. Donors should avoid charitable causes relying on fiscal sponsorships due to their lack of transparency.
Donors need to trust their instincts and avoid impulsive giving.
Mr. Robert A. Bishop is a retired CPA.