Allied Charities of Minnesota

News

  • 20 Feb 2017 14:47 | Amanda Horner (Administrator)

    This article was written by Shannon Prather and originally appeared in the Star Tribune Feb. 20, 2017. View the original story here.

    Some nonprofits pay more in taxes on pulltabs, other gambling than they give out to community. 

    For every dollar raised through charitable gambling that the Irving Community Association gives to food shelves and children’s programs, it pays more than $2 in taxes.

    The Duluth-based nonprofit paid $733,000 in state taxes and fees last year, more than double the $306,000 it spent on good works, according to its gambling manager.

    Irving belongs to a group of nonprofits with gambling operations now asking state lawmakers for millions in tax relief to free up more revenue for charity.

    But the Minnesota Department of Revenue has expressed concern about losing dollars that go into the state’s general fund and help pay for U.S. Bank Stadium.

    The bill has passed through two House committees with bipartisan support, said Allen Lund, executive director of the trade group Allied Charities of Minnesota.

    “Our mission is to give back to the communities and take care of the children,” said Genny Hinnenkamp, charitable gambling manager for the Irving association. “But you wonder, is it worth just being a tax collector for the state?”

    Hinnenkamp, who testified in front of the House Taxes Committee last week, said some lawmakers seemed surprised that the tax bills for nonprofits were so much higher than the amount left for charity. She said it especially stings to be paying for U.S. Bank Stadium, a facility built primarily for professional athletes, while her nonprofit — which helps little leagues, youth hockey associations and after-school programs — has yet to replace its longtime headquarters, lost to Duluth’s 2012 floods.

    Minnesotans spent $1.5 billion on charitable gambling in fiscal year 2016, including pulltabs, bingo and meat raffles. More than 80 percent of that was paid out in prizes by 1,200 participating nonprofits.

    Overall, nonprofits that use gambling paid an estimated $60.6 million in state taxes and fees levied against their operations last year while directing $62 million to their charity work, which includes the support of veterans, youth sports and people with disabilities, according to the Minnesota Gambling Control Board’s annual report.

    Organizations are taxed on their gross receipts, minus prizes paid, at a progressive rate that ranges from 9 to 36 percent for pulltabs, tip boards and electronic link bingo. They’re taxed at a rate of 8.5 percent for other games.

    “The charities are fast approaching the point where they will be paying more to the state than they have for their communities’ needs and missions,” Lund told the Taxes Committee.

    The proposed law change would create a tax exemption for the money that nonprofits use for charitable missions. Nonprofits would still pay taxes on funds they use for operational costs.

    Lund said the proposed change would cut taxes by an estimated $16 million per year, shifting that money directly to charity work.

    But Paul Cummings, tax policy manager for the state Revenue Department, cautioned lawmakers that the cost of the proposed tax relief “could be significantly greater than $26 million” and affect the amount that goes to U.S. Bank Stadium.

    Lawmakers last changed the tax structure for charitable gambling in 2012 to help fund the construction of U.S. Bank Stadium. The first $37 million collected in taxes from charitable gambling is deposited into the general fund, with the balance going toward the funding of the stadium.

    “The elephant in the room is the 2012 stadium bill. We do not believe the intent of that legislation was to harm charitable gambling in Minnesota, but that is becoming the net effect of that bill,” Lund told the Taxes Committee.

    Rep. Diane Loeffler, DFL-Minneapolis, expressed some skepticism about changing tax laws and said she worries about the expansion of gambling, which can breed compulsive gambling issues.

    “It shows up in all kinds of social costs in our state budget,” she said.

    “This bill is not about the expansion of gambling,” Lund said. “This bill is about getting more money back to your communities where we address needs.”


  • 09 Feb 2017 06:28 | Allen Lund (Administrator)

    Audio of the committee hearing in the link below.  Representative Dettmer, myself, Nancy Immel from the Forest Lake Lions and Al Hauge of the Forest Lake Athletic Association are the testifiers.  We start at the 5 minute mark.

    http://ww2.house.leg.state.mn.us/audio/mp3ls90/com020817.mp3

  • 07 Feb 2017 08:54 | Allen Lund (Administrator)

    Members and Associates,

    This might be the most important thing you do this year on behalf of your charitable organization. Yes, what I'm asking of you is THAT important. On Wednesday, the Community Vitality Investment Act will receive its first legislative hearing. The bills (HF 226 in the House of Representatives and SF 419 in the Senate) would bring some fairness to how our charitable contributions are taxed.

    Right now, charitable gaming organizations are the only entities in the state that provide good and services and are NOT able to deduct donations from their taxable income. Think about that. Our organizations exist only to invest in making our communities safer and better places in which to live and work. Yet, we alone are singled out under the state's tax code and required to pay taxes on charitable contributions. Legislators need to hear directly from YOU and the beneficiaries of your charitable contributions. Send an email, make a phone call or write a letter to your legislators (you can find out who represents you here --  http://www.gis.leg.mn/iMaps/districts/ ) and let them know how vital this legislation is to your community's vitality. 

    Most importantly, let your legislator know what your organization does. Provide some examples of what your charitable contributions have meant to your community and the things that high taxes are preventing you from doing. Provide real-life examples.

    Here are some other facts to share:

    ·         Charities now pay more than $1 million a week in taxes to the state on their charitable gaming operations – nearly $56 million in Fiscal Year 2016.

    ·         The legislation does NOT change current tax rates on charitable gaming organizations – rates that now average about 22 percent and is up to 7 times higher than for-profit organizations.

    ·         The change in law proposed under the legislation would only affect taxes imposed on charitable contributions. If successful, the legislation would give charities about $16 million more to invest in their communities, based on FY 16 revenue and contributions. Let your legislators know what the tax

    It is essential that you contact your legislator today. Let him or her know how critical this legislation is savings could be invested in your community.  to your organization and your community. Be sure to reference the bill numbers (HF 226 when you are writing to a member of the House of Representatives and SF 419 when writing to a Senator. 


  • 12 Jan 2017 14:29 | Allen Lund (Administrator)

    Here is the House and Senate versions of the charitable gaming tax relief bill for the 2017 legislative session.

    HF0226.0.pdf

    2017SF0419.pdf

    We have our House file number and the Senate file number for the Community Vitality Investment Act. It is HF226.  This bill is a matter of fairness and common sense. It makes our donations exempt from the state gambling tax, giving us more to invest in our missions and our communities. 

    Contact your Representative and ask them to sign onto the bill.  In the House every Representative can sign onto a bill.  Contact your Senator and and ask them to support the bill.  In the Senate only six Senators can sign on to a bill.  ACM will cover that.  You can find out who represents you at http://www.gis.leg.mn/iMaps/districts/

    How important is it that you educate your legislators? Earlier this week, we sent the Star Tribune opinion article (http://www.startribune.com/charitable-gaming-bears-more-than-its-fair-tax-share-time-for-a-change/410456545/) to all members of the state legislature. We heard back from several members that they already knew about the legislation and wanted to co-sponsor it BECAUSE they heard from a charitable organization in their community. 

    We have a long way to go; we are hearing that there is a possibility that the legislature will pick up the tax bill from last session that did not get passed.  Tax relief for all charitable gaming was not in that bill.  We need to make sure that we are all in any tax bill passed this year.  And that won't happen if legislators don't hear from you. Your voice and your voice alone can provide legislators with the understanding they need of just how much you are doing for your communities and how valuable it would be to be able to make your contributions without also having to pay taxes on the donation. 

    Educate your Representative on the importance of charitable gaming in your community, what the extra dollars would mean to your community and what is not getting done in your community today because of the money you are sending into state government. 

    Regards,

    Al Lund


  • 14 Dec 2016 12:58 | Allen Lund (Administrator)

    Members,

    Please review the attached.

    201612141taxrelief.pdf

    2017 Dear Legislator.docx

  • 29 Nov 2016 08:44 | Allen Lund (Administrator)

    Members,

    Please read the article that was in the StarTribune this past Sunday.  Below is the letter to the editor that I submitted yesterday.  We are in the process of preparing our tax relief bill that will ask that our donations be exempt from the monthly state gambling tax (Chapter 297E).  We will get you a suggested letter to send to your legislators asking them to author a tax bill with the necessary language.  It will only be through the efforts of all of us that we will get much needed tax relief in 2017.  Stay tuned.

    Letter to the editor:  

    I call it the gift that keeps on giving or being exceptionally thankful if you are a Wilf, Michele Kelm-Helgen, Ted Mondale or the MN Sports Facility Authority board.  I just finished reading another article in the Star Tribune (11/27/2016 Suite Deal, Stadium Leaders get free seats, secret guest list) on how the stars have aligned if you are one of the aforementioned.  

    The Wilfs are thankful for naming rights (on the stadium and a parking ramp), seat licenses, state contribution, doubling of franchise worth and NFL payment.  Michele Kelm-Helgen and Ted Mondale are thankful for six figure salaries along with free use of suites and last but not least freebies for the MN Sports Facility Authority board.  

    Not so thankful are the not for profit organizations that are tasked with paying for the stadium.  Not for profit charitable gaming organizations were tasked with paying for the stadium in the 2012 legislation that made the stadium a reality.  There are no individual tax payer taxes paying for the stadium.  Early on when not for profit organizations were not sending in enough taxes to make the annual bond payments a corporate unity tax ($20 million annually) was instituted to help. Not for profit community based charities collectively paid $55.8 million in taxes this past fiscal year to pay towards the stadium bonds ($18.9 million) and pay into the general fund ($36.9 million).      

    There is now an excess of taxes going into the stadium fund to make the annual bond payments.  Minnesota non-profits such as fire, police, veteran, church, civic, youth, community and fraternal groups are now on the cusp of sending more money to the state than they have for their missions.  Minnesota charitable gaming was a means to an end to get the new stadium built.  The end has been delivered, some would say on a silver platter.  It is now time to let up on the means and lessen the burden on the good folks and organizations that do great work in our local communities.  

    Community resources are being depleted in order to pay for a glass edifice dedicated to billionaires and millionaires.  The neediest in Minnesota would be grateful if the legislature could right a wrong in the 2017 legislative session.  

    Al Lund

    Executive Director

    Allied Charities Of Minnesota (ACM)
    3250 Rice St
    Saint Paul, MN 55126-3080
    Office #: 651-224-4533

    Fax #: 866-240-6160 

    alliedcharitiesmn@gmail.com


    ---------- Forwarded message ----------
    From:  <alliedcharitiesmn@gmail.com>
    Date: Sun, Nov 27, 2016 at 11:06 AM
    Subject: Allen Lund sent you an article from startribune.com
    To: alliedcharitiesmn@gmail.com


    This article from StarTribune.com has been sent to you by Allen Lund.
    *Please note, the sender's identity has not been verified.

    The full article, with any associated images and links can be viewed here.
    Work or perk? U.S. Bank Stadium executives have free access to luxury suite seats
    Rochelle Olson, Star Tribune

    The government appointees who oversee U.S. Bank Stadium on behalf of taxpayers get a perk unavailable to most Minnesotans: free tickets to two lower-level luxury suites for all events held there. The suites are for marketing purposes but, they admit, friends and family are often in attendance.

    Taxpayers covered almost $500 million of the $1.1 billion cost of the stadium, but the public cannot find out who gets those 36 suite seats each game. The Minnesota Sports Facilities Authority (MSFA) members decline to say who joins them for complimentary food, beer and, in some cases, free parking in the same lot reserved for Vikings players and coaches.

    The Vikings sold “Norseman suites” identical to the two used by the MSFA for between $200,000 to $300,000 for the 10 NFL home games.

    Both MSFA Chairwoman Michele Kelm-Helgen and Executive Director Ted Mondale say confidentiality is critical as they seek to book the stadium’s event spaces to cover the cost of amateur events such as high school football, baseball and soccer games, along with University of Minnesota baseball games.

    “If people think they’re going to be in the newspaper, it’s not going to be effective,” Mondale said.

    Still, the perk and the lack of transparency are prompting ethical and perhaps legal questions.

    David Schultz, a Hamline University political science, law and ethics professor, said the board is violating state law by using public positions for personal benefit and to access something not available to the general public. The notion that they are using the suites for marketing purposes is “dubious at best,” he said. “Beyond state law, it just looks bad.”

    Two of the original five MSFA members also question the need for two prime suites.

    “These seats are not in the bleachers; they’re currency,” said Duane Benson, who resigned from the board in 2015 after a public disagreement with Kelm-Helgen about board management. “There’s a concentration of power here that could be a problem as time goes on.”

    Kelm-Helgen and Mondale said they work long hours on game days and spent long nights negotiating on behalf of taxpayers during construction of the building, so having friends and family there is reasonable. They also say they need to be in the suites to sell the stadium to clients. “The whole idea is to develop the confidence that we know what we’re doing,” Kelm-Helgen said.

    The Vikings so far have played five home games and two preseason games, meaning up to 252 people could have attended games in the suites.

    After the Star Tribune made a request through Gov. Mark Dayton’s office, Mondale and Kelm-Helgen provided the names of 12 current and former public officials who attended and paid for suite tickets to NFL games. All but one, former Vice President Walter Mondale, paid for the tickets recently. Mondale, who attended the opening Green Bay Packers game Sept. 18 as a guest of his son, wrote a $350 check that was deposited late last month. No other checks were deposited until Nov. 17, after the Star Tribune began inquiring about the seats.

    Among the guests in the suites who reimbursed the MSFA $200 this month were: Minneapolis Mayor Betsy Hodges and her husband, Gary Cunningham; several state commissioners; Minneapolis City Attorney Susan Segal and her husband, Minnesota Management and Budget Commissioner Myron Frans; and Minneapolis City Council Member Jacob Frey.

    Dayton supports the MSFA’s decision on disclosure. “The governor believes that is the decision of the Minnesota Sports Facilities Authority,” said his spokesman, Linden Zakula, who attended a game in the suite.

    The spokesman said state law doesn’t require commissioners or staff to pay for their tickets because the stadium is a “public entity” and they’re engaged in public business. Zakula said he recently paid $200 for his ticket to “avoid the appearance of impropriety.”

    Minnesota public officials are subject to a gift ban, which includes a prohibition on accepting privileges not available to the public. But the ban allows public officials access to services and privileges when they are part of their duties.

    As chairwoman of the Legislature’s State Government Finance Committee, state Rep. Sarah Anderson, R-Plymouth, said she wants to “bring some integrity to the process” of the MSFA’s management, including the suites.

    “We should be able to have a list of who’s there and when they’re there,” she said, adding that she’d like to know if tickets are being illegally given to campaign donors. “There definitely needs to be a change in how they do this.”

    Across downtown at Target Field, the Minnesota Ballpark Authority (MBA) has a single suite, on the upper level at the end of right field attached to its offices. The MBA’s paid executive director, Dan Kenney, said no log is kept of the number of tickets used and by whom. He said it’s not uncommon for the suite tickets for midweek day games to be given to charity.

    Negotiated with Vikings

    U.S. Bank Stadium has 27 Norseman suites on the lower concourse. The two that the MSFA controls, after negotiations with the Vikings during the stadium’s construction, are at about the 20-yard line on the visitor’s side of the field. Kelm-Helgen, whose job description includes “distribution of event tickets,” declined multiple requests from the Star Tribune to be allowed to visit the suite on a game day. When a reporter arrived at the suite during a recent game, Kelm-Helgen was chatting with her adult daughter and declined to speak to the reporter.

    In an interview last week, Kelm-Helgen provided only the broad categories of guests in the suites, including members of the city’s convention bureau, labor leaders, business leaders, higher education officials and neighborhood leaders. The MSFA eventually identified guests who paid to attend.

    Longtime lobbyist Andy Kozak wasn’t on the list provided by the MSFA, but said he attended the Nov. 6 game against the Detroit Lions as a guest of Kelm-Helgen and used a free parking spot. He said he’s known Kelm-Helgen for 40 years and his clients have been involved in stadium issues like electronics and security. “I frankly didn’t think much of it,” said Kozak, who has a roster of powerful clients at the State Capitol. “All I can say is I was invited and I went.”

    Kozak went for free, but Kelm-Helgen and Mondale said they recently determined the market rate for a spot in the suites at $200 by charging $132 for the ticket and $78 for food.

    Minnesota taxpayers cover the price of food for MSFA guests. Alcohol is paid for separately by commissioners. The commissioners, who are appointed by the governor and the city of Minneapolis, are not paid beyond a small per diem for monthly meetings.

    Kelm-Helgen and Mondale wouldn’t say how many tickets commissioners get for events.

    Commissioner Tony Sertich, a former DFL lawmaker who lives in Hermantown, said he is allotted up to five tickets per event, including one for himself. He was unable to recall which games and events he had attended, but said he has brought his wife, as well as social and business associates. “I don’t cold-call people” to go to the game, he said.

    Commissioner Barbara Butts Williams, a dean of business and technology at Capella University, did not respond to e-mails or voice messages. Commissioner Bill McCarthy, Minnesota AFL-CIO president, sent a brief e-mail saying he tries to attend as many events as possible. He declined follow-up questions.

    Commissioner John Griffith, a sometime critic of Kelm-Helgen whom Dayton declined to reappoint to the MSFA, will attend his final meeting Dec. 16. He bought his own Vikings season tickets, but used suite tickets for two soccer matches and a Vikings preseason game. “If every week you’re just bringing your family to the games,” he said, “that’s not right.”

    Rochelle Olson • 612-673-1747

    Twitter: @rochelleolson


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