CAPR 173-1 Revised - No Local Deposit of Donations

[RADIOMAN015]

Hmm, interesting to note that now ALL donations (checks) that the unit gets now has to be sent to the appropriate wing headquarters for deposit  (paragraph 15).

Now I've got to wonder, what is the REASONING behind this little kicker?   Units can deposit all other funds locally and basically report deposits as to the category anyways.

Anyone care to offer an explanation on the WHY of this?
RM

[arajca]

Probably to make sure appropriate tax records are filed.

[lordmonar]

Probably to make sure appropriate tax records are filed.

+1

Please, let's not start up any more Wing Banker --They're going take all our money-- conspiracies.

[desertengineer1]

Hmm, interesting to note that now ALL donations (checks) that the unit gets now has to be sent to the appropriate wing headquarters for deposit  (paragraph 15).

Now I've got to wonder, what is the REASONING behind this little kicker?   Units can deposit all other funds locally and basically report deposits as to the category anyways.

Anyone care to offer an explanation on the WHY of this?
RM

It's been policy for most wing and regions for a while now.  The reasons are accountability, and that there are many wings out there pushing the limits with respect to the rules.  Reg changes are usually the results.  Think of some of them as reg versions of TO cautions/notes/warnings.

[Eclipse]

Not all units can deposit locally, anyway.  Unless you have a branch of the same bank the Wing uses for WBP, you were SOL anyway. 
I know when they set up the WBP that was a major hassle - finding a bank with branches everyone could reasonably touch, and in the end it didn't mean much to most units.

So put a stamp on an envelope and move on - for most units this is going to be a few checks a year.  More work for the downtrodden WA's, less trips to the bank for the unit FM's.

[RADIOMAN015]

So put a stamp on an envelope and move on - for most units this is going to be a few checks a year.  More work for the downtrodden WA's, less trips to the bank for the unit FM's.

Of course surely that's a great explanation, as to WHY.  Makes no difference how many checks or if no checks.  I think there may be an IRS requirement for a letter of acceptance given to the donor if the donation is $250.00 or more, but under that amount there's no requirements and therefore, the WHY of this requirement needs to be addressed.   
Since squadron units are "self funded" at this time, I still fail to see what benefit the Wing Bankers program has to the local level and I think most of the "smart" members in CAP, are still skeptically awaiting the benefits of the so called "unqualified" audit. 
RM

[FW]

^If you read the "comment letter" that is published with the new reg, you will read this:

Para 15. Donations. "All donation checks must be sent to wing HQ for deposit."
This imperative should be rewritten to allow units to deposit cash or check donations directly into a wing bank account when the wing provides deposit slips.

Response: Although it certainly is easier to deposit checks locally, donation checks frequently require the wing commander to provide a letter to the donor. When the deposits are made locally the commander frequently does not have sufficient information to comply with this requirement in CAPR 173-4. We have found many instances where confirmation letters are not being remitted to donors.

Now you know the "why". 

Since squadron units are "self funded" at this time, I still fail to see what benefit the Wing Bankers program has to the local level and I think most of the "smart" members in CAP, are still skeptically awaiting the benefits of the so called "unqualified" audit. 
RM

If our leadership continues to ignore what is demanded by those at the unit level, there really won't be any benefit to having an "unqualified audit".

[Eclipse]

Of course surely that's a great explanation, as to WHY.

The "why" is easy - because NHQ said so, and considering the effect at the local unit level is essentially zero, why burn calories trying
to find some conspiracy? 

I still fail to see what benefit the Wing Bankers program has to the local level

Hm...less reporting, no hassle with a local account, ease of payments and reimbursements, no worries that someone locally with the keys is going to make off with the money...

...and not a single negative in any wing following the program rules without local embellishment.

I can understand why you are confused.

[RedFox24]

Having read a lot of the Wing Banker threads, post and such I have to agree that a lot of the talk is nothing more than "conspiracy theory talk".  I have to have been one of the biggest skeptics of the program sense I am one of those members/units the furthest away from my Wing HQ were you can't watch and see what goes on and as a result of a lack of communications or just being out of the loop generally have not trusted my past Wing officers to do their jobs. 

But Wing Banker does work; it does cut out all the paperwork and hassle that a unit CO or FM had to deal with prior to Wing Banker.  Life is much earlier from those standpoints.  I have never had a problem with checks, deposits or reimbursements.  It works.  It seems much slower when the checkbook is out of your hands but it works. 

However, all that being said, my biggest fear is that I don't trust in a general the program or in a specific case one members of the Wing FM committee.  I feel that I have good reason not to trust them based on past Wing CC and FM abuse and in the specific case the committee members actions prior to being put on the committee.  But Wing Banker should and has kept thing above board and legit to this point in all my dealing with it. 

But I still have the fear in the back of my mind that one day I will wake up and our account will be cleaned out or significantly reduced to help pay for something that someone at Wing or on the Wing FM Committee deemed more important or was not fiscally responsible for and because we have money they will take it.  I don't think it will happen but like the cat that has been kicked every time the owner comes home I am always a little skittish that something is going to happen when I hear the door open.  And the longer the program goes on, the more trust I have of the people involved and the program itself is working as it should. 

[RADIOMAN015]

But I still have the fear in the back of my mind that one day I will wake up and our account will be cleaned out or significantly reduced to help pay for something that someone at Wing or on the Wing FM Committee deemed more important or was not fiscally responsible for and because we have money they will take it.  I don't think it will happen but like the cat that has been kicked every time the owner comes home I am always a little skittish that something is going to happen when I hear the door open.  And the longer the program goes on, the more trust I have of the people involved and the program itself is working as it should.

Interesting you bring this up, because the question has come up in our unit -- if wing decides to do an assesment to the squadrons, would it likely just be transfer of the funds with just a notification or would units have to concur?  IF you hold the checkbook and write the checks if there's a disagreement, until resolved the money is still in the units acount, not so with wing banker.  I don't see anything in the regulation that 'protects" units from "raids".  Am I missing something?

I think legally units might be able to "bullet proof" their account from a raid, at least member dues wise, by having all members agree to calling this  restrict donations to be used specifically for the operation of the unit and to specify what specific expenses the funds can be used for and the unit could just give a memo to wing hdqs with all the members signatures.

BTW regardless of what CAP leadership thinks there are individual statel laws regarding non profit financial operations and IF members are concerned about any assessment being taking without the unit's permission, they could complain to the state (generally the Attorney General's Office).  So IF I were any wing thinking about just taking the units money without specific permission, you just might find yourself answering some tough questions from an investigative agency

Also interestingly I checked about 6 State websites to see who the registered resident agent was for Civil Air Patrol Inc as a foreign corporation operating in those states, and could not find an entry for CAP, so there may be some state compliance issues not being met. 
RM

[RedFox24]

If your worried about donations, have your donors specify how the money is to be used and where in a letter to the unit and to the Wing CC/FM.  Asking our donors to designate is how we have handled that issue you bring up.  Then there is a papertrail if you feel you need one.  It also allows us to demonstrate how the funds were used when the donor comes back next year and wants to see where their money was used. 

I think from reading the reg, wing cant take money out of your account without the unit authorizing it.  That is the way I have it and understand it.  Again my fear is not the process, but the people involved.  I trust the process but not the people.  And yes I feel I have a very good and legitimate reason not to, if that person was not in the process I would have no reason to worry at all. 

As to the rest of your post, I have no idea and really am not worried about any of that.  If there is a problem, then that is between the State SoS, AG and NHQ CAP.  Note that I, my unit or my members are not in that loop. 

[lordmonar]

q. All wings will establish and maintain consolidated checking and savings accounts designated for the units below wing level. Checking account interest on subordinate unit accounts may be used to defray wing administrative costs of the Wing Banker Program. Interest and dividends on unit savings, certificates of deposit and investment accounts will be allocated at least quarterly. Except for unit deactivation, wings will not be permitted to co-mingle wing funds with subordinate unit funds nor use subordinate unit funds for any purpose not approved by the subordinate unit.

Once again......the wing CAN NOT take unit money with out either getting their permission or deactivating the unit.  This is not new.

About the only complaint I have heard about the WBP is slow payment.  AFAIK no unit has ever had monies disappear into the wing's coffer.

[Ned]

Greetings bunkhouse lawyers,

You are generally describing the concept of a "restricted gift" in which a gift is given to a charitable organization but the donor restricts the purposes to which the gift can be used; and if the charitiable organization attempts to use it otherwise, the gift reverts back to the donor.

Basic first-year Property Law stuff in law school.

In the CAP context, however, you're gonna find that in the great majority of states, donors do not have standing in court to enforce the restriction unless they have a written instrument of donation that contains a right of control over the gift (usually the right of reverter).  Otherwise the donee is free to use the gift as they choose.

And here's the kicker - any such donation has to be specifically accepted by the donee, including acceptance of the right of reversion.

So, if a corporate officer hasn't signed off on the donation and specifically noted the reverter, then it will have no effect and CAP, Inc. is free to use the gift without restriction for any lawful purpose.  There is no such thing as a unilateral restriction on a gift that is not agreed to by the donee.

Just sayin . . . .

Ned Lee
(Former CAP legal officer)

[N Harmon]

And here's the kicker - any such donation has to be specifically accepted by the donee, including acceptance of the right of reversion.

But isn't that easily accomplished by placing the restriction in the memo field of the donation check? Or better yet, putting verbiage on the back to the effect that "Endorsement constitutes acceptance of gift restriction"?

[RedFox24]

Greetings bunkhouse lawyers,

then it will have no effect and CAP, Inc. is free to use the gift without restriction

Ned Lee
(Former CAP legal officer)

Ahhh.   There is the problem.  CAP Inc.  Thanks Cowboy 

[Eclipse]

For those who think that the are somehow "protecting" money from Wing through restricted funds, be warned, this is a double-edged sword.

Its one thing to receive a memorial scholarship fund, etc., but units that restrict the funds at too fine a level may well wind up being bankrupt with money in the bank they can't spend.

As Lord says, short of malfeasance, the corporation can't just "take" money from a unit any more (or less) now than they could before the
WBP.

[RADIOMAN015]

So, if a corporate officer hasn't signed off on the donation and specifically noted the reverter, then it will have no effect and CAP, Inc. is free to use the gift without restriction for any lawful purpose.  There is no such thing as a unilateral restriction on a gift that is not agreed to by the donee.

Just sayin . . . .

Ned Lee
(Former CAP legal officer)

So legally anyone who is paying dues to support their squadrons' operations still could be SOL if a wing decided on some sort of  assessment (and I'm not talking about bank charges).

BTW do you know what state CAP is actually incorporated in, because the Alabama state site only shows the education foundation and not CAP as a whole?

Also I always thought that any foreign corporation (profit or non profit) operating in a state they are not incorporated in has to have at the very least a resident agent with an appropriate physical address in the state so that in the event of legal process, it can be served at that address?  Apparently this isn't so??
RM

[Ned]

But isn't that easily accomplished by placing the restriction in the memo field of the donation check? Or better yet, putting verbiage on the back to the effect that "Endorsement constitutes acceptance of gift restriction"?

Generally not.

These kinds of notations on checks normally do not constitute effective notice and do not qualify as the kind of written instrument required for a donor's standing to sue in the first place.

And remember, only corporate officers can bind the corporation, and I doubt the wing commander is personally endorsing checks in any event.

Ahhh.   There is the problem.  CAP Inc.  Thanks Cowboy .

Since CAP was formed, there has  only been one CAP - not a confederation of thousands of "little CAPs" (aka squadrons).  That's no different than the Red Cross, Scouting, the VFW, or any other major charity.

There are no black helicopters here.



Ned Lee
(Former legal officer)

[ZigZag911]

Strange as this may seem, my experience (multiple decades, before and since WBP) has been that wings & groups have given funds to needy squadrons, rather than trying to take it away from prosperous ones.

[Eclipse]

So legally anyone who is paying dues to support their squadrons' operations still could be SOL if a wing decided on some sort of  assessment.

Legally?  Its not a "legal" issues, per-se, and it has nothing to do with the WBP.

Every nickel collected by CAP in every account is corporate money.  The corporation can take whatever they want from whomever they want, subject to internal rules.  This is the way its always been, with no change because of WBP.

If a wing, for some reason, decided to start assessing charges to units, they would have to pay, period, whether its an accounting transfer within Quickbooks, or a check from the unit to the wing.

Ever heard of a wing doing this?  I sure haven't.