Wednesday, February 25, 2009

When is stealing okay?

As I've said in an earlier post, I sometimes find requests for tzedakah on listservers and try to send them a little something. One of the rules I have is that I will only send money for a cause through a shul or non-profit organization. A) It counts toward my tax deduction that way and b) it tells me that if an organization is behind the cause, chances are, it's legitimate. Non-profit organizations have rules. Individuals don't. Lots of fakers and charlatans out there.

Recently, I saw a posting for a request for tzedakah on a list and I emailed the person collecting and asked her for the name of a shul discretionary fund that was behind the cause. She responded with the name of a shul, let's call it, Congregation Bais Genaivah. I wasn't familiar with the name. She told me that it used to be a real shul in Queens which closed down, and the shul treasurer kept the shul bank account open "just for causes like this." She said "when we collect tzedakah, people like to write out checks to a shul name so that they can deduct it from their taxes."

So basically, she is laundering money through a bank account for a non-existent religious non-profit so that she can spend it for a genuinely charitable cause. At least I hope it's a charitable cause. And why doesn't she go through a legitimate synagogue? I guess she would have to be more accountable to them. And who is to say that this person isn't laundering other, less philanthropically-oriented money as well?

Does she or the former treasurer realize or care that what they are doing is highly illegal, if not unethical? I have a feeling that she doesn't, since she shared it quite openly with me, a total stranger. Of course I'm not making any calls to the IRS, but my head is spinning with the blase attitude behind this.

Next.

I subscribe to something called "Freecycle." To be very clear, it's not a Jewish listserver at all. I've described what Freecycle does here. I recently put out a post that I was looking for a particular object. A woman responded that while she didn't have the object, she called the company that made them, told them that she was on disability and couldn't afford a new one, and said that they sent her one, gratis. She recommended that I do the same. She said she did this with several companies and most all of them sent her stuff once they heard her story. I responded that I wasn't on disability and could in fact afford the object that I was seeking, but just wanted to know if anyone was getting rid of one. She responded by reassuring me that the companies never checked whether her story was true; they just sent her stuff.

I am horrified by this for two reasons. First is that this woman feels so blatantly justified in begging for free things, that she brags about her acquisitions. "Hey, guess what I scored at the soup kitchen today!" Second is that she sees no problem with me defrauding these companies and claiming that I am disabled when I'm not. After all, they don't check.

Next.

I shared some freebie links with a friend of mine recently. Ok, I was bragging. I love getting freebies, legitimate freebies that I acquire by playing by the rules. She countered by saying that she gets free stuff from companies all the time by complaining about their food or products. I asked her if there was really all that much wrong with the stuff she buys that she can complain that much. She said if she doesn't find anything wrong, she'll makes something up. "You should see how much free candy I get for my kids by calling up the company and saying I found a rock in the box!" she bragged. "It's a huge company; they don't care!"

Again, I was horrified. Does she realize how wrong this is?

There's stealing and then there is stealing. People who would never ever think about walking into a store and putting something in their pocket and walking out, will gleefully cheat the hell out of "big" entities, be it Procter & Gamble or the IRS. They will feel entitled and justified in what they are doing because, well, I don't know why. What is this all about? When did this kind of stealing become not wrong?

8 comments:

mistermaggoo said...

I think this issue is worst in NY, in the general community, and the frum community as well. My son's social worker at the Board of Education couldn't believe I wasn't getting some disability payments for my son. I explained that I had significant amount of money invested/in the bank. She seriously told me to hide it in the closet!

arnie draiman said...

tzedakah and stealing do not mix - in any way, shape or form. period. black and white. heavens and earth.

you need to be sure that all tzedakah is given to people and places that use it efficiently and effectively. if you give to a place that has high overhead (anything over 15% for sure), then you are actually stealing from the poor person who is supposed to be the recipient.

see mishlei (proverbs) 22:22 - al tigzol dal kee dal hu - do not steal from a poor person for s/he is poor. and the various comments on it, particularly bamidbar rabba 5:2, which says that by not giving appropriately, you are indeed stealing from a poor person.

happy to discuss this more.

arnie draiman
www.draimanconsulting.com
www.mitzvahheroesfund.org

WebGirl said...

Arnie, I think you missed a little sarcasm here. I'm aware that stealing is wrong, always. What I'm asking is, are these people (who normally would never consider themselves thieves) aware of it too?

MK said...

Once again, you are right on.
I believe this is a fundamental flaw in the current generation, and I see this in across all segments of our society, frum, not frum, Jewish, and non Jewish. The idea that anything is OK so long as you get caught, there is no right and wrong, the so called "moral equivalency".
Western society is crumbling because it lacks of morals.

Anonymous said...

I'm sorry, but you don't know what you're talking about. I just read your post to my accountant and he says what the shul is doing is perfectly legitimate so long as the money donated is actually going to various tzedakas and it's not being kept by the shul's organizers.

Either way, it wouldn't be laundering money. Laundering money is when you take dirty money -- money earned from some type of illegal activity -- and funneling it through a legitimate organization so that it comes out clean on the other end.

WebGirl said...

Anonymous, your accountant is mistaken. When a non-profit organization shuts its doors, it ceases to exist as 501(c)3 entity. Presumably, its board of directors is dissolved along with the institution. So, there are no officers. No officers, no treasurer, no oversight, no audit of their funding. When the organization was dissolved, it was the treasurer's responsibility to close down the bank account. Keeping it open and active is certainly illegal and a violation of their 501(c)3 status with the IRS.

That said, something being illegal does not always mean it's immoral and yes, if they are truly using the money for charitable purposes, then what they are doing is not unethical in that sense.

But who is to say what they are doing with the money? Organizations are subject to oversight and audits. Presumably, donors are writing checks to the organization and then this treasurer withdraws the cash and gives it to the woman who is doing the charity work. But who is making sure that he is only giving it to charity workers for charitable purposes? He could use the money for any reason. I could write a check to his shul, get a tax deduction and he could use the money to pay his mortgage for all I know.

"Laundering money" can mean making illegally obtained money clean or it can mean changing the status of the funds, which is what I meant. If you prefer "channeling" the money through the non-existent 501(c)3, then I could use that. Perhaps "laundering" was too harsh.

Anonymous said...

Webgirl:
1- Shuls are not required to file for 501(c)(3) status.
2- Closing the doors of the physical building is not the same as dissolving an entity.
3- Don't presume anything. If you're going to accuse a shul of some sort of stealing, you need to have facts.

From IRS Form 1023: Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code:

Form 1023 not necessary. The following types of organizations may be considered tax exempt under section 501(c)(3) even if they do not file Form 1023. • Churches, including synagogues, temples, and mosques. [...] Even though the above organizations are not required to file Form 1023 to be tax exempt, these organizations may choose to file Form 1023 in order to receive a determination letter that recognizes their section 501(c)(3) status and specifies whether contributions to them are tax deductible.

WebGirl said...

Anonymous,

I'm not accusing the shul of stealing. I'm saying that a) the shul doesn't exist anymore (fact, told to me by the person organizing the charitable effort) and b) if it doesn't exist, it shouldn't have a bank account.

Though I have absolutely no intention of reporting them, I'm sure the IRS would agree with me.

Like I said, this is certainly illegal. Whether it is unethical is questionable.

You are correct that houses of worship are technically not 501(c)(3)s. I had forgotten that. They do, however, have a specific non-charitable legal status with rules and oversight attached to that status.

No matter how you dance around the issue, if this organization doesn't exist anymore (and it doesn't), it should not have a bank account to be used for whatever purposes one of the signatories thinks is acceptable. Deenah d'malchutah deenah.