Southern Poverty Law Center Transferred Millions to Offshore Accounts - Unprecedented for a Non-Profit of Its Type

"Your support is critical for our accounts in the Cayman Islands"

The Washington Free Beacon just published a fascinating story on the Southern Poverty Law Center (SPLC), based on an analysis of its 2015 tax returns and other financial records.

The SPLC is the advocacy organization that publishes a "hate map" and list of "hate groups" across the United States. Recently it came under fire for adding mainstream conservative and Christian family organizations to its map, along with the Ku Klux Klan, skin head groups and black supremacy organizations.

The traditionalist Catholic publication The Remnant has long been on the hate map. I assume this is because of alleged anti-semitism - Catholics, and now traditionalist Catholics, have always had a mixed relationship with Judaism - though calling The Remnant anti-semitic is of course a slander.

In my view, the SPLC is itself an anti-Christian hate group. But that's not the point of today's post.

In their article, the Free Beacon reported that the SPLC has transferred millions of dollars in assets to foreign accounts based in the Cayman Islands, British Virgin Islands and Bermuda.

This was deemed "extremely unusual," "a red flag" and "unethical" by experts on non-profits:

Tax experts expressed confusion when being told of the transfer.

"I've never known a US-based nonprofit dealing in human rights or social services to have any foreign bank accounts," said Amy Sterling Casil, CEO of Pacific Human Capital, a California-based nonprofit consulting firm. "My impression based on prior interactions is that they have a small, modestly paid staff, and were regarded by most in the industry as frugal and reliable. I am stunned to learn of transfers of millions to offshore bank accounts. It is a huge red flag and would have been completely unacceptable to any wealthy, responsible, experienced board member who was committed to a charitable mission who I ever worked with."

"It is unethical for any US-based charity to invest large sums of money overseas," said Casil. "I know of no legitimate reason for any US-based nonprofit to put money in overseas, unregulated bank accounts."

"It seems extremely unusual for a ‘501(c)(3)' concentrating upon reducing poverty in the American South to have multiple bank accounts in tax haven nations," Charles Ortel, a former Wall Street analyst and financial advisor who helped uncover a 2009 financial scandal at General Electric, told the Free Beacon.

Read the rest here.

There is much more information in the article, much of it embarrassing, on SPLC finances. Essentially the SPLC has an annual budget of $50+ million and assets of $300+ million. It has multiple employees with salaries in the $150,000 to $350,000 range.

The organization engages in political advocacy - publishing articles on its website and writing press releases on anything from the Charlottesville protests to the resignation of Sebastian Gorka. It creates "anti-bias" resources for schools and educators through its "Teaching Tolerance" program. It engages in legal actions on behalf of "victims of bigotry and discrimination."

And, of course, there's the Hate Map.

I've been involved with non-profits for most of my life. Some of the information on salaries and expenses is embarrassing, though many people would be surprised at the high salaries and expenses at even some of the most well-run and above-board non-profits.

On the other hand, the SPLC's political advocacy and education programs could be supported with only a handful of staff. This means that most of the non-administrative expenses should go to their legal activities. But they seem to have few active legal cases. On the other hand, lawyers, even if they're in-house lawyers, tend to be expensive.

But it's crass at the least, and unethical and potentially illegal at the most for a non-profit dedicated, among other things, to alleviating southern poverty, to have an administrative and salary structure similar to a for-profit law firm.

And then there are those offshore accounts...

I had to laugh at one of the details, not mentioned by the Free Beacon, that I found in the tax returns.

If you live in Chicago or many other major cities, you've probably been solicited by those street canvassers campaigning for the SPLC - "Do you have a moment for LGBT rights?" (A few years ago, I replied, "Sure. I also have a moment to tell you that I don't appreciate you labeling my favorite Catholic newspaper a hate group.") The canvassers are actually employed by Grassroots Campaigns, a vender that raises money for various liberal organizations. In 2015, their canvassing operation grossed $623,596 for the SPLC.

How much of that was paid to Grassroots Campaigns as the cost of fundraising. 25%? 50%? If you're cynical or know something about how these canvassing operations work, you would probably name a figure closer to 90%.

But as Donald Trump might say, "wrong!"

Actually, in 2015, the Southern Poverty Law Center paid Grassroots Campaigns $1,811,174 in return for a fundraising total of only $623,596.

That means their ubiquitous canvassing operations are actually a huge net loss.

SPLC is paying three dollars to raise each dollar. Grassroots Campaigns drained over $1 million from SPLC coffers in one year alone.

Next time you see one of those canvassers, thank them and shake their hand.