Wednesday, January 04, 2006

What You Should Know About the National Heritage Foundation

Yesterday I posted on a discrimination lawsuit brought against 5 Katrina housing websites including I'm not particularly surprised that some people refused to offer housing to blacks, gays or non Christians but I was surprised by the reaction of Then I did some research. The founders are Seventh Day Adventist but even more interesting is that the site is a foundation with the National Heritage Foundation. Now this is an interesting outfit. It's stated purpose is to return the US to its national heritage of individuals helping one another and not the government doing so which I'm sure is a strongly held belief by the founder but it is really all about taxes.

NHF is an umbrella foundation for over 9,000 foundations. Here's how it works. Anyone can register as a charitable foundation for a fee of $285. Once approved (you can Not promote atheism, violence, or undermine the freedoms guaranteed in the Constitution) you receive 501(c)(3) tax status. All donations that you raise for your charity goes to NHF and of course are tax deductible. NHF takes 2.5% of each donation (more in some instances) for themselves and also hold and administer all funds.

Now when they say anyone that is so true. You want to protect grandma's assests? Register her as a charitable foundation. You want to be rid of property taxes? Register yourself as a charity and donate your property to your charity. Plus you can pay not only yourself a yearly salary but also family members and anyone else for that matter. NHF offers Donor-Advised Funds, Charitable Gift Annuities, Charitable Remainder Trusts and Pooled Income Funds. As they say " you can donate anything of value to your Foundation and receive a tax deductible receipt from us" including propery, cash, stocks, bonds and life insurance and get tax benefits. Depending on what type of "giving opportunity" you set up you can avoid inheritance tax, take a charitable deduction for federal income tax purposes and avoid capital gains taxes to name a few examples. Simply put unlike similar funds," the donor-advised funds offered through NHF allow individuals to use income generated by a fund to reimburse themselves for their role in disbursement decisions."

NHF was founded in 1968 by J T Dock Houk to basically take advantage of the '69 Tax Reform Act. The IRS put NHF out of business in 1983 for tax violations but they sued the IRS, won and was back in business in 1987. They've been building ever since. In 2003 their net assets were $180 million.

Houk's bio is an interesting read ....
  • An heir to the Mead Corporation fortune
  • Played full time on the Tennis Circuit
  • Taught at Jerry Falwell's Liberty College
  • Methodist
  • Charity Entrepreneur
  • Republican
NHF has had it's problems.....
It was under Senate scrutiny last summer
From The Joplin Globe..."The National Heritage Foundation, a controversial non-profit organization that has come under fire for helping its clients help themselves to tax breaks, has dropped the Church of Israel at Schell City as a designated charity. A spokesman said the Virginia-based foundation would not knowingly support any racist or anti-Semitic group, and that the Southwest Missouri whites-only church was dropped for fear of offending its Jewish clients."
That and the IRS guidelines prohibit discrimination based on race.

NHF obviously has its critics....

From the NYT...
"It's like paying the Girl Scouts to sell cookies," said Jack Shakely, president of the California Community Foundation. "It's not illegal, but it just doesn't pass the 60-second smell

From The Granstmanship Center.....
In 1999 Tax lawyer Victoria Bjorklund,who has been compiling a list of questionable
new “charities” said this about NHF: “The good news is, outfits like that are few and far
between. The bad news is, they ruin things for everybody else."

As far as the 9,000 foundations....I could not find a list but if you do a google search it is quite an eclectic bunch....I would say menagerie. Foundations focus on anything from golf tournaments, to animal groups, to christian music, to art, pain, children, orphans, international causes, christian literature and of course Hurricane Katrina. A good number are Christian oriented but it is difficult to know what percentage. And the NHF site does put forth Christian ideals and has a smattering of Bible quotes.

So back to
The 3 founders are Latter Day Saints and the site is a NHF foundation which raised some questions in my mind. Just how closely do they follow Mr. Houk's NHF philosophy? He doesn't think much of volunteerism....He calls volunteers Dregs (ie its wrong to do something for free when you could be getting paid plus you're crippling America). So I thought I'd at least check if anyone was taking a salary or disbursements.
LDSMag states that "Winkdesign donated the design of the site." I called WinksDesign and spoke with owner Chad Winks. He informed me that Paul Wilson the spokesman for and registrar of the site is a tech consultant for WinksDesign. But Mr. Winks states they donated their services and did not take a disbursement.

LDSMag states MyTechSupport offered the offices that are being used as a command base for The founders of are the Owners of MyTechSupport.
I spoke with Paul Wilson who is also a Latter Day Saint. He stated MyTechSupport did not take any disbursement either. He stated they joined NHF because it was an "amazing organization that provided alot of counsel" and helped them get up and running fast.

Sounds like these guys are "Dregs" pulling down America.
Snark aside and in all honesty I was left with the impression that these young men have done nothing nefarious as regards finances.

What does trouble me is the growing role of religion in charity organizations. National Heritage Foundation is subtle (compared to others) about it's religious leanings yet it is there. And there is no doubt faith based groups took the lead in Katrina relief as the government blundered. They will come out of this with greater power and even prestige. But it must always be remembered they have an agenda. And if you are gay or not Christian it doesn't bode well for you. If the Big One hits San Francisco will faith based groups help those in the Castro? I doubt it. One can make numerous similar analogies regarding social services. I wonder how many Americans realize what is coming and just how great a threat it is to civil rights. Do they even care?

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