Earlier this week we told you that the House Ways and Means Committee is trying to force nonprofits to be more “effective” through a new tax plan. Thanks to Lady Gaga, the Committee has a new example of why such a tax plan is needed. Yes, Lady Gaga.
Lady Gaga and her mother co-founded the Born This Way Foundation, a 501(c)(3) whose mission is to foster a more accepting society. The Foundation’s 2012 Form 990 has become recent internet fodder. It shows that the organization took in $2.66 million, but paid $406,552 in legal fees, $300,000 for “strategic consulting,” and $150,000 for “philanthropic consulting,” among other seemingly operational expenses.
These expenses certainly seem high, but are some critics jumping too quickly to entertaining conclusions? For example, bloggers are scrutinizing the Foundation for only giving $5,000 in grants, but, as Lady Gaga’s mother explained, the Foundation operates its own program sand is not a grantmaking organization.
Regardless, donors want charities to be transparent in how they are spending their money and how the expenses further their charitable purposes.