The New Kensington Salvation Army Corps has severed ties with the Westmoreland County United Way over a tax form dispute.
After more than a decade of giving grant money to the local Salvation Army, United Way has turned down an application for future funds due to the Army’s refusal to complete IRS Form 990.
The 990 is a 12-page form that certain federally tax-exempt organizations must fill out annually. It contains information about the organizations programs, mission, and finances.
Salvation Army Division Secretary for Western Pennsylvania Major Robert L. Kramer says because of its religious status, the Army is not required to complete the form under federal law.
“We’re not required to fill it out, and in many other places it has not been an issue,” Kramer said. “It seems that for this particular United Way, it has become an issue that the 990 must be done.”
President and CEO of United Way of Westmoreland County Bobbi Watt Geer says filling out the 990 has always been a requirement for organizations seeking grant funding, but the Army has consistently refused to comply.
“The requirements have not changed. This has been an on-going discussion with the Salvation Army about meeting the requirements,” Watt Geer said. “We have other religiously affiliated organizations who do receive funding through our grants process who are not compelled to complete an IRS 990 for the federal government, but they complete it so they can participate in this process.”
Kramer explained that filling out the form requires an external audit, which could cost around $7,000.
In the past, United Way has given more than $300,000 annually to Salvation Army branches, according to Kramer. In 2002, that figure was cut down to only serve the New Kensington center. Last year, the grant totaled $54,000, according to Watt Geer.
Kramer says these reductions were going to continue.
“This year they were looking at cutting us to a place of $10,000,” Kramer said. “We were receiving roughly $40,000 in comprehensive services, and that’s where we served the public with food, clothing, utilities assistance…basically those who found themselves in a hardship. That particular funding was being cut entirely.”
Because of these continuing cuts, Kramer said it was not reasonable to pay for an audit and complete the 990.
“If you’re receiving United Way dollars, particularly if it’s a large sum, it’s not as much of a concern [to pay for an audit],” Kramer said. “But if you’re receiving about $10,000, it just does not make sense to have that kind of expenditure.”
Kramer said there were no immediate plans on how the Army will cover the gap left by the United Way grants.