Efforts by the Zionist Organization of America to restore its tax-exempt status are not expected to hamper its fund-raising efforts locally, the director of the ZOA-Pittsburgh District said.
But the problems ZOA is dealing with reflect a wide range of financial issues with which many Jewish organizations are struggling.
The Jewish media, most notably the Forward and JTA, recently reported that ZOA missed the filing deadline for its Form 990s, the tax documents required by the Internal Revenue Service for tax-exempt organizations.
Many tax exempt groups run a few years behind on their 990s, the Forward reported, but they are not allowed to run three years late.
The Forward reported ZOA tax attorney Tyler Korn blaming the organization’s loss of its tax-exempt status on “serious failures by the ZOA’s accountants, management and board.”
ZOA National Director Mort Klein told JTA the organization has hired a top tax attorney and has “every confidence we will be reinstated.”
Meanwhile, ZOA-Pittsburgh District Director Stuart Pavilack said the situation should have no impact on the local Awards Dinner, which is slated for Oct. 31 at Congregation Beth Shalom.
“I don’t think it’s really going to have any affect whatsoever,” Pavilack said. “The cost to attend the dinner is not tax deductible and has never been tax deductible.”
As for donations — outright donations or through purchases of ads in the tribute journal (which are tax deductable), Pavilack said those checks are being deposited in holding foundations for the ZOA. “Those funds will not be touched or released to the ZOA until the situation gets resolved,” He said.
“I have been forthcoming in explaining the situation,” to donors and tribute book advertisers, Pavilack added. “I am putting together a pretty extensive tribute journal [for the awards dinner] — many advertisers. I have had one person question the 501(c)(3) status, and after hearing about it, that person purchased an ad.”
ZOA isn’t alone. According to a March 30 report by Inspector General for Tax Administration at the U.S. Treasury, the IRS informed more than 279,500 organizations on June 8, 2011, that their tax-exempt status had been automatically revoked.
The report concluded that improvements were needed to provide better guidance to organizations that had their tax-exempt status automatically revoked and ensure accurate information is posted to the IRS’s taxpayer database.
ZOA isn’t the only Jewish organization struggling with tax or other financial issues. B’nai B’rith International recently sought assistance from Pension Benefit Guaranty Corporation to meet the obligations of its pension plan, which is more than $25 million in debt.
Some organizations, such as CAJE (Coalition for the Advancement of Jewish Education), haven’t survived. CAJE shut down in 2009 — some $500,000 in debt.
In Pittsburgh, Bnai Zion, closed it regional office, while State of Israel Bonds stayed open while laying off a number of employees.
(Lee Chottiner can be reached at email@example.com.)