Tax dodge, anyone?
Anything goes at the Kansas City Star these days – our so it would appear. As the saying goes, a drowning man will clutch at a straw. Meaning, as the Cambridge Dictionary puts it, “someone who is in a very difficult situation…will take any available opportunity to improve it.”
So it is that an unsettling new story in Sunday’s newspaper ran under the headline, “Subscribe or donate: Help KC Star keep covering coronavirus.”
A deeper dive reveals that unlike most news stories addressing business issues involving the newspaper, this one ran sans a reporter’s byline.
“BY THE KANSAS CITY STAR,” it reads.
Very unusual.
In a nutshell, the story beseeches locals to subscribe to the newspaper or “even better, you can suggest friends and neighbors do the same.”
And while that sounds pretty tame, in the words or Bachman Turner Overdrive, you ain’t seen nothing yet!
“If you’d like to help and you’re a subscriber, you can now make a tax deductible donation to preserve local journalism,” it reads. “We have partnered with the nonprofit Local Media Foundation, which is accepting contributions on our behalf.”
Hold it right there.
What’s a fishy-sounding non-profit in Lake City, Michigan doing for a for-profit biz like the Star?
Good question, says a Kansas City attorney who was dumbfounded by the concept.
“You’re not buying a subscription to the Star, you’re donating to the Local Media Foundation which is a non-profit, which takes your donation and siphons it off to the Kansas City Star – which is a for profit company – and you get a tax deduction for it,” the attorney says. “What kind of bullshit is that?
“I mean, how can you use a non-profit to give money to a company that is for-profit and you get a tax deduction?”
A check of the Local Media Foundation’s website and most recent tax returns reveals that its so-called mission statement is “to educate and guide media companies through their digital transformation” and “is intensely focused on helping local media companies discover new business models that will support and sustain local journalism.”
The $64 billion question:
What in the above “mission statement” has anything to do with turning a for profit venture like the Star into non profit?
“Their mission is to give these for-profit companies advice on business models,” the attorney notes. “This is not giving them advice, this is providing them a conduit for money. This is unbelievable. And that’s not what their mission states, and when you’re a 501-C you have to abide by your mission statement. When you’re tax exempt there are rules that you have to abide by or you’ll lose your tax exempt status.’
There’s more.
“Here’s another issue,” the attorney says. “What service is that media company providing to the Kansas City Star? Because if all they’re doing is providing money to the to the (newspaper) – soliciting donations – what else are they supposed to be bringing to the table here? I mean, anybody can solicit money – anybody can do that – what other services are they providing to the Star? It just sounds lame.”
Missing in action is what percentage of the donations will accrue to the newspaper.
“When I give money to a charity, the first thing I ask is how much of my money is actually going to the targeted organization,” the attorney says. “Like if I donate $100, how much is the Kansas City Star going to get? I mean, if I donate $100 and the Star only gets $10, I wouldn’t do it. I think that’s public information they have to provide.”
A check of the website givebutter identified in the Star story, reveals that as of late Monday, 87 people had donated just over $7,000 to the, um, cause.
The Star’s magic number: $200,000.
The site is identified as, “The Kansas City Star Covid-19 Local News Fund.”
“The pandemic has brought layoffs, furloughs and salary reductions to newsrooms large and small,” it reads. “We’re fighting to hold the line, like many local businesses, and so far we’ve done so thanks to your readership and support via digital and print subscriptions.
But it’s a steep hill, and we’re thinking creatively about how to climb it.”
Creatively? Seriously?
That’s certainly one way to describe it.
Another might be tackily.
Especially given the placement of the Star’s money grab Sunday, right next to the heartbreaking story about a Kansas City woman who died tragically after contracting the virus in her work as a nurse at Research Medical Center.
“I find that really tacky,” says the attorney. “I mean, here’s this poor woman who died and they’re trying to make money off her misfortune.But it’s not a non profit cause – that’s what gets me – and they made the horrible decision to put it right next to the story about the woman who died.
“It’s not just tacky – it’s more than that – it’s manipulative and opportunistic.”
Stay tuned.
(For more Hearne, go to http://kcconfidential.com)