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lawyer regular, consultants perplexed about how nonprofit tied to Duggan operates

Joe Guillen and Kat Stafford, Detroit Free Press

Free Press investigation

while Wayne State school officials insist that the Make Your Date nonprofit — below scrutiny for its ties to Mayor Mike Duggan — is dormant and inactive, the Michigan legal professional universal is questioning the corporation's nonprofit reputation and has been unable to get any solutions for essentially three months.

The attorney general's workplace wants to find out about Make Your Date's fundraising practices, including why it isn't registered with the state to solicit charitable donations and the place the donations ended up, the Free Press has realized.

The newspaper's evaluation of Make Your Date’s budget, organizational statistics and fundraising actions shows that Make Your Date used its nonprofit repute in some situations, including obtaining a federally issued logo used prominently in its charitable solicitations.

a number of experts say Make Your Date's set-up is complicated. After reviewing financial files got by using the Free Press, they said it's difficult to reconcile claims of a dormant, inactive nonprofit with annual fundraisers Make Your Date has held and also its automatically updated registrations with state and federal businesses that suggest nonprofit actions.

The Duggan administration and Wayne State college officers had been vehement of their positions that Make Your Date is utterly a university application and that the nonprofit — which happens to have the same name — is dormant. The organization goals to avoid preterm delivery in Detroit.

the debate over Make Your Date's nonprofit popularity comes while the Detroit office of Inspector general investigates whether Make Your Date acquired preferential treatment from Duggan and the city. The probe was launched closing month after a Free Press investigation confirmed the city directed $358,000 in federal can provide to Make Your Date and Duggan ordered a metropolis-led fundraising effort for the program.

Days later, Michigan legal professional common Dana Nessel's workplace confirmed that it, too, became reviewing issues raised via the Free Press investigation.

The workplace's queries into Make Your Date begun with a Feb. 13 letter seeking clarification on its registration with the state. The letter to Hassan requested a reply inside 30 days however went unanswered. The office sent a observe-up letter on April 22 reminding the nonprofit to respond and advising that it's against Michigan law to carry funds devoid of relevant registration. 

Make Your Date investigation

The workplace observed its overview of Make Your Date’s nonprofit fame could ratchet up if it again fails to reply.

“The base line is, in the event that they choose no longer to reply to the 2d letter, that appears to be defiant,” spokeswoman Kelly Rossman-McKinney referred to. “it could truly ramp up their activity.”

The Free Press began inspecting Make Your Date's operations and funding a number of months in the past, after feasible battle of pastime considerations arose because of revelations in regards to the mayor's close ties to its director, Sonia Hassan, a mentioned Wayne State doctor. Duggan and Hassan have been considered on surveillance photos closing yr arriving at the identical suburban dwelling. The video triggered the mayor and his wife to protect their marriage when the video became public in November.

Duggan's wife, Lori Maher, filed for divorce last week.

Duggan handpicked Hassan to lead Detroit's efforts to cut back preterm delivery after he became elected in 2013. The Make Your Date nonprofit launched in 2014, nevertheless it was on no account operational since the tuition took over the application, Wayne State officers have spoke of. Make Your Date has raised more than $1.5 million considering the fact that its inception, in response to Wayne State.

Make Your Date is designed to assist pregnant women deliver full-time period children. The firm holds pregnancy education courses and says it connects ladies to doctors and midwives, and gives different medical functions.

The Make Your Date nonprofit filed bureaucracy with the internal salary carrier last yr to preserve its tax-exempt reputation and it filed an annual file with the state. Hassan additionally registered an emblem with the federal trademark workplace closing yr, the use of the identify of the nonprofit as registered with the Michigan department of Licensing and Regulatory Affairs. The brand is featured in fundraising substances, along with descriptions of Make Your Date as a nonprofit company. 

several consultants widespread with nonprofit regulations whom the Free Press interviewed expressed confusion about how the corporation is install because it has used its nonprofit repute in a number of methods.

Paul Streckfus, a former IRS tax professional who runs a web ebook dedicated to exempt agencies, mentioned Wayne State’s affiliation with Make Your Date is irrelevant because donors are writing assessments in Make Your Date's identify and the nonprofit entity has maintained its tax-exempt reputation with the IRS.

“The concern is that they're identified by way of the IRS as a tax-exempt entity,” pointed out Streckfus, editor of the EO Tax Journal. “It doesn’t rely what Wayne State and the others are saying then, in the event that they have based themselves with the IRS.”

Wayne State officers have given the Free Press varying answers about how Make Your Date's money is dealt with. They mentioned ultimate December that Wayne State is Make Your Date's fiduciary and identified different nonprofits for which the tuition serves in that role. they've pointed out Make Your Date is fully a Wayne State software. however then in April, a spokesman for Hassan advised the Free Press for the primary time that the Wayne State school groundwork handles some of the firm's donations.

Duggan, in defending the metropolis's help for the corporation, has joined Wayne State officers in characterizing Make Your Date as a dormant nonprofit. He expected the city's inspector typical will also find the nonprofit changed into inactive when the city directed federal gives you to Make Your Date between 2015 and 2017.

"i am 100% confident when the OIG does this they're going to discover a dormant nonprofit that not ever spent any funds, not ever took any money, that on no account ever opened a checking account and that the city of Detroit in no way did anything else to help that," Duggan referred to at a news conference final month. "every little thing become in direct partnership with the school."

Detroit Inspector well-known Ellen Ha has now not referred to when her report on Make Your Date should be released. Some have puzzled no matter if Ha, who up to now labored within the law department under Duggan, may also be impartial.

Wayne State and Make Your Date officials refused remaining week to reply the Free Press’ questions searching for clarification on how Make Your Date solicits donations, where the cash goes and the way its donations are reported to the IRS.

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despite Wayne State's refusal to talk about the internal workings of Make Your Date, an attorney for Hassan on April 23 threatened the Free Press with a libel suit, worrying the newspaper retract its characterization of Make Your Date as a nonprofit in previous coverage.

“My customer is not a public figure and has by no means had her attractiveness attacked before. At no point does the Free Press story cite a single case the place the nonprofit began by Dr. Hassan acquired any funds, any guide, or any benefit,” Thomas Cranmer, an legal professional with the Miller Canfield enterprise, wrote April 23 to the established information for the Free Press’ mother or father company, Gannett. The city has employed Miller Canfield during the past for illustration, mainly in its municipal chapter case and the federal demolition investigation.

“Dr. Hassan has been libeled, it changed into performed with malice, and it turned into accomplished with full skills the story was false,” Cranmer wrote. “if you fail to stream at once to print a full retraction of the false allegations and ask for forgiveness to be able to offset one of the vital hurt to Dr. Hassan’s acceptance, they will take the essential legal action to clear her identify.”

through its attorney, the Free Press has refuted defamation and libel claims in its response to Cranmer. 

Nonprofit experts said it is complicated to be aware officials’ clarification that Make Your Date is absolutely a Wayne State software with out a energetic nonprofit. 

They aspect to the undeniable fact that Make Your Date has maintained its tax-exempt reputation with the IRS and the State of Michigan. and that they factor to a logo obtained closing 12 months from the U.S. Patent and Trademark office, which has been used for fundraisers, the application’s website and promotional items.

The fundraising brochure for Make Your Date's 2017 gala instructs donors to make their assessments out to the Make Your Date Detroit 501(c)(three), the IRS's designation for a nonprofit company.

George W. Smith, a licensed public accountant in Southfield who works with nonprofits, reviewed Make Your Date’s regulatory filings and fundraising files and talked about the firm’s structure is uncertain at best.

“They’ve completed an outstanding job of blurring everything to the element (of) how do I inform you what’s appropriate and what’s wrong?” Smith spoke of. “If it’s deliberate, they’ve performed a hell of a job and that they should still print a ebook on it.”

there has been no recommendation that Make Your Date or Hassan have misused any funds.

Make Your Date created a brochure in 2017 for its annual gala downtown that sought donations of as much as $25,000.

Duggan, as the gala’s honorary chairman, turned into featured on the brochure together with comedian Louie Anderson, who turned into the headlining act. particular person tickets charge $250 and event sponsorships ran between $2,500 and $25,000.

Insignias for Wayne State, the metropolis of Detroit and the Detroit scientific core had been protected in the brochure as the event’s featuring sponsors. however nothing on the kit indicated Make Your Date is a program run through Wayne State or that the tuition's basis become worried in any manner.

“Make Your Date Detroit is a nonprofit company leading how to be certain every pregnant girl in each neighborhood in Detroit is aware of that their notable city is stepping as much as make sure she delivers a full-term healthy, satisfied child,” the sponsorship equipment stated.

prison specialists noted the brochure is an instance of how complicated Make Your Date’s constitution is. If Wayne State runs the Make Your Date software, then it can be clear to donors that they are giving their cash to Wayne State.

“So, to me, that’s the query — who’s truly soliciting? Is Wayne State soliciting or is Make Your Date? If Make Your Date is not registered to do charitable solicitation, then they shouldn’t be soliciting. Wayne State should be soliciting,” stated Sally Wagenmaker, a Chicago lawyer who represents nonprofits.

Even references to Make Your Date on Wayne State’s web site are puzzling. despite the school’s insistence that Make Your Date is just a program of the tuition, its Wayne State web site for accepting donations describes Make Your Date as a “effective and free nonprofit software, offered through the city of Detroit.”

within the monetary documents supplied with the aid of the college, there's a duplicate of a $5,000 donation from the group basis of better Flint in 2017 that includes the Make Your Date nonprofit’s federal tax identification number.

On its facebook page, Make Your Date is categorised as a nonprofit company. assistance about its ties to Wayne State is minimal — guests to its facebook page best are offered boilerplate tips about Make Your Date’s backers.

On the 2017 gala brochure, Make Your Date is awfully particularly referred to as a 501(c)(3) nonprofit. In other public-dealing with documents it calls itself a “now not-for-earnings company” a designation that also conveys a charitable aim but has distinct requirements from a nonprofit.

“With the guide of the Mayor’s office, predominant clinical associations, universities, foundations, and insurance agencies, we’ve built a caring and supportive team dedicated to turning the tide against bad preterm births,” reads the “Our Story” element of Make Your Date’s facebook web page.

Make Your Date's 2017 gala introduced in tens of lots of dollars, however the nonprofit did not record the profits to the IRS in its 2017 tax return. 

Make Your Date gathered as a minimum $59,000 from fitness care agencies and other companies who sponsored the gala or purchased tickets to the adventure.

The donations included a $25,000 sponsorship by DMC and $20,000 from Henry Ford fitness equipment. Make Your Date financial records bought from Wayne State by the use of the freedom of counsel Act do not point out precisely how many tickets Make Your Date sold for the gala.

Make Your Date raised a total of $224,one hundred and five in its 2017 fiscal year.

but when Make Your Date filed its 2017 tax return, it said that its profits became lower than $50,000.

Hassan spokesman invoice Nowling in the past instructed the Free Press the Make Your Date nonprofit certainly not opened a checking account or spent “a single cent.”

“The nonprofit by no means obtained any dollars from any funder, the city or in any other case,” Nowling wrote in an electronic mail. “Make Your Date is a application run via Wayne State college. WSU manages all the firm’s budget, including the receiving of out of doors funding, the approving of charges, and protecting annual budgets.”

I don’t be aware of somewhat what’s happening right here. It’s either a software of the institution or it’s a separate nonprofit. I haven’t the faintest concept which manner its structured.

Bruce R. Hopkins, creator of “The legislation of Tax-Exempt corporations

Bruce R. Hopkins, author of “The law of Tax-Exempt organizations” and a professor at the tuition of Kansas faculty of law, stated Make Your Date should still be marketed both as a university application or a stand-on my own nonprofit.

“I don’t recognize reasonably what’s going on here,” Hopkins noted. “It’s either a software of the school or it’s a separate nonprofit. I haven’t the faintest conception which way it be structured.”

A contract between Make Your Date and the Detroit scientific center in 2017 is additionally uncertain about even if Make Your Date became working as a school software. 

The contract spelled out DMC’s $25,000 donation to sponsor Make Your Date’s third annual gala in 2017. DMC acquired 20 tickets to the event, which blanketed cocktails, dinner and entertainment, according to the contract, acquired by means of the Free Press by means of the liberty of suggestions Act.

because the recipient of the donation, Make Your Date changed into listed on the contract as “Make Your Date ℅ Wayne State institution, a nonprofit organization.” Hassan signed the contract as director of Make Your Date. The Wayne State college basis is not outlined anyplace within the contract, contradicting Hassan legal professional's rivalry that the 2017 gala became strictly a groundwork adventure.

experts in nonprofit rules noted the contract language makes it difficult to inform if Make Your Date turned into a nonprofit entity or a Wayne State software when the contract was signed.

“the style here's written it’s slightly ambiguous,” spoke of William Fournier, of Caplin & Drysdale, a Washington, D.C., legislations company. “including it as ‘care of Wayne State’ suggests that they’re trying to treat it as a program, however the recipient signing the contract — signing as director of Make Your Date — which means they’ve bought sort of felony authority to signal as a separate entity,” noted Fournier, who makes a speciality of nonprofit tax necessities.

Smith spoke of the contract language is indistinct, and that he was unable to tell no matter if it's deliberate.

“Are they lazy, ignorant, (or) they just don’t be aware of what they’re doing,” he observed. “i will’t inform you ample with any of this to assert which method it's,” he observed.

yet another sign that Make Your Date’s nonprofit is up and operating is the software’s use of a trademarked logo.

The Make Your Date nonprofit agency got a trademark certificates in 2018 from the U.S. Patent and Trademark workplace.

The certificate was sent to “Make Your Date, Inc.,” which is the nonprofit enterprise registered with the State of Michigan that metropolis and Wayne State officials claim has been inactive given that 2014.

Make Your Date’s trademark certificate described its emblem — a baby’s footprints inside crimson and blue hearts, which is prominently displayed on the firm’s fb page, web site and promotional material.

The Make Your Date nonprofit has a seven-member board at the moment headed by means of Hassan’s sister, Susan Hassan. New contributors have come and long gone considering the nonprofit was included in 2014, in response to regulatory filings.

The existing board also comprises Conrad Mallett, CEO of DMC Sinai-Grace hospital, and David Cotton, who turned into CEO and founding father of Meridian fitness Plan until it offered remaining 12 months to WellCare health Plans for $2.5 billion. Neither Mallett nor Cotton could be reached for comment.

A spokesman for Wayne State downplayed the board’s role.

The board became set up when Make Your Date launched and turned into applying for tax-exempt status as a nonprofit company. Make Your Date opted to be run as a Wayne State software as a substitute of an impartial nonprofit, spokesman Matt Lockwood wrote in an email final month.

“Wayne State has in no way used a board to control the Make Your Date program. we've, every so often, consulted with voluntary advisors on the construction of the Wayne State program, but these meetings have been informal and didn't have minutes or formal reports,” Lockwood wrote.

Fundraising substances for Make Your Date offer donors who supply $a hundred,000 or extra a spot on an “advisory board” and the “operating committee” for the organization. but the materials aren’t clear on whether those are seats on the board of administrators.

Dr. Sonia Hassan, in red, sits with Detroit Mayor Mike Duggan during the 2015 fundraising gala for Hassan's Make Your Date program at MGM Grand Detroit.

Dr. Sonia Hassan, in pink, sits with Detroit Mayor Mike Duggan throughout the 2015 fundraising gala for Hassan's Make Your Date application at MGM Grand Detroit. makeyourdate.org

regardless of Lockwood’s characterization of the board as idle, emails Sonia Hassan sent in 2017 imply the board influenced Make Your Date’s operations. The Free Press got the emails via an open information request.

Hassan weighed the board’s enter when on account that whether Make Your Date would take part in the creation of a listing for younger expectant moms.

“we would very a lot want to associate with you,” Hassan wrote on Feb. 1, 2017, to a representative of the countrywide Council of Jewish ladies. “despite the fact, at this element would need to current the plan of your task and a few of the logistics to their team common. It’s also likely their Board individuals would are looking to know slightly more about this venture before relocating forward as it may potentially affect a few of their companions — including the one they intend to work with quickly.”

Later that year, in August 2017, Sonia Hassan expected the board’s response to an upcoming public announcement involving Make Your Date and SisterFriends, a city initiative. In emails with Duggan Chief of personnel Alexis Wiley and Joneigh Khaldun, the city's then-health director, Hassan debated contents of a information unlock to announce the partnership.

Hassan wanted to alter the fitness director's quote within the unlock since it didn’t “optimally seize the spirit of the collaboration …

“As written it implies that the latest application ignores the different considerations a lady faces — transportation, social concerns, home touring, and greater — which isn't the case. Their program, supporters, funders and board might be stunned on the messaging — exceptionally in gentle of the success of the program to date. perhaps they could focal point on the message as mentioned prior to now.”

no matter if Make Your Date is a Wayne State program or an impartial nonprofit, a board of administrators for a firm its measurement can be anticipated to hold assembly minutes, mentioned Smith, the Southfield accountant. If the IRS have been to audit Make Your Date, meeting minutes can be among the many first issues it requests, Smith noted.

“if you don’t have minutes, they’re going to assert you’re no longer even functioning like a nonprofit,” he stated. “It’s no longer a requirement; it’s an expectation usual. notably in anything like this with nonprofits, they'd expect to look minutes.”

finally, the set-up for Make Your Date is irrelevant when examining no matter if the firm bought preferential remedy from the city, noted Leslie Lenkowsky, a professor at the Indiana tuition Lilly household school of Philanthropy.

“The organizational kind doesn’t be counted at all,” Lenkowsky pointed out.

The concern is whether the metropolis’s battle-of-interest guidelines have been followed in its guide of Make Your Date, he mentioned.

Viki Harrison, director of state operations for the nonpartisan grassroots firm regular trigger, mentioned the debate about even if Make Your Date is a nonprofit or fully a school software doesn’t get at the coronary heart of the situation, which she said is the appearance of a battle of activity.

common cause is a country wide corporation that advocates for open and clean executive.

“whether it goes to a nonprofit or a college, that’s a bunch of historical past noise,” Harrison referred to. “That doesn’t count. She’s working with the software over at Wayne State, too. ... He has just put her in a nasty situation.”

Harrison, whose expertise contains ethics and accountability, pointed out elected officials reminiscent of Duggan should at all times remember that the choices they make may lift moral and morality issues among their materials.

“I consider that their elected officials during this nation should go above and past the legislations to make sure there are no conflicts of activity in the event you are speaking about money,” Harrison observed.

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