The Business of MADD

Posted by Lawrence Taylor on September 21st, 2009

As I've mentioned before, Mothers Against Drunk Driving is a huge, politically powerful prohibitionist organization.  It's also a very profitable one.  According to the required IRS annual reports posted on its own website, the organization makes about $50 million each year in contributions — about $12 million of which goes to professional telemarketers and "management".  That's the official report.  But an investigation by a Canadian newspaper into MADD in that country revealed that "most of the high-profile charity's money is spent on fundraising and administration, leaving only about 19 cents of each donor dollar for charitable works."

MADD is now further expanding its profitable prohibitionist horizons.


MADD Offers Virgin Drinks

Fox Charlotte, Charlotte, NC.  Sept. 21 — Mothers Against Drunk Driving is teaming up with Hill Street Marketing to offer a new line of alcohol-free drinks. That includes virgin Margaritas, Mojitos, and Pina Coladas, as well as a virgin Lager & Lime, virgin Red and White Wine, and a virgin Sparkling White Wine, according to a press release.

Hill Street is in discussions with retailers and the line is expected to arrive in a store near you this fall – just in time for the holiday season and holiday parties…


Hmmm….I wonder what the Internal Revenue Service will say about this?  MADD is a 501(c)(s) tax-exempt charitable organization, and charitable organizations aren't supposed to be making tax-free profits.  According to IRS regulations, a charitable organization is subject to tax on its "unrelated business income". 26 U.S.C. sec. 513(f).

For that matter, here in California and in many states, when a defendant is convicted of DUI he's required to pay fines, taxes — and make a contribution to MADD.  It's not an option: pay the designated amount or go to jail.   According to MADD's latest posted annual report, the organization made $4.4 million last year from these "contributions".  But…don't IRS rules require contributions to tax-free charities to be voluntary

Note:  The feared watchdog of charities, Charity Navigator, rates over 5,400 of the largest charities in the U.S. on the basis of how much contributed money goes to the supposed purposes of the charity — and how much goes to overhead (such as telemarketing and bloated executive salaries).  Charities are rated on a 4-star system, with 4 stars indicating a relatively high percentage of money going to the charitable purpose.  MADD's latest rating: 1 star.


(Thanks to Marty Capetz and Dan Jaffe.)
 

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