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Monday, Sep 21, 2020

New York's Attorney General Is Ordering The Black Lives Matter Foundation To Stop Operating Until It's Transparent With Donations

Following a BuzzFeed News investigation into donor confusion between the California-based foundation and the Black Lives Matter movement, authorities are stepping in.

On Monday, New York State Attorney General Letitia James ordered the Black Lives Matter Foundation, a California-based organization unaffiliated with the global movement to end police brutality against Black people, to stop collecting donations in the state due to its failure to file financial disclosures.

The move comes after BuzzFeed News reported that the nonprofit, which has only one paid employee and seeks to build relationships with police, was in line to accept millions of dollars from major corporations like Apple and Microsoft following the police killing of George Floyd in May. If the foundation did not submit the necessary financial documents, the state’s top prosecutor would launch an investigation into the organization, the attorney general’s office confirmed.

"Charitable organizations have the responsibility to ensure transparency in their operations," James said in a statement. "Soliciting donations in New York without registering or filing financial reports to the state could mislead New Yorkers who generously donate their money."

“I won’t allow the people of New York to be deceived by any organization, especially one that degrades the Black Lives Matter movement in the process,” she added.

Following the recent spike in donations to racial justice causes, New York officials have heightened their monitoring of potentially fraudulent groups and misleading causes, a spokesperson said. The state requires any nonprofit that receives substantial donations from New York residents to register with the Attorney General’s Charities Bureau to ensure that the funds are being used the way that donors intended. If nonprofits like Barnes’ are found to have solicited donations while unregistered, they could be fined or banned from operating in the state.

Robert Ray Barnes, a 67-year-old music producer in LA, created the nonprofit in 2015, two years after the acquittal of Trayvon Martin’s killer sparked the Black Lives Matter movement.

In interviews last month, Barnes told BuzzFeed News that he has nothing to do with the Black Lives Matter movement and accused its leaders of stealing his name. He also said he maintained a stream of donors, including corporations and individuals who send small checks to his foundation’s mailing address - a UPS store in Santa Clarita, California.

Barnes, who paid himself $24,000 in salary in 2017, would not disclose how much his foundation had raised over the past five years, though tax filings from 2017 - its most recently available - showed it had collected about $300,000. In interviews last month, Barnes said he had yet to implement any of his plans - which include community dinners with police and a bulletin highlighting positive policing stories - but insisted that his foundation was legitimate.

“Crime exists now and will forever continue, so we desperately need the services of the police; however, we need the services of good police,” Barnes wrote in one description of his foundation. “We need police officers that will respect all life equally and apply deadly force only when absolutely necessary. I know this may sound a little crazy, but what happened to warning shots and shooting unarmed fleeing suspects in the leg?”

The Black Lives Matter Foundation, which is currently unregistered in California, does not have any public website, drawing publicity from its name’s close approximation to the racial justice movement. Further confusing matters is that the primary Black Lives Matter organization, the Black Lives Matter Global Network Foundation, Inc., is not itself a registered nonprofit and uses several different names on its own website.

On its site, the movement uses the names “Black Lives Matter,” “Black Lives Matter Global Network,” and Black Lives Matter Foundation, Inc.” interchangeably. Megan Francis, a visiting professor at Harvard University’s John F. Kennedy School of Government, called that practice “confusing.”

“One of the lessons from this for many Black organizations is to be much more careful about who the intermediaries are and about branding and ownership of the name,” she told BuzzFeed News.

Barnes told BuzzFeed News that he was not aware he had to register his nonproft in New York and found the attorney general's involvement "very confusing" as well.

"I may suspect they like many others they may be confusing us with the many other so-called BLM organizations," he wrote in an email. "We will be looking into the situation. It is of course possible that we have received some donations from New Yorkers, yet, we have never directly solicited donations in New York or from New Yorkers."

Though the Black Lives Matter movement works with charity partner Thousand Currents to accept donations, it failed to differentiate itself from Barnes’ foundation. As a result, searching for the phrase “Black Lives Matter” in charity databases or on third-party fundraising websites led donors to mistake Barnes’ organization for the movement.

BuzzFeed News estimates that donors raised at least $4.35 million for the Black Lives Matter Foundation from the end of May through the first weeks of June, the bulk of which fundraising platforms froze before it could be disbursed. In some cases, fundraising sites like GoFundMe were unaware the foundation had no affiliation with the movement and froze funds only after being contacted by BuzzFeed News.

Employees at hundreds of companies also raised money for the Black Lives Matter Foundation. Some 200 companies, including Apple, Google, and Nordstrom, raised $4 million for the Black Lives Matter Foundation between May 31 and June 5 using Benevity, a popular corporate fundraising platform.

Benevity founder Bryan de Lottinville told BuzzFeed News that over the past three years, Benevity had collected and sent about $80,000 in donations to the foundation. In the first week of June, Benevity froze $4 million in donations to Barnes' nonprofit and has deactivated it from its platform.

Employees at the world’s largest companies and third-party giving platforms were not the only entities that confused the Black Lives Matter Foundation with the movement of the same name. Thousand Currents wrote on its 2017 and 2018 tax forms that it had sent a total of $90,130 over two years to the Black Lives Matter Foundation.

Solomé Lemma, Thousand Current’s executive director, disputed her organization’s own filings and attributed those designations to a paperwork error. She told BuzzFeed News that whoever prepared the paperwork confused the Black Lives Matter Foundation’s employment identification number with that of the Black Lives Matter Global Network. No funds were donated to Barnes’ foundation, she said, noting that the money was sent to local Black Lives Matters chapters for work in Black communities.

“We are working with our accountants on correcting this minor clerical issue,” Lemma said. “Black Lives Matter Global Network can confirm that the chapters received these funds.”

But when asked to confirm which chapters received the $90,130 designated to the Black Lives Matter Foundation over those two years, a spokesperson for the global network sent BuzzFeed News a list of grants to local chapters and other supported groups. None of the itemized grants, however, matched the $28,130 listed as having been given to the Black Lives Matter Foundation in 2017 or the $62,000 that was designated to the foundation in 2018.

A BuzzFeed News examination found that at least 18 charitable organizations, including the American Endowment Fund, Ford Foundation, and Network for Good, sent more than $360,000 to the Black Lives Matter Foundation since 2016.

Network for Good, a Maryland-based nonprofit and donor advising software platform, gave $100,000 to the Black Lives Matter Foundation in 2018 and more than $30,000 in 2019.

Despite the order, the Black Lives Matter Foundation was still listed on online donation platforms. Experts told BuzzFeed News that even when an organization receives a cease-and-desist order, it does not come with penalties and does not impact its standing with the IRS.

AmazonSmile, a site operated by the online e-commerce giant that donates 0.5% of the price of eligible purchases to the charity of a customer’s choice, for example, continues to list the Black Lives Matter Foundation as a nonprofit option. Amazon did add a disclaimer to the foundation’s page noting that it was not affiliated with the racial justice movement after being contacted by BuzzFeed News.

A California state directive suggests the Black Lives Matter Foundation should not have been raising those funds in the first place, according to the California attorney general’s office. After multiple warnings in 2018, Attorney General Xavier Becerra issued a cease-and-desist order last December to Barnes’ organization for failing to file annual financial reports required of tax-exempt foundations.

Once Network for Good discovered the California cease-and-desist order last year, it “immediately blocked the charity” to conduct its own investigation, Catherine Dunlop, Network for Good’s vice president of strategic partnerships, told BuzzFeed News.

A spokesperson for California’s attorney general told BuzzFeed News that a cease-and-desist prohibits an organization from operating or soliciting donations, and that the office is still looking into the matter. The office would not confirm whether it would be taking any further disciplinary actions.

“Donors who believe that they were misled should file a complaint with our office or directly request from the fundraiser or charity that their donation be redirected to another charity,” the attorney general’s spokesperson said. “Our office takes registration and reporting requirements for charities seriously."

Eric Ward, a philanthropy expert and the executive director of the Western States Center, called the California attorney general’s lax response “disconcerting.”

“It is surprising that California’s Attorney General and Secretary of State has not pursued this more aggressively particularly because of all the reported red flags,” he told BuzzFeed News, adding that the circumstances would “usually trigger a pretty rapid response and an investigation.”

In its current legislative session, California lawmakers have proposed legislation aimed at protecting donors from misleading charitable organizations by requiring that charitable donation platforms like Benevity and GoFundMe vet groups before including them on their sites.

“There is a gap here that is occurring in administrative oversight with charities and those loopholes need to be closed and should be closed immediately,” Ward said. He noted that if states don’t adapt their laws to match this current era of giving, “we will see this happen more and more.”

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