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February 25, 2018

Where Does $100 to the International Union of Police Associations AFL-CIO Go?

by Anne Paddock

Whenever a mass shooting occurs in the US (which is a monthly if not weekly occurrence), it seems the phone solicitation calls asking for support for our law enforcement increase.  This week, I received a call from an organization called the International Union of Police Associations AFL-CIO asking for a financial donation. I declined but thanked the man calling for alerting me to another non-profit whose IRS Form 990 needs to be looked at.

The International Union of Police Associations AFL-CIO (IUPA) is a 501 (c) (5) – which is a labor, agricultural or horticulture organization whose object must be the betterment of conditions of those engaged in the pursuits of labor, agriculture, or horticulture, which includes lobbying. Although 501 (5)’s are exempt from federal tax, contributions to these organizations are generally not deductible as charitable contributions.

According to the Form 990 (2016) covering the year beginning April 1, 2016 to March 30, 2107 submitted by IUPA to the IRS, IUPA is a labor union made up of members of law enforcement, based in Sarasota, Florida. Key pieces of information are as follows:

IUPA reported $19.4 million in revenue of which only $2.9 million came from membership dues. $16.4 million came from contributions which were primarily phone solicitation fundraisers who were compensated $14.7 million, netting IUPA $1.7 million. In other words, for every $1 raised by the phone solicitation fundraisers, only 10 cents went to IUPA because the phone solicitors kept 90 cents of every $1 or $90 of every $100 raised.

IUPA reported total expenses of $19.2 million, of which $14.7 million was paid to fundraisers, as stated below:

  • $14.7 million (76% of revenue):  Fees paid to Fundraisers
  • $ 1.8 million (9% of revenue):  Salaries, Benefits, Pension, and Payroll Taxes
  • $ 1.3 million (7% of revenue):  Legal, Accounting and other Fees for Services
  • $ 1.0 million (5% of revenue):  Office, Occupancy, IT, Insurance, Interest, Per Capita Taxes
  • $ 0.3 million (2% of revenue):  Travel and Conferences
  • $19.2 million: Total Expenses

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 76:  Fees to Fundraisers

-$  9:  Salaries, Benefits, Pension, and Payroll Taxes

-$  7:  Legal, Accounting, and other Fees for Services

-$  5:  Office,Occupancy, IT, Insurance, Interest, Per Capita Taxes

-$  2:  Travel and Conferences

-$100:  Total Expenses

However, it is important to point out that if $100 in revenue came from fundraisers, only $10 is provided to IUPA. Basically, IUPA is a labor union with 25 employees whose expenses total $4.5 million a year but whose membership dues only bring in $2.9 million. To make up the $1.6 million shortfall, IUPA relies on fundraisers who end up keeping most of what they raise. If you don’t want 90% of your donation to go to fundraisers, don’t respond to phone solicitations for IUPA.

IUPA has affiliate organizations whose names are used by fundraisers. These organizations operate out of the same business address in Sarasota go by the following names:

  • The Institute for Police Research
  • The IUPA Law Enforcement Officers Relief Fund
  • The US Secret Service Uniformed Division Officers Association
  • International Union of Police Associations – Florida Local 6000 – AFL-CIO
  • Law Enforcement Political Action Committee
  • Fairfax Deputy Sheriff’s Coalition
  • Lee County Deputy Sheriff’s Association

The phone solicitation fundraiser’s names are:

  • Outreach Calling of Reno, Nevada
  • Jak Productions, Inc of Atlanta, Georgia
  • Charity Appeal of Carson City, Nevada
  • Courtesy Call of Las Vegas, Nevada
  • Charity Promotions of Birmingham, Alabama
  • Donor Relations of Wilmington, Delaware
  • Public Awareness of Baton Rouge, Louisiana
  • RPI NY of Eatontown, New York
  • With Community Services of Baton Rouge, Louisiana
  • Statewide Appeal of Baton Rouge, Louisiana

If you receive a phone solicitation call, ask who is calling (the phone solicitors usually say they are calling on behalf or an organization and don’t tell you who they work for) and do not make a donation unless you want 90% of your donation to go to the above organizations.

Other key pieces of financial information on the IRS Form 990 include:

The 25 employees received total compensation of $1.8 million which equates to $72,000 each.  Three employees received more than $100,000 in compensation:

  • $226,454:  Samuel A Cabral, President
  • $144,468:  John O’Keefe, Executive VP and Secretary/Treasurer
  • $139,473:  Kevin Boyle, General Counsel

Each director of IUPA received $800 in compensation.

IUPA has total assets of $1.9 million which is concentrated in other securities (Prudential and Insignia Equities and bonds) and cash.  Liabilities total $1.3 million, most of which is deferred compensation, leaving net assets of about $600,000.

The bottom line is that IUPA is a labor union whose members don’t pay enough memberships dues to cover the expenses of the organization (most of which are staff, office/occupancy expenses, and legal fees). Instead of using fundraisers to make up the $1.6 million shortfall in revenue needed to cover expenses, IUPA uses fundraisers (who keep 90% of what they raise).  IUPA should raise membership dues to cover the services their members pay to be covered for instead of asking the public to cover the shortfall through phone solicitors who kept most of the donations.

To read the IRS Form 990, click here.

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