Occupy Wall Street, Fiscal Sponsorships & the Alliance for Global Justice

By Chuck Kaufman (AFGJ National Co-Coordinator)

The Alliance for Global Justice (AfGJ) and its predecessor and founder, the Nicaragua Network, have been well-known grassroots organizations within the Central and Latin America solidarity movement and the anti-corporate globalization movement for over three decades. For probably 25 years we’ve used our 501(c)(3) non-profit tax status to fiscally sponsor projects that do not have their own tax-exempt status. These started mostly as Nicaragua humanitarian aid projects to build a school, raise money for scholarships, etc. In the late 1990s we were approached by United Students Against Sweatshops to become their fiscal sponsor and since then we have added a few projects a year which have approached us. We see this as very much a part of our organization’s mission to “achieve social change and economic justice by helping to build a stronger more unified grassroots movement.” It’s not our main work. We have our own programs that work to change US policies – military, trade, labor, and human rights – primarily toward Latin America, and which act in solidarity with popular movements and progressive governments.

Our fiscal sponsorship of the Occupy Wall Street action has brought attention from the press and public that we haven’t seen since the 1980s when we were the lead organization fighting against Reagan’s proxy war against the Sandinista government in Nicaragua, known as the Contra War. Even our fiscal sponsorship and central role in planning the April 2000 IMF/World Bank demonstration, arguably the high water mark of the anti-corporate globalization movement, did not generate quite the focus on AfGJ that Occupy Wall Street has.

So what is the role of the Alliance for Global Justice in the Occupy Wall Street movement? First of all, let’s be clear that we cannot take any credit for thinking it up or putting the thought into action. I could only wish that we had had the vision and the courage to be the spark that ignited the hope that has swept the nation like a wildfire over the past short weeks. All credit goes to the Wall Street occupiers. One thing that especially impressed me when I traveled to New York to meet with their Finance Committee was that they too understand their place in the movement. When I complimented them on giving hope to a demoralized movement, one of them quickly and quite properly corrected me. He pointed out that they took their action thanks to inspiration from the courageous people of Tunisia and Egypt and the brave union members of Wisconsin.

So what does the Alliance for Global Justice do for Occupy Wall Street (OWS)? Essentially we collect and process their donations and pass the money on to them as a project of the AfGJ. In IRS parlance we take “responsibility for all financial and programmatic matters” of OWS. We are responsible to include their financial reporting as part of our own when we file our annual tax return, which for non-profits is called a form 990. We are accountable legally and financially to prove that all expenditures by OWS are within the IRS’s tax-exempt rules. If the IRS audits us, we will have to show supporting evidence of the numbers we report. Occupy Wall Street’s obligation to us is to provide the accounting and receipts we’ll need for the IRS and to not jeopardize our tax-exempt status through any actions of theirs.

With all of our fiscally sponsored projects we are responsible for them both financially and programmatically. However, our fiscal projects act autonomously with their own decision-making structures. We do not interfere or participate in those structures except in the, so far, unknown event that one of our projects would do something to jeopardize our tax-exempt status. Under our fiscal sponsorship contract, we have the right to tell them to cease and desist if that should happen and to cancel the contract if they refuse.

What do OWS and our other fiscally sponsored projects get out of the relationship? They get additional accounting and administrative staff support and advice. They get to offer their donors tax-deductions for their donations. They get online donation capacity and staff to process and deposit donation checks as well as to send the IRS-required form for donations of $250 or more. They don’t have to worry about IRS forms and deadlines. They are covered by our liability insurance. If they have paid staff, which OWS does not, we handle their payroll and enroll them in our group health policy. For an organization like United Students Against Sweatshops, which rotates an entirely new staff in every couple of years, we provide continuity and organizational memory.

Many supporters ask if AFGJ takes a portion of the donations. We charge a relatively low rate for fiscal sponsorship, at a flat 7% of all money that passes through our channels for processing. There are no additional fees. For credit card donations, we pay around 3% of that to our online donation processor and we cover all additional banking fees. We pay an accountant to keep the books and process the charges and checks, hiring part-time help when the load is heavy. We also pay a CPA to complete our IRS form 990. So, while we do support ourselves in part through our fiscal sponsees, we use a substantial amount of these funds to cover the administrative tasks we provide for them. Moreover, as mentioned above, we are taking on substantial responsibility and risk through these partnerships.

To some extent each of our geographically dispersed staff of five has been diverted from their own program work to handle the incredible volume of support for Occupy Wall Street. I personally came East to DC from my home of over a year in Tucson, AZ to participate in the occupation of Freedom Plaza since DC had been my home for 38 years. Instead, after a few days I’ve found myself in our DC office still working out the many aspects and complications of sponsoring such a well-known group. While some people get to serve on the front lines of the struggle for economic justice and democracy, others of us serve the invisible roles that help to make the whole thing work. That in itself is exhilarating at the present moment when, for the first time in many long years, change seems possible. The Alliance for Global Justice is proud of the role that it is able to play to build a strong and successful movement for transformational change.