- 84 -
been fulfilled. An audience selected because of its
interest in cancer and other health related issues also
indicates the reason for the mailing is public
education. Conversely, if the message is a direct
appeal for funds and sent to individuals based on their
ability to contribute money, then the fundraising
function has been fulfilled. All circumstances
surrounding a mailing with regard to content and
audience are examined together to arrive at the joint
allocation of costs for each mailing between public
education and fundraising.
In 1987, the Council incurred joint costs of $9,705,721
for informational materials and activities that
included fundraising appeals. Of those costs,
$4,306,377 was allocated to public education and
$5,399,344 was allocated to fundraising. Expenses
related to both * * * [prospect mailings and housefile
mailings] were allocated to public education and
fundraising based on the relative content and intent of
each mailing without regard to intended audience.
NCIB did not accept petitioner’s allocations of its 1985,
1986, and 1987 mailing campaign expenses to public education. In
preparing its reports on various charitable organizations, NCIB
generally accepted the financial information contained in a
charitable organization’s financial statements, except for the
charitable organization’s allocation of its fundraising appeal
expenses to exempt purpose activity. While aware of SOP 78-10
and SOP 87-2, NCIB examined the reasonableness of the allocations
made by the charitable organization. For example, as indicated
above, in a report it issued on petitioner, NCIB concluded that
petitioner’s fundraising expenses for 1985 equaled about 97.7
percent of the related contributions petitioner received.
With respect to petitioner’s 1988 mailing campaign “joint
expenses”, petitioner’s certified public accounting firm
Page: Previous 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 NextLast modified: May 25, 2011