February
4, 2009
Dear Supporter of Bidder #70 (Tim DeChristopher),
Thank you very much if you made a donation to support Tim DeChristopher as Bidder #70. Tim’s
action of bidding in the Bureau of Land Management’s December 19th Oil and Gas Auction was a singular act
of creativity and non-violent protest that sparked interest around the world. On behalf of the Center for Water Advocacy (CWA)
we wanted to help Tim as well. Thus we agreed very quickly to have your donations come to us and be placed under some projects
which Tim would control consistent with CWA’s not-for-profit status.
CWA approaches its responsibilities to CWA in a very pro-active manner when it comes to conservation and is
equally very cautious when it comes to filing required reports with the Internal Revenue Service (IRS). CWA and Tim were all
very surprised at the overwhelming positive response to help Tim by making donations. As the dollar amount of donations increased
we began a conversation with a tax attorney, and eventually received a letter from him which gave us a cautious analysis of
whether the donations made to CWA for Tim’s projects would create any problems for CWA and its 501(c)(3) charitable
status.
As with many areas of the law, there is no clear-cut answer. But,
continuing our cautious approach, we wanted to contact you with the following information:
- None of your donations have been spent by CWA on any of
the projects Tim DeChristopher is overseeing. We have received an invoice for a travel expense to meet former Secretary of
Interior Kempthorne, expect to receive a bill for the tax analysis, and have generated bookkeeping expenses related to the
significant number of individual donations received by CWA and other similar administrative expenses.
- We cannot indicate to you that if
you made a donation, it is currently tax deductible. There may be a pathway by which we could
argue to the IRS that the nature of the projects with which Tim is involved are consistent with a charitable purpose. However,
we are a small organization and could not afford a long legal entanglement with the IRS.
- Because of the foregoing uncertainty, at least two alternatives are available to you:
a. If your primary purpose is to assist Tim DeChristopher in his efforts as Bidder No. 70, and if it is not
important to obtain a charitable deduction for your contribution, you may choose to have your contribution continue to be
used for that purpose. In that event, the funds will be transferred to a separate entity not affiliated
with CWA to be used for its intended purpose as part of the legal defense or lease purchase efforts. No
letter will be forwarded from CWA indicating that this contribution is tax deductible; or
b. If a charitable or tax deductible donation is important to you, you may request a return of your
donation, minus any Pay Pal transaction costs.
If you made a donation between December 21, 2008 and February 3, 2009, you should have received
this letter in the mail, with a postage- paid postcard, which we requested be returned to
us within 30 days.
Because of the
time sensitive tax nature of the potential tax issues involved, if we have not received a response from you within 30
days, we will assume that you acknowledge that you will not receive a charitable deduction for your donation and your
donation will still be used to assist Bidder 70’s legal and/or lease purchase efforts.
CWA is dedicated to protecting and conserving our public lands particularly from oil, gas, and mineral
exploitation. We believe there will be future social activists who may well take actions like Tim’s. As a 501(c)(3)
organization we cannot, and do not, advocate any illegal actions.
Our experience since the December 19th Oil and Gas Auction has been amazing and reaffirming.
It is encouraging to know there are individuals and organizations like yourself who clearly understand our need to
act now to save our planet. We thank you for your support.
Sincerely,
Harold
Shepherd
Director, Center for Water Advocacy
