WASHINGTON—The ANCA Endowment Fund on April 14 released the following statement to its donors and the general public regarding ill-informed, unsubstantiated, and incorrect allegations made in a press release earlier this year by a privately funded non-governmental organization, Citizens for Responsibility and Ethics in Washington (CREW).
The ANCA Endowment Fund, Inc. would like to address allegations recently raised against it by Citizens for Responsibility and Ethics in Washington (CREW) a purported citizens’ watchdog organization based in Washington, D.C. Specifically, CREW has accused the ANCA Endowment Fund of having “indirectly participated in countless candidate endorsements” that were made by the ANCA Endowment Fund’s affiliated 501(c) (4) organization, the Armenian National Committee of America (ANCA). The only basis for CREW’s accusation is that the ANCA Endowment Fund and the ANCA occupy the same address and share certain common directors, and that the ANCA Endowment Fund made grant contributions to the ANCA totaling $200,000 in 2005 and 2006.
The ANCA Endowment Fund is quite disappointed that CREW has accused the ANCA Endowment Fund of engaging in prohibited political activity based on incomplete and misleading information. It is more than curious that its baseless attacks were made just prior to renewed efforts by the ANCA to advance Congressional and Presidential acknowledgement of the Armenian Genocide.
As a fundamental, threshold matter, the ANCA Endowment Fund does not and has not ever endorsed candidates or engaged in political campaign activity, whether directly or indirectly. The fact that the ANCA Endowment Fund and the ANCA occupy the same address and share certain common directors is neither proscribed under IRS rules nor sufficient under the law to attribute to the ANCA Endowment Fund the political activities of the ANCA or to threaten the ANCA Endowment Fund’s tax-exempt status.
On the contrary, it has been a longstanding position of the IRS and of the U.S. Supreme Court that a 501(c)(3) organization’s tax-exempt status is not jeopardized simply by being affiliated with a 501(c)(4) organization engaged in political activity that would be improper for the 501(c)(3) to engage in itself. This is true even if the 501(c)(3) occupies the same office space and shares the same directors as the 501(c)(4). What is important is not where the organizations are located or how many of their directors are common, but whether they have observed their separate corporate formalities and dealt with each other at arm’s length. There should be no legitimate dispute that the ANCA Endowment Fund and the ANCA have done so here, as demonstrated by the following relevant facts:
* the ANCA Endowment Fund is (and always has been) separately organized and incorporated from the ANCA;
* the ANCA Endowment Fund maintains its own records and bank accounts separate and apart from those of the ANCA; funds of each organization have always been segregated from each other and properly accounted for;
* the ANCA Endowment Fund owns the building located at 1711 N Street, N.W., Washington, D.C. 20036 at which its offices are maintained;
* the ANCA Endowment Fund rents office space within that 1711 N Street building to various other organizations, of which only one is the ANCA, and does so at market rates for all of its tenants; and
* the ANCA Endowment Fund and the ANCA pay for their own share of common costs, which are allocated to each in proportionately appropriate amounts.
In short, the ANCA Endowment Fund and the ANCA have consistently observed their own corporate formalities and dealt with each other at arms’ length. We believe this fact pattern leaves no basis for the ANCA Endowment Fund’s tax-exempt status to be threatened merely because it has some overlapping directors and the same address as the ANCA. Had CREW had the courtesy to inquire about the actual facts, it would have readily been able to ascertain that its allegations were baseless. Perhaps it did not want to be burdened by the facts.
As for CREW’s other complaint that the ANCA Endowment Fund made grants to the ANCA totaling $200,000 in 2005 and 2006, we believe that complaint is similarly misguided. There is no prohibition on the ANCA Endowment Fund’s making grants to the ANCA for proper purposes, and no group or individual has come forward with any specific example of any grant by the ANCA Endowment Fund to the ANCA made for any allegedly improper purpose. By contrast, we at the ANCA Endowment Fund stand firmly behind our 2005 and 2006 grants to the ANCA, which were made principally to fund the ANCA’s Capital Gateway Program, which is designed to promote the participation of qualified Armenians in national civic affairs, a purpose entirely consistent with 501(c)(3) activity.
We hope that this information addresses any concerns you may have had arising from the recent CREW allegations, and that it reaffirms your confidence in us.
As always, we thank you for your continued support of the ANCA Endowment Fund.