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Questions, concerns surround Friends of Council on Aging

October 16, 2011

Updated 10/16/11 8:19 PM

The private non-profit organization trying to raise money to build a new senior center hasn’t been keeping up with government regulatory requirements and hasn’t disclosed its financial data in years. The organization also has an increasingly differing agenda from the town-operated agency it was initially formed to support.

The Friends of the Walpole Council on Aging is a private group formed over 30 years ago to assist the distinctly separate town-operated Council on Aging in providing services to local seniors. Because the Friends group is private, they are not under the direct oversight of the town, unlike the Council itself.

As a non-profit corporation incorporated in Massachusetts, the Friends are required to file annual reports with the Secretary of the Commonwealth’s office. But according to a state online database, the Friends have not filed an annual report with the state since 2004, as required. A spokesperson for the Secretary’s office confirmed the database is up to date and said that there are only limited exceptions to the filing rule, none of which the Friends would seem to qualify for.

According to the spokesperson, an organization’s failure to file reports doesn’t necessarily carry any significant punishment. But as an official status, the Friends are “not in good standing.”

Additionally, the Friends haven’t filed any federally-mandated non-profit tax returns with the IRS for several years. According to GuideStar USA, an information service about U.S. non-profits, the Friends last filed a tax return in 2003.

Under federal law, most non-profit 501(c)(3) organizations across the country, like the Friends, are required to file annual information returns or notices, even though they are exempt from paying taxes. Failing to file for three years in a row results in an automatic revocation of their tax-exempt status.

IRS Spokeswoman Peggy Riley said the Friends lost their tax-exempt status in May 2010. As of June 2011, donors lost their ability to deduct Friends donations from their taxes, although any donations sent before June can still be deducted. “They can still continue to operate, but they must tell taxpayers that their donations are no longer tax-deductible,” Riley said.

The IRS website states that organizations are sent a letter to notify them if their status is being revoked, and Riley said the agency has engaged in a publicity and outreach campaign to make sure organizations follow the rules. Some organizations aren’t aware of the law’s new filing requirements, according to the IRS website.

In fact, the Friends group is only one of about a dozen Walpole non-profits that lost its tax-exempt status recently, including the American Legion, the Friends of St. Patrick, and the East Walpole Civic Association. Nationally, about 275,000 non-profits lost their tax-exempt status this year, the majority of which the IRS believes to be defunct.

The Friends and any other non-profits that lose their tax-exempt status are allowed to re-apply to get their status reinstated. Otherwise there is a possibility they would eventually have to file with the IRS as a business and pay taxes on the income received, according to Riley.

Mary Rich of Swenson Circle, who is listed as the Friends’ Treasurer in their 2003 return, said she was unaware of the group’s IRS issue when reached at her home by phone. “No I don’t know anything about that,” she said, before abruptly hanging up on a reporter.

Besides apparently raising money for a new building, the Friends help coordinate and fund programs at the senior center. Their 2003 tax return shows that the Friends spent about $23,000 that year on senior center renovations, senior events and trips and various administrative supplies for the Council on Aging. Total assets were almost $150,000 from various investments while total revenue generated was almost $20,000, mainly from program fees.

But because they haven’t filed IRS returns in years, the group’s current financial data essentially remains shrouded in mystery.

The Friends also aren’t registered with the State Attorney General’s office as a public charity. Harry Pierre, Deputy Press Secretary for the Attorney General, said the Friends were sent a letter reminding them to get registered, after a reporter inquired about it recently. “As of yet we haven’t received a response from this group to our letter, but they do have until the end of the month to respond,” he said.

Beth Pelick, who is supposedly the Friends Vice President, said the group is generally aware of the non-compliance issues. Pelick also said Rich isn’t their Treasurer anymore, but didn’t say who was. She didn’t want to speak officially to a reporter without talking to the rest of the group first. She did not return a phone call from a reporter about a week-and-a-half later asking whether she had conferred with the group yet.

Susan Maguire, reported to be president of the Friends, was contacted by phone, but referred comment to others.

The Friends group has also publicly shown in recent years it differs in goals with the Council itself, the agency they were initially formed to support. For example, the Friends and the Council publicly disagree about where to put a new Senior Center. Last year, The Walpole Times reported that Friends members were pushing for a building downtown, while the Council ruled that proposal out.

The split between the two organizations, and the evident lack of financial accountability at the Friends, became apparent at the September 20 Board of Selectmen’s meeting. What was supposed to be a routine discussion about appointments to the Council turned into an extensive conversation about the ongoing conflicts between the two groups. Council member Lloyd Smith told Selectmen that his group, not the Friends, wants to be the recipient of senior center building donations because of what is perceived to be the Friends’ lack of oversight. “We can’t get any accounting from them,” Smith said.

Selectman Nancy Mackenzie rejected Smith’s concerns, and said because the Council is a governmental board it isn’t set up to raise money on its own. The Friends are intended to be the Council’s money-raising arm, she noted. “They do your private fundraising,” she said.

Mackenzie said Town Administrator Michael Boynton had spoken with members of the Friends within the past year to help resolve the organizations’ differences and to look at their financial documents. “They’re in compliance with all the things they need to be,” Mackenzie said.

“You can be sure that whatever it is that [the Friends] need to file, as far as their reporting goes and who they report to, they’ve done it,” Mackenzie said. Smith disagreed, saying the Attorney General’s office had confirmed to him they weren’t registered as they were required to be.

Selectmen also expressed concern over the split and urged reconciliation. “It’s mind-boggling to me how you can have two entities with the same goal of helping our seniors in this town that are just philosophically so apart,” Selectman Chairman Eric Kraus said.

“We don’t understand it either,” Smith responded.

By the end of the meeting, no issues had been officially resolved. Selectmen did, however, suggest that a better fundraising system for a new senior center should be put in place.

The Master Plan Implementation Committee recently released a report recommending that a senior center be sited on town-owned land next to the VFW on Robbins Road. But the financial questions surrounding the Friends and the division between it and the Council could hamper efforts to move that project forward.

To be continued…

180 will provide updates about the Friends later on.

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