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A local organization may soon be under investigation for failing to obtain state permission to hold a raffle and for not being registered with the state as a not-for-profit organization.
The Dutch and Ford Foundation, which claims to be not-for-profit, never registered with the Indiana Gaming Commission before holding a raffle last month, said Cheryl Denk, director of media relations for the commission.
A foundation must qualify with the state before holding a charity gaming event, Denk said. It does not qualify with the state until it is an official not-for-profit foundation.
That means, she said, the foundation's application to the IRS to have a tax-exempt designation - called a 501(c)3 - must have been approved before the event.
According to the Indiana Gaming Commission and the U.S. Internal Revenue Service, as of Thursday, the Dutch and Ford Foundation has not yet been approved as a 501(c)3 foundation. Foundation personnel said they applied for the designation in March. Both the IGC and the IRS say they have no record of the foundation.
If the foundation is not registered with the state as a not-for-profit, Denk said, then "everything they raise will be considered unrelated business income and they'll have to pay tax on it as income."
She also said that any donations to the foundation would not be considered tax deductible.
When asked if he was aware that the foundation is required by law to register with the state before any games of chance can be held, Ford Olinger, the foundation director, said Thursday, "I've left that up to the attorneys and the accountants, and they've told me everything I'm doing is perfectly legal."
He refused to furnish the name of his attorney, saying, "They'll get in touch with you."
Denk also said a not-for-profit organization must exist for five years before it can hold a charity gaming event, such as a raffle. The only exception would be for an organization that falls under the umbrella of another group, such as a local Boy Scout troop that is part of Boy Scouts of America.
Raffles fall under the jurisdiction of the Indiana Gaming Commission, Denk said, as a game of chance that depends on "the luck of the draw." Door prizes also are considered charity gaming activities.
Fund-raising events, such as the Celebrity Pro-Am Charity Classic, don't qualify as the "luck of the draw," she said, and therefore aren't considered gaming events. Organizers must register with the IGC as a not-for-profit organization, she said, and the Dutch and Ford Foundation did not register.
"We have no record of them as a not-for-profit," she said, "nor therefore can they be qualified to conduct charity gaming activities in the state of Indiana."
Staci Schneider, press secretary for the Indiana Attorney General's office, said Thursday that the consumer protection division had received no complaints about the Dutch and Ford Foundation, but that the foundation should have registered before conducting any fund-raising activities.
She also said the consumer protection division would probably check into the situation more closely.
"They don't get a lot of these cases," she said, "but I'm certain they would investigate."
Denk said her office cannot comment on individual cases, but "we investigate any information we receive. ... If we audit and they are in violation, they are subject to unrelated business expense taxes."
Earlier this week Olinger said the foundation had donated an "E-Car" - a motorized vehicle used by disabled people - to the Noon Optimist Club, which would in turn donate it to a needy child.
The E-Car, Olinger said, is worth about $7,500.
He also said the foundation had asked organizations that work with handicapped children to submit grant requests if they wanted to receive any of the proceeds from the Celebrity Pro-Am Classic. The foundation received three requests, he said, one of which was the Noon Optimists.
Steve Martin, president of the Noon Optimists, said Olinger attended a recent meeting and passed out fliers on the E-Car. The Optimists have not officially accepted it.
The E-Car was donated to the Dutch and Ford Foundation by the E-Car Corp. of Gaithersburg, Md.
Schneider said anyone with questions or concerns about the foundation and the Celebrity Pro-Am Classic should call the consumer protection hotline at 800-382-5516.
