Charleston Waterkeeper loses nonprofit tax status

Cyrus Buffum, Charleston Water Keeper. File/Staff 2/3/2013

The grass-roots pollution watchdog of Lowcountry waterways is in tax trouble after failing to file required Internal Revenue Service paperwork.

But charitable donations will continue to be tax-deductible, according to people familiar with the situation.

Meanwhile, a critic of the Charleston Waterkeeper is questioning whether waters are any cleaner or being monitored.

The IRS has revoked the nonprofit tax-exempt status for Charleston Waterkeeper, but donors’ contributions continue to be claimable for tax deductions under a sponsorship by the Waterkeeper Alliance, and the local group is working to win back the status.

Meanwhile, the local group has begun to take water samples for prospective testing under a program its staff pilot-tested last fall to win state certification.

The group has been collecting contributions since the March revocation under a six-month sponsorship, which can be extended another six months, said Waterkeeper Alliance Director Marc Yaggi. “We’re confident they will have it fixed and will continue to do the good work they are doing.”

The Charleston group lost its nonprofit status after failing to file tax notices with the IRS for its first three years, 2009-2011, when it operated as a nonprofit under the alliance sponsorship.

It has not yet filed that notice for 2012, its first year operating under its own status, said Director Cyrus Buffum, but has won an extension until August. That notice is expected to be filed in the next 48 hours, said board member Laura Beck.

The group operates with a two-person staff, and its capabilities have been “very, very stressed” handling administrative work while starting up programs, Buffum said.

Ken Bonerigo, a marine mechanic who said he supported the group early on, said Waterkeeper officials should have informed their supporters and the public when the IRS status was revoked, and not continued to raise money until it was resolved.

“The Charleston Waterkeeper has been working for four years and hasn’t really done anything,” Bonerigo said. “(Buffum) should by going up into the creek where the polluters are, to check for pollution.”

Buffum said donors who requested notification were notified. Others were not, based on recommendations from the IRS and others about how to handle a filing problem he termed relatively common among new nonprofits.

The staff has been working to be certified to collect and test water samples, to establish the organization as a credible source to make pollution findings. That certification is pending, an S.C. Department of Health and Environmental Control spokesman said.

“We’re following protocol. We’re out (on the water) on a regular basis regardless,” Buffum said.

Yaggi said he has visited the local group twice in the past year and a half, and plans another visit shortly.

“I’ve seen the work they’re doing. I’ve seen it first-hand. They’re doing work that’s mission-related and mission-driven,” Yaggi said.

Tax-exemption filing troubles are common enough among nonprofits that the S.C. Association of Nonprofit Organizations recommends the groups keep and use a checklist of required annual filings, said Madeleine McGee, association president.

“People get into nonprofit work to do the work and not the administrative details,” she said. “The filing isn’t that difficult, but does require someone who is comfortable with that kind of work.”

Water and river keeper organizations are self-organized monitors of water quality, which operate under the auspices of the international alliance. The alliance has 200 local organizations. Because the groups monitor rivers and wider waterways, the various names reflect the area they watch.

Buffum almost single-handedly created the local group, working the community and others for contributions and sponsorships. He continues to be a presence at social events. Among other fundraisers, the group puts on an annual formal attire Waterball, which in 2012 raised $15,000. The 2013 ball was held in May and its net totals haven’t been published yet.

Buffum and the board declined to release details about the group’s revenues, expenses and operating budget Monday after requests were made. They said they will release the financial details in the tax-exemption filing once it’s approved by the IRS. That information is public.

Charleston Waterkeeper has created a database of local water dischargers and is outfitting a mobile, fee-paid sewage pump-out boat service under a federal grant administered by S.C. Department of Natural Resources, among other new programs, said board chairman Lindsay Nevin and board member Beck.

The staff “has done great things growing the organization from its infancy into the science-based organization I expected it to be as a board member,” Beck said.

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