The activist group Black Lives Matter (BLM) shut down all online fundraising Wednesday night due to an ongoing California Department of Justice warning that the group may lose their tax-exempt status if they don’t file delinquent proper tax forms and fees by the end of March.
According to a letter written by state Attorney General Rob Bonta on Monday, the Black Lives Matter Global Network Foundation (BLMGNF) had failed to pay the Californian Registry of Charitable Trusts renewal fee and send in the IRS 990 financial activity disclosure form, as well as similar RRF-1 California paperwork, for the 2020 fiscal year. While BLM switching over to being listed as a charity in the middle of 2020 and hectic leadership changes in the past year likely played a role in the group not filing, the state said that there was no excuse for not filing and that if if don’t correct it all in two months, the group faces large fines as well as the loss of their tax-exempt status.
“The organization BLACK LIVES MATTER GLOBAL NETWORK FOUNDATION, INC. is delinquent with The Registry of Charitable Trusts for failing to submit required annual report(s),” said Bonta’s letter earlier this week. “An organization that is delinquent, suspended or revoked is not in good standing and is prohibited from engaging in conduct for which registration is required, including soliciting or disbursing charitable funds.”
Following news on this Wednesday, as well as a similar demand in January for tax documents coming from Washington state, the BLMGNF shut down all online fundraising Wednesday night. While there was no official word on how long it would be shut down, the group hinted in a statement that it would be until all delinquent forms and fines wee both turned in and paid in both California and Washington.
“We take these matters seriously and have taken immediate action,” said the BLMGNF in a statement on Wednesday. “We have immediately engaged compliance counsel to address any issues related to state fundraising compliance. In the interim, we have shut down online fundraising as we work quickly to ensure we are meeting all compliance requirements.”
With BLM now unable to disperse any funds or receive any donations until the matters are fixed, and remaining BLM leaders now being held personally responsible should the matter not be settled by next month, many familiar with the situation noted that the group would likely satisfy the requirements in time to avoid the embarrassment of having their organization losing their status.
“Having the state pull you out of being a charity and removing your tax-exempt status is a real blow for any group,” explained Patrick Sanders, an LA-based accountant who helps non-profit organizations prepare taxes, to the Globe on Wednesday. “They can’t get money, they can’t move money around, and now donors and others who are for BLM and its mission might see it get raked over with taxes and national embarrassment for not being financially sound. And for potential donors, who now have more localized activist groups to donate to for the same purpose, many will see this as a problem even when they return to online fundraising.”
BLMGNF is expected to turn in all necessary documents by the March 31st deadline.