Allied Charities of Minnesota

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  • 02 Jun 2017 10:27 | Amanda Horner (Administrator)

    This article was written by Al Lund and originally appeared in the Rochester Post Bulletin on May 31, 2017.

    Toward the end of the 2017 legislative session, a seven-page bill (House File 1415) legalizing the online daily fantasy sports business was heard in committee in the Minnesota House of Representatives. The bill also licenses, regulates and taxes for-profit companies such as Fan Duel and Draft Kings. All in the space of seven pages.

    By comparison, Minnesota's community-based, non-profit charitable gaming organizations -- the operators of bingo, raffles and pull tab games that invest directly in their local communities -- have at least 200 pages of statutes and rules that regulate everything they do.

    The organizations that the Legislature believes need more regulation than the secretive, billion-dollar fantasy sports enterprises include groups like the Rochester American Legion Post 92. This nonprofit raises funds for local missions like youth baseball and hockey programs, Boy and Girl Scouts troops and high school graduation parties

    In addition to the excessive regulation, the Rochester American Legion is taxed at a rate of over 27 percent and paid more than $33,235 more in taxes to the state than they were able to donate to their mission.

    The Rochester American Legion Post 92 is only one of many organizations working throughout Southeast Minnesota to make our communities better places to live and work – all at no cost to taxpayers.

    The Legislature's treatment of the Legion and similar groups is unfair and here's why:

    Charitable gaming is not against competition or afraid of competition, but a leveling of the playing field is needed. Giving the keys to the state to for-profit competitors that only take is hard to understand and even harder to stomach.

    Fantasy sports will be the fourth group of for-profit direct competitors to charitable gaming (card rooms, horse racing and casinos being the other three). They are all being regulated and taxed

    at a fraction of charitable gaming. We would take their deal in a heartbeat.

    These other gaming organizations are taxed at only the corporate rate of 9.5 percent. If charitable gaming organizations had that rate, we would have had another $35 million to help our communities and missions. Charities are paying up to seven times the rate of their for-profit

    competition. That is an insult to everything that we do and stand for.

    The two behemoths in daily fantasy sports, Fan Duel and Draft Kings, have not paid any tax or provided any social benefits to Minnesota in the five years that they have been in business. Charitable gaming is paying $60 million in taxes this fiscal year and putting another $60 million into our communities. Add to that the fact that we are employing thousands of people and paying $25 million in local rents, helping to keep our sites in business.

    The daily fantasy sports bill was abruptly pulled by its authors before the end of session, keeping the games legal and operating with even less regulation than outlined in the bill. The issue is all but certain to come up again in future legislative sessions.

    Between now and February 2018 when the Legislature re-convenes, we will be talking to Minnesotans about the importance of tax and regulation relief for charitable gaming organizations. The current structure of community charities paying 36 percent in order to pay for the billion-dollar NFL stadium while fantasy sports and other forms of gaming in Minnesota enjoy a tax rate of less than 10 percent does not sit well with many Minnesotans. Many communities across the

    state are already feeling the effects as charities are forced to turn down local grants to pay their tax bill.

    What our members are asking for is simple: either treat for-profit gaming companies like us, or treat us like everybody else.

    "Something has to change," said Roger Vangness, Legion Post 92 gambling manager. "We didn't get into charitable gaming to be a revenue stream for the state. We want to help our

    community."


  • 23 May 2017 14:41 | Amanda Horner (Administrator)

    This article originally appeared in the Fargo Forum on May 22, 2017. View the original article here.

    A bill (H.F. 1415) licensing and regulating Daily Fantasy Sports (Fan Duel, Draft Kings and others) recently was heard in committee in the Minnesota House of Representatives. The legislation is seven pages.

    By comparison, Minnesota's community-based, non-profit charitable gaming organizations - the operators of bingo, raffles and pull tab games that invest directly in their local communities - have at least 200 pages of statutes and rules that regulate everything they do.

    The organizations the Legislature believes need more regulation than the secretive, billion-dollar fantasy sports industry include Moorhead Youth Hockey Association, a group raising money to make the expensive sport of hockey affordable for local kids.

    In addition to the excessive regulation, Moorhead Hockey is taxed at a rate of 30 percent and now pays $53,036 more in taxes to the state than it is able to spend on its core charitable mission. The Legislature's treatment of the Moorhead Youth Hockey Association and other non-profit charities working to make our communities better places to live and work is unfair and here's why: Fantasy sports will be the fourth group of for-profit direct competitors to charitable gaming (card rooms, horse racing and casinos being the other three). They are all being regulated and taxed at a fraction of charitable gaming. We would take their deal in a heartbeat. These other gaming organizations are taxed at only the corporate rate of 9.5 percent. If charitable gaming organizations had that rate, we would have had another $35 million to help our communities and missions. Charities are paying up to seven times the rate of their for-profit competition. That is an insult to everything that we do and stand for.

    The two behemoths in daily fantasy sports, Fan Duel and Draft Kings, have not paid any tax or provided any social benefits to Minnesota. Charitable gaming is paying $60 million in taxes this fiscal year and putting another $60 million into our communities. Add to that the fact that we are employing thousands of people and paying $25 million in local rents, helping to keep our sites in business.

    Allied Charities of Minnesota, the organization representing charitable gaming, supported legislation in this year's session to provide relief to charities. The bill stalled with no sign of resuscitation. Despite a $1.6 billion state surplus, a bipartisan agreement on the need for tax reform for over-burdened groups and a clear message from the 2016 elections that voters in Greater Minnesota are feeling left behind, most legislators refused to even listen to us.

    Perhaps the greatest irony and slap in the face is that community-based charities are paying tax rates of up to 36 percent in order to pay for the billion-dollar NFL stadium. Meanwhile, fantasy sports couldn't exist without taxpayer-funded stadiums and ship all the benefits out of state.

    We're not giving up. ACM plans to redouble its efforts in the coming legislative sessions to gain regulatory and tax relief for charities. We hope everyone who cares about the future vitality of Moorhead will urge their legislators to support us.

    Lund is executive director of Allied Charities of Minnesota


  • 18 May 2017 21:42 | Amanda Horner (Administrator)

    This article originally appeared on WJON on May 18, 2017.

    MAY 18 – When you spend time playing pull tabs, bingo, and meat raffles a big chunk of the money you spend is going to the state, not the charity you’re there to support.

    Al Lund is the executive director of Allied Charities of Minnesota. He says charitable gaming has been left out of any kind of tax relief for this legislative session.

    Minnesota taxes charitable gambling at 36 percent, far higher than the next closest state of North Dakota’s 10 percent.

    This was never intended to be a boon to the state. Charitable gaming was intended to benefit our local communities. We have 200 charities now, out of 1,200 that conduct charitable gaming, that are sending more to the state than they do for their communities and their missions.  We believe in our heart of hearts that is wrong.

    He says North Dakota charges only 10 percent as their top tax rate.  He says they would take that deal.

    One of their other issues is the competitors in gambling in Minnesota – horse racing, casinos, and card rooms – pay the corporate tax rate, even though they are for-profit companies. That corporate tax rate is 9 1/2 percent.

    Lund says, in Minnesota, for every dollar spent on charitable gaming .50 cents goes to expenses, .36 cents is paid in state taxes, and that leaves .14 cents left for donations to local communities.

    The current tax structure was put into effect in 2012.

    Lund says they have about three of their member organizations quit doing charitable gambling each month, because they’re paying more to the state than their community.

    Deb Fischer from the Central Minnesota Noon Optimist Club says last month, after prizes and expenses, her organization gave about $1,800 to charity and paid nearly $10,000 in state taxes.  Fischer says their club runs pulls tabs, bingo, and meat raffles at six bars and one gas station. Their mission is about helping kids.



    Read More: Charitable Gaming: 36 Percent State Tax Rate Not Fair | http://wjon.com/charitable-gaming-36-percent-state-tax-rate-not-fair/?trackback=tsmclip


  • 18 May 2017 12:56 | Amanda Horner (Administrator)

    This article was written by the Duluth News Tribune Editorial Board and originally appeared on May 18, 2017.

    It's called charitable gaming because the tens of millions of dollars raised in Minnesota every year from raffles, bingo, and the sales of pull tabs help support Little League neighborhood baseball, scholarships, police dogs, local zoos, Animal Allies, youth football, food shelves, and other community needs and niceties.

    But Genny Hinnenkamp, the gambling manager for Irving Community Club, the largest charitable-gaming nonprofit in Duluth, has another name.

    "We are tax collectors for the state of Minnesota. That's practically all we are," she said last week in an interview with the News Tribune Editorial Board.

    Hard to argue with her when a whopping 72 percent of Irving's charitable gaming profits goes in taxes and fees to state coffers. Irving's profits last year totaled a little more than $1 million. Of that, $733,000 went to St. Paul. Just $306,000 was able to be doled out to support and help pay for community wants and needs in West Duluth.

    Put another way, for every $1 Irving uses to support kids and neighborhoods, it pays more than $2 to the state in taxes and fees.

    It's not right. It's upside down, argues Allied Charities of Minnesota, charitable gaming's overseer in the state. Irving is among about 200 of the 1,200 licensed charitable gaming nonprofits in Minnesota that are upside down that way.

    No surprise then that charitable gaming advocates were in St. Paul in force this legislative session looking for relief. So more money could be directed to doing more good in their local communities, they asked if they could stop paying taxes on the money they charitably distribute to schools, youth-serving organizations, T-ball teams, and others in real need. They'd still pay state taxes on pull-tab sales, the paper used to produce pull tabs, the wages paid to pull-tab operators and others, and more. But do their charitable contributions really have to be taxed, too?

    The ask hardly seems unreasonable. Taxing charitable donations is just cold. "It's really sad," as Hinnenkamp put it. "The government is that greedy that they take away from the children."

    Most lawmakers agree — verbally and publicly anyway. But legislatively? The request went nowhere this session.

    And that actually shouldn't be surprising either. Charitable gaming is little-noticed and produces big bucks. The state expects to receive about $60 million this year by taxing charitable gaming. No longer taxing donations on the back end would reduce the state's take by $16 million. Other than the charitable gaming organizations, no one is screaming for the state to take the hit. So why should they, lawmakers can figure.

    Charitable gaming also is helping to pay for the Minnesota Vikings' football stadium in downtown Minneapolis. The first $36 million the state gets annually from pull-tab taxes goes to its general fund. The rest goes to the stadium. Lawmakers clearly see little reason to mess with a funding source so politically painless.

    But, "All we're trying to do is get more money into our communities. That's it," Lund said. "Instead, our biggest 'charity' is the state."

    That hardly seems charitable.


  • 18 May 2017 12:54 | Amanda Horner (Administrator)

    This article originally appeared in the Duluth News Tribune on May 18, 2017. 

    A seven-page bill to legalize daily fantasy sports recently was heard in committee in the Minnesota House. The bill would license, regulate, and tax for-profit companies like FanDuel and DraftKings. All in the space of seven pages.

    By comparison, Minnesota's community-based, nonprofit charitable gaming organizations — the operators of bingo, raffles, and pull-tab games that invest directly in their local communities — have at least 200 pages of statutes and rules that regulate everything they do.

    The organizations the Legislature apparently believes need more regulation than the secretive, billion-dollar fantasy-sports enterprises include groups like Duluth's Irving Community Club. This nonprofit raises funds for youth education and athletic programs, mostly helping underserved kids through organizations like the Boys & Girls Clubs, LifeHouse, Valley Youth Centers and a number of local athletic teams.

    In addition to excessive regulation, Irving is taxed at a rate of 36 percent and now pays $439,294 more in taxes to the state annually than it is able to spend on its core charitable mission.

    Irving is only one of many organizations working throughout Northeastern Minnesota to make our communities better places to live and work — at no cost to taxpayers.

    The Legislature's treatment of Irving Community Club and similar groups is unfair, and here's why: Charitable gaming is not opposed to competition or afraid of competition, but a leveling of the playing field is needed. Giving the keys to the state to for-profit competitors that only take is hard to understand and even harder to stomach.

    Fantasy sports will be the fourth group of for-profit direct competitors to charitable gaming, following card rooms, horse racing and casinos. They all are being regulated and taxed at a fraction of charitable gaming.

    We in the charitable gaming community would take their deal in a heartbeat. These other gaming organizations are taxed at only the corporate rate of 9.5 percent. If charitable gaming organizations had that rate, we would have had another $35 million to help our communities and missions. Charities are paying up to seven times the rate of their for-profit competition. That is an insult to everything we do and stand for.

    The behemoths in daily fantasy sports, FanDuel and DraftKings, have not paid any tax or provided any social benefit to Minnesota in the five years they've been in business.

    Charitable gaming is paying $60 million in taxes this fiscal year and putting another $60 million into our communities. Add to that our employment of thousands of people and our payments of $25 million in local rents, helping to keep our sites in business.

    The Legislature either should treat the for-profit gaming companies like Minnesota charitable gaming groups or, and this is our preference, treat us like they likely will be treated, presuming the fantasy-sports bill passes.

    The fantasy-sports bill passed the committee on a voice vote and was moved to the House floor for a vote. Meanwhile, the bill Allied Charities of Minnesota introduced to provide relief to charities stalled with no sign of resuscitation this session. Despite a $1.6 billion state surplus, a bipartisan agreement on the need for tax reform for overburdened groups, and a clear message from the 2016 elections that voters in nonmetro Minnesota feel left behind, most legislators refused to even listen to us.

    Perhaps the greatest irony and slap in the face is that community-based charities are paying tax rates of up to 36 percent in order to pay for the billion-dollar NFL stadium in Minneapolis. Meanwhile, fantasy sports couldn't exist without taxpayer-funded stadiums. So we have Minnesota charities being forced to turn down local grant requests so they can help pay for the NFL stadium while fantasy sports (and other forms of gaming in Minnesota) pay a tax rate of less than 10 percent and, in many cases, ship all the benefits out of state.

    We're not giving up. Allied Charities of Minnesota plans to redouble our efforts in the coming legislative sessions to gain some sort of regulatory and tax relief for charities. We hope everyone who cares about the future vitality of Duluth will urge their legislators to support us.

     

    Allen Lund is executive director of the St. Paul-based Allied Charities of Minnesota (alliedcharitiesmn.org). He wrote this for the News Tribune.


  • 14 Apr 2017 14:03 | Amanda Horner (Administrator)

    This article originally appeared in the Brainerd Daily Dispatch on April 14, 2017. View the original article here.

    State taxes have taken over the mission of local charities around the state according to a new survey of Allied Charities of Minnesota. Two-thirds of survey respondents reported that they have turned down requests for grants because of burdensome state taxes. High state taxes have caused many organizations to reject funding requests for groups or activities they normally would fund. High state taxes, driven in large part by the cost of U.S. Bank Stadium (which should be called the People's Stadium) is driving a lot of discussion around the future of gaming. Some 200 charities now are paying more in state taxes than they are able to contribute to their missions. Charitable gaming pays a tax rate that averages 22 percent and is up to seven times higher than a for-profit business.

    Baxter Lions is one of those charities. We have been forced to reduce donations to missions who need our support and have been dependent on us for years. We work hard to support our missions and it is discouraging to see so much go to the state while critical needs in our communities are unmet.

    While the House of Representatives has included a small amount of tax relief in its omnibus tax bill the Senate does not include charitable gaming in tis version.

    We are paying taxes on our gross profit before prizes and not on our net profit. So in all, we are paying taxes on money that never went to the bank.

    We need everyone to call their representatives about this now. Thank you!

    Sandy Johnson

    Baxter Lions gambling manager and Allied Charities of Minnesota Region 7 director


  • 23 Mar 2017 11:23 | Amanda Horner (Administrator)

    This article originally appeared in the Walker Pilot-Independent on March 23, 2017. The original article can be viewed here.

    BACKUS — Citing a continued improvement in the economy, moderate gas prices that helped boost travel to the lakes area and  public support of its program, the Backus American Legion Charitable Gaming Partnership increased its contribution to charity and taxes paid to government by $29,814 or 49 percent in 2016.

    Donations to civic causes, including education, service organizations, food shelves, public safety and youth recreation totaled $46,822, an increase of $16,647 or 55 percent over 2015. The state of Minnesota continued to be the largest single recipient of the Legion’s charitable gaming profits, collecting $39,662 in taxes and fees in 2016, an increase of $12,610 or 46 percent from the previous year.

    The heavy state burden has continued to draw criticism from Allied Charities of Minnesota, the umbrella organization representing the charitable gaming industry. Sponsoring organizations, including veterans and fraternal clubs, were able to donate $60 million to their communities but sent another $56 million to the state in taxes and fees. Al Lund, ACM executive director, noted in a year-end analysis that 200 of 1,200 state licensed charitable gaming organization now pay more in taxes than they are able to donate to their communities. He predicted that trend will continue and that unless the Legislature enacts tax relief for charitable gaming, a majority of organizations, including veterans posts, will be paying more to the state than they raise for their charities.

    “We understand that we will pay more than others in state tax, but more to the state than we have to use is something that we can no longer stand for,” Lund said in a statement describing the status of the industry.

    Education, public safety, youth recreation and local food shelves were among the chief benefactors of the Legion’s partnership donations. The program includes the Backus Post, located at the intersection of Hwys. 371 and 87 W., and Willard’s Saloon & Eatery in downtown Backus. This year the post added the Birchwood Char House in Hackensack to its program.

    The post doubled its scholarship program donation to the Pine-River Backus School District, increasing the 10 scholarships awarded from $500 to $1,000 each for a total expenditure of $10,000. It  also raised from $1,000 to $1,500 the contribution to the Central Lakes Rotary STRIVE program aimed at keeping underperforming Pine River-Backus students in school, graduating and preparing for post-secondary education.

    The Legion increased its support for boys and girls scouting activities and continued to support Hackensack and Pine River food shelves serving the area with a total contribution of $6,000.

    Backus Fire and Emergency Medical units received $6,000, an increase of $2,000 over the previous year, and the city of Backus received $3,200 for improvements at Evergreen Cemetery.

    Youth recreation expenditures included funding for girls’ basketball, boys’ wrestling and trap shooting, which has become a popular Minnesota State High School League recognized sport for boys and girls, and an additional $500 to the annual, summer-long Hackensack area childrens fishing contest

    The post also continued its supports of childrens’ holiday parties, veterans assistance programs and supported its auxiliary program providing holiday gifts for active duty troops.

    “We are extremely pleased with the growing public support of our program,’’ said Backus Legion Commander Eugene Gagnon. “It means we can continue to increase our commitment to meeting needs of our area residents and communities – making northern Minnesota a better place to live.”

    Charitable gambling’s main source of revenue is pull-tabs, which have consistently provided more than 90 percent of revenues but includes bingo, paddle wheels, raffles and tip boards.


  • 14 Mar 2017 12:58 | Amanda Horner (Administrator)

    This article was written by Olivia Alveshere and originally appeared in ABC Newspapers March 14, 2017. View the original article here.

    The Spring Lake Park Lions Club paid more in taxes than it was able to give away in fiscal year 2016. After expenses, the club turned over 80 percent of its net receipts to the state.

    The Spring Lake Park Lions paid $438,654 in taxes on charitable gaming. The amount the club was able to give to charitable causes pales in comparison: $156,175. Photo submitted

    The Spring Lake Park Lions gave $156,175 to various charities in fiscal year 2016, but the group paid more than double that amount in taxes and fees: $438,654.

    The Lions aren’t an anomaly, and Allied Charities of Minnesota is going to bat at the Legislature for 1,200 organizations that hold gambling licenses across the state.

    We didn’t join these organizations to be tax collectors for the state, and that’s what’s happening,” said Allen Lund, executive director of Allied Charities of Minnesota.

    Charitable gambling generated $1.5 billion in fiscal year 2016, and $1.3 billion were returned in prizes. After prizes were paid out, the Minnesota Gambling Control Board’s annual report shows organizations statewide spent 50 percent of remaining dollars on expenses, 28 percent on charitable contributions and 22 percent on state taxes.

    Since 2012, organizations have paid as much as a 36 percent tax on pull tabs, tip boards and electronic link bingo, which accounts for 94 percent of gambling revenue, according to Lund. Other games, such as bingo, raffles and paddlewheels, are taxed at 8.5 percent.

    Changes were made five years ago to help finance the construction of U.S. Bank Stadium. Each year, the first $37 million collected in taxes from charitable gambling goes into the general fund, and the balance goes toward the stadium. Last year, $60.6 million was collected in taxes, so just under $24 million was transferred to the stadium reserve account.

    Lund calls the stadium “the elephant in the room.”

    The Minnesota Department of Revenue certainly does not want to lose dollars earmarked for the stadium.

    Paul Cummings, tax policy manager for the department, testified before lawmakers last month, urging them to consider costs of proposed legislation carefully.

    Half of the licensed gambling organizations are allowed to make lawful contributions to themselves, Cummings said.

    “The impact of this type of transfer on the remaining tax base is unknown, but it could be much larger than $26 million,” he said.

    A bill in both the Minnesota House and Senate would exempt donations from being taxed by the state, which would save nonprofits across the states millions of dollars.

    “There is no one else that we can find in the state, whether it’s a business or an individual, that does not receive some kind of tax benefit from donating money,” Lund said. “If Minnesota businesses were taxed like we’re taxed, there would be no Minnesota businesses. They would have all left.”

    A bill authored by Rep. Bob Dettmer, R-Forest Lake, co-authored by local Rep. Connie Bernardy, DFL-New Brighton, and many others, has moved through House Commerce and Taxes committees for possible inclusion in an omnibus tax bill.

    “Charitable gambling provides an opportunity for local charitable organizations, religious institutions and other charities to invest in their communities,” Bernardy said. “Homegrown investments help our communities and neighbors thrive.”

    The Senate Taxes Committee was set to hear a similar bill authored by Sen. Carla Nelson, R-Rochester, March 8.

    Sen. Jerry Newton, DFL-Coon Rapids, has signed on as a co-author to a similar bill, authored chiefly by Sen. Eric Pratt, R-Prior Lake.

    “Every month we get an exuberant amount of requests that sometimes we have to say no to,” said Amanda Jackson, gambling manager for the Spring Lake Park Lions.

    If legislation made charitable contributions tax exempt, “then we wouldn’t have to say no to some of these good causes,” she said.

    Other Spring Lake Park organizations with gambling licenses are Minnesota Youth Athletic Services, which donated $220,683 in fiscal year 2016 and paid $268,504 in taxes, and the Kraus-Hartig VFW, which donated $2,323 and paid $25,530 in taxes in fiscal year 2016.



  • 02 Mar 2017 15:13 | Amanda Horner (Administrator)

    This article was written by Allen Lund and originally appeared in Press & News March 1, 2017. View the original article here

    To the Editor:

    There is a bill moving through the Minnesota Legislature (House File 226, Senate File 419) that would exempt donations from state tax for licensed non-profits in Minnesota that conduct charitable gaming.
    Licensed non-profits who conduct charitable gaming are currently allowed no deductions of any kind, even our donations are taxed. In Maple Grove and Osseo the non-profits conducting charitable gaming are the Maple Grove Fire Relief Association, Osseo Lions, Osseo-Maple Grove American Legion, Osseo Maple Grove Hockey Association, Maple Grove Lions and Osseo Fire Relief Association. Together in the most recent fiscal year (2016) these groups combined to pay $1.1 million in taxes while donating $1.2 million to their communities and chosen missions.
    Organizations are fast approaching a point where they will be paying more in taxes than they have for our communities and their missions. If passed the bills would provide $355,000 in relief to the Osseo/Maple Grove organizations ($132,000 in relief to the OMG Hockey Association alone). Any relief would go directly back into our communities. Senator Limmer is an author of the Senate bill. Please remember to thank him for his support when you see him. Please contact your other legislators to ask for their support of the bill.
    With your help we can help keep these six groups investing in our local communities for a long time to come. You can find out who represents you at http://www.gis.leg.mn/iMaps/districts/
    Allen Lund,
    Maple Grove
    Editor’s Note: Allen Lund is Executive Director Allied Charities of MN (Trade Association) and an Osseo Maple Grove Legion Member


  • 23 Feb 2017 14:21 | Amanda Horner (Administrator)

    Should places like the VFW have to give away portions of their proceeds? Many times they are funding community programming and they need relief.

    Watch the 2 minute interview with Sen. Mary Kiffmeyer (R-Big Lake) and Rep. Jeff Howe (R-Rockville) here.


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