Local nonprofit for police announces closing after not donating to police department

WAXHAW, N.C. (WBTV) - A local non-profit says it’s shutting down, months after a WBTV investigation prompted elected leaders to question how the group was spending the money it raised.

The Chair of the Waxhaw Police Foundation wrote in a statement that they will work with an attorney on winding down and dissolving the charity.

The decision came a little more than a month after Town of Waxhaw elected officials decided voted to force financial transparency from the Foundation.

WBTV’s investigation found that despite holding fundraisers and accepting contributions, the Foundation hasn’t made any donations to the Waxhaw Police Department or Town.

Emails obtained by WBTV through a records request show a rocky relationship between town leaders and the Foundation’s Board Chair, Candace Definis. DeFinis and the Foundation tried to gift an ATV to the Police Department, but emails show town leaders required the non-profit to provide its financials and get town commission approval in order to make the donation.

An email from DeFinis to the police chief said “leaving you(r) office in an emotional state.”

“That meeting probably didn’t go as well as some of you that may have watched the WBTV segment on that. She left and she was quite upset,” Waxhaw Mayor Ron Pappas said during the town commission’s January 24th meeting.

During the January meeting, commissioners authorized town staff to look for ways to enforce financial transparency from the Foundation. Town staff hasn’t reported back on what those options look like.

In a previous statement, a town spokesperson said the Foundation is required to disclose financial information and “as of January 9, 2023, the financial records have not been released.”

“It’s a simple document that should have been made available. I can’t understand or get into why they wouldn’t provide that,” Commissioner Pedro Morey said.

WBTV kept digging and found the Town of Waxhaw isn’t the only government entity not getting records.

A simple search of IRS records shows the Foundation hasn’t filed its required Form 990 since tax year 2020.

WBTV went to David Heinen with the North Carolina Center for Nonprofits for answers about what’s required of non-profits to retain their tax-exempt status with the IRS.

The Center for Nonprofits operates like a chamber of commerce for charities and advocates for policies and legislation to help their operation.

“If a 501C3 is not making donations could that put their status in jeopardy?” a WBTV reporter asked Heinen.

“They could technically be in violation of the governing documents and federal tax law. Having said that, the IRS has very little capacity for enforcing things against nonprofits.

But Heinen says there is an automatic revocation process for one situation, if a 501c3 doesn’t file a form 990 for three straight years.

“That is the one way that the IRS is very good about revoking tax-exempt status,” Heinen said.

The Waxhaw Police Foundation hasn’t filed a Form 990 since tax year 2020.

DeFinis wrote in an “Our Board has reached out to the Town of Waxhaw to let them know we have taken a vote to Dissolve our Foundation. We have obtained legal counsel to assist us as we work on the steps of dissolvement.”

She also said the Foundation had not heard from town about releasing financial records since the commission meeting in January.

In January, WBTV interviewed Edwin Elam about his donation to the Foundation. Elam had also requested records of the Foundation’s financials but said he hadn’t received them.

WBTV asked Heinen whether Elam and other donors could get their money back if the Foundation loses its tax exempt status or shuts down.

“They would have to go to the court system would be difficult,” Heinen said.

Heinen said when a 501c3 dissolves it must transfer its remaining assets to another 501c3 or the federal, state or local government for a public purpose. DeFinis wrote in an email the Foundation has not decided where to donate the remaining funds.

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