After The Times questioned Film Independent's finances, the organization amended its two most recent tax returns to reclassify the festival and awards show as charitable services. They previously were listed as special events whose primary purpose was fundraising.
Charities -- known as 501c3 nonprofits, after their IRS designation -- must provide programs that are generally beneficial to the public, even if their specific services target a narrower segment of people. The 501c3 category includes educational and religious organizations, literary and scientific societies and groups that help the poor.
The changes in Film Independent's returns boosted its program-spending ratio -- the portion of its budget devoted to charitable services, a key measurement to nonprofit raters -- to about 75%.
"There's hardly anything we do that is not a service," said Dawn Hudson, Film Independent's executive director.
But Stamp, of Charity Navigator, panned the tax rewrite.
"All of a sudden, they decided their federal tax returns were false," he said. "It's a quick and dirty whitewashing of their financial forms."
In written comments to The Times, Film Independent's board president, actor-director Vondie Curtis Hall, dismissed Charity Navigator as an "inappropriate yardstick" for the nonprofit's accomplishments.
At the same time, however, Film Independent said the amended returns -- representatives termed them a correction of overly conservative accounting methods -- should warrant a Charity Navigator score of two or three stars.
The two organizations that produce the Academy Awards and Golden Globes need not worry about such ratings; they operate as a different type of nonprofit, a 501c6, rather than a so-called public charity. They are registered with the Internal Revenue Service as business associations.
The distinction is crucial. Unlike contributions to 501c3s, donations to business associations and many other types of nonprofits typically are not tax-deductible as charitable gifts. Tickets to the Oscars, for example, cannot be written off as a contribution to good works.
'It doesn't look good'
The Times examined the last two available tax returns for seven movie-related nonprofits, with a focus on the amount of money that they spend on program services, salaries and other administrative costs, as well as awards shows.
