Melynda and Bill represented AAA in a meeting with John Porter to discuss AAA’s possible involvement in ACT
An initial meeting had been held last year to find out what ACT was. This meeting was designed to explore in more detail the possible use of ACT by AAA in its aquatics initiative. Melynda and Bill had their own questions about various aspects of how ACT operated, as well as questions raised by other AAA members who were unable to attend. The highlights of the meeting were:
- ACT is a “Field of Interest” Charitable organization with a 501 c 3 status with the IRS. John explained that the best way to view ACT is to see it as a Charitable Bank where AAA would have an account. Money donated on our behalf would go into the account. AAA could authorize payments from that account as long as they were to an established 501 c 3 or for the betterment of our objective. An example of the latter would be that we could spend money for a fund raising brochure even though the printer wasn’t a charity or 501 c 3 because it was being spent for the betterment of achieving our objective (which would be to help the City improve aquatics). Along with charitable entities, expenditures can be made to City entities or, in the case of the brochures, on expenses that will ultimately help out the City (by maximizing donations to it.)
- All donations to our account would be tax deductible because of ACT’s 501 c 3 status.
- ACT uses a third party – Greater Horizons – out of Kansas City that provides all the administrative support during the year and all of the tax filings with the IRS. For that, ACT pays a flat fee, plus some other charges based upon overall volume of transactions. ACT then charges its clients 1.25% per year, which is assessed on a quarterly basis.
- Expenditures from our account are made based upon our request. this is one of the areas where a number of us had questions. Technically, and money donated belongs to ACT and they can allocate it. Practically speaking, they allocate it based upon what the client says. Otherwise, they would not have remained in business for the past 10 years. We would have to identify who from AAA would have the authority to allocate expenses, but that can be done by us – not ACT.
- In answer to one question about what happens if all of our board members leave and there is no leadership left in AAA to allocate funds, ACT has the authority to distribute the funds as it sees fit. However, in reality, what they do is ask the client when they set up the account to identify whom to give any remaining funds to if the leadership event occurs. For example, AAA can stipulate that any remaining funds are donated to the City – or to some charity we identify.
- ACT has assets of about $9 million. John gave us several copies of their annual report, which also lists their Board of Directors (which includes many recognized public and private individuals in the City). I have some extra copies available – let me know if you want me to send one to you.
- ACT has the capability to receive donations on-line or by check. On-line donations incur an extra administrative charge by the on-line company that receives the donation on behalf of ACT.
- The funds in our account would be invested as we see fit. They have a number of choices monitored by Greater Horizons – conservative approaches, more aggressive approaches, etc. We can opt not to invest anything if we wish. If we choose to invest, then we run the same risks as the stock market – we can lose money or make money.
- ACT has 58 clients using them right now. They range from family trusts to charitable foundations – the common thread is all are interested in philanthropic uses of their money.
- Another question had been asked about the initial $10,000 deposit with ACT. That money would go into the client’s account for the client’s use. ACT doesn’t retain any of it for administrative use.
- John indicated that we could join ACT with an initial deposit of $3,000 or so, but that we couldn’t use any of it until we reached the $10,000 level.
- In our discussions, we agreed that it would probably be best for AAA to attain 501 c 3 status and use initial donations for the fund raising brochure since we probably wouldn’t be at the $10,000 level right away. We can join ACT at any time when we reach the appropriate financial level.
- Based upon the wide range of people involved in supporting ACT, there would be some instant legitimacy by using them. John did however mention that our group already had credibility within the City based upon what we have done to date.
- A question had been raised as to whether AAA could recommend new members to the ACT Board of Directors. The answer is no. There is a set procedure for nominating new members that entails an established nominating committee.
I think that sums up the points covered in the meeting. I hope that Melynda and I covered what the rest of AAA members wanted. John would be pleased to answer any other questions if we did miss some.
We should discuss this avenue at our next AAA meeting, but I don’t think that any concrete action can be taken until we get our 501 c 3 status and start raising some funds (to generate even more an larger donations).
One thing that I want to alert all of the AAA Board to is that I have a working relationship with John through the Miracle league. He is on the Honorary Board of Directors that we just established. If that concerns any AAA member, I would be happy to recuse myself from the vote on whether to use ACT.