Futhering my Commitment as a Board Member for Reuse Alliance

Today, Reuse Alliance announced three new board members and I am thrilled to be one of them.  You can read our announcement here but I just wanted to take a moment to say how thrilled I am to be a part of this organization and to be able to give back a portion of the support I've received from others for DRN.  I realize I don't have a lot of free time, but the advancement of reuse and educating more about the critical need for it, is definitely worth a little overtime.

Thanks to all our board members, partners and agents too, your support is invaluable and we truly appreciate your support. Here's to a healthy and successful new year for all!

Last Minute Green Gift Guide

Posted by Lyndsy Czapla

Usually every year I am way ahead of schedule with my Holiday gifts.  This year, however, I have been pretty far behind and still have to head out this weekend into the trenches a.k.a the stores to get some more shopping done!  One thing that I look for every year is gifts that are eco-conscious and are friendlier to our planet.  Below is a list of some last minute green gifts that I think are pretty neat and are still available to get before Dec. 25th!  All are under $20!

Vapur Anti-Bottle (Reusable Water Bottle) …. Sold at Macy’s, Target, and Online Retailers
Nahui Ollin Candy Wrapper Itsy Bitsy Pouch (Made from Candy Wrappers!) …. Sold at QVC.com and Online Retailers
Any Reusable Bag!  What I like to do is put gifts into reusable shopping bags rather than paper gift bags!  It is so easy and most reusable bags cost the same as paper gift bags!  Plus, you can find reusable bags just about anywhere!
Luigi Bormioli Recycled Green Glass 3-Section Serving Tray… Sold at WalMart.com
Recycled lp coasters…Sold at RedEnvelope.com
Tree-Free Jewelry Box with Piping…Sold at Cost Plus World Market in-store and online

Yes, Orlando, There is a Santa Claus and his Elves just Built you a Home in 1 Day

Last Thursday, Lorenz and I decided to join Corazon for their final volunteer build event of the year. While DRN supports Corazon with our lumber donations, we hadn’t joined them for a build in quite a while. I’m so glad we did. 

We set our alarms for 4:00 am to allow us plenty of time to get dressed, have some much-needed coffee, and feed our bleary-eyed dogs. You see, the group needs to meet in Chula Vista at 6:00, which is an hour and a half drive for us. Once there, we go over the plan for the day, attach ribbons on our antennas so we know who is part of the group, get our radios and head for the border. The group will caravan into Mexico together, only stopping for those who get flagged into Mexico’s secondary. This happens quite a bit and is not a big deal when you know what to expect. 

We arrive in Chula Vista a little after 6:00 am, after picking up Carl Hanson, the gentleman who helps us transport our lumber to Corazon, who will be joining us today. Today is Carl’s first build and he’s one of the sponsors, supplying some the lumber for today. Our group is a small one, only 14 people, but of the 14, 10 of them have hundreds of builds under their belts and would prove to be an amazing team.

We’re building in Pedro Gal and arrive by 7:00 am. We’re met by half a dozen of the locals, who are earning their hours toward their homes. Nothing is given away for free at Corazon. People must put in the time and effort to earn a home. These ladies and gentleman would make up my painting team. The other teams would build the walls and roof rafters. With so many experienced team members, there wasn’t a lot of chit-chat. Heads were down and butts were up in the air as everyone got busy building. By 9:30 am, the walls were up and we were getting ready to put the roof on the house. We were making amazing time. To put things into prospective, the roof normally doesn’t go on until 12:00 pm when we break for lunch. At this rate, we would be one of the “those” builds, the ones we’ve heard about, the ones that are done by 2:00 pm, but we thought those were urban legends because we had never been on one of “those” builds. 

When we broke for lunch, the tar paper was complete and almost all of the roofing tiles installed. I’ve never seen a house go up so fast. Wahoo! We would be done by 2:00 pm, two hours ahead of schedule. The last hour and a half was a blur. By 2:00 pm, we were dedicating the house with a blessing and the homeowner, Orlando, was getting his keys to his new home. 

I should pause here to tell you a little bit about Orlando. Orlando is a lovely man. He has been working with Corazon for a year and a half earning his hours toward his new home. The committee, a group of local residents, decides who gets the next home based on need. While he was next on the list, no one thought we would be able to provide him a home this year, but miracles can happen. The sponsors magically appeared with supplies for his home and the build was given the green light. You see, Orlando has owned the property for quite some time, but he’s been living in a rental. He recently lost his job and had no idea where he was going to live now that he couldn’t afford his rent. Enter a Christmas miracle. At 2:00 pm on Saturday, December 11, 2010, Orlando, with dimples the size of the Grand Canyon, was thanking us for his new home and the new life that was about to start for him. He said now that he had a home, he could marry his girlfriend and start the family he always wanted. What an amazing day. We were blessed with beautiful weather, skilled volunteers, generous sponsors and in 7 hours, we took a cement slab and built a house. Thank you Corazon for allowing me to be part of this amazing day. It was a wonderful way to start my holiday season.

If you’re not familiar with Corazon, the organization has been building homes and sustainable communities in Mexico for 20 years. They are known for their Build a House in a Day program. I encourage you to visit their website and learn more.

Check out photos from our build here & visit our Photo Galleries to see some Corazon builds 

Related blog posts:

Charitable ReUse in Action Down in Baja

Building a High School in Mexico

If Huge Tax Breaks for your Home's Salvaged Materials Sounds Too Good to be True - That's Because it is!

Now that California State Assemblyman Ira Ruskin has given Paul Gardner and Whole House Building Supplies the Small Business of the Year Award for State Assembly District 21, I suppose more and more environmentally-minded (or tax deduction-minded) folks will want to bring down their house through Mr. Gardner’s operation, right? Not so fast! Mr. Gardner should have gotten the tax-break racket of the year award, instead. Apparently no one else put their glasses on and took a close look at the texture of Mr. Gardner’s too-good-to-be-true operation.

In the fall of 2006 the IRS instituted their 3 year recapture program which was designed to address the donations of non-cash goods to recipient charitable organizations where deductions taken by tax payers and the net benefit to charities didn’t remotely match. Mr. Gardner’s little operation gives us an excellent example of the big-dollar issue the IRS is hoping to solve with its 2006 invention, IRS Form 8282.

These discrepancies occur when a person or entity assumes the role of third party fundraiser, like Whole House Building Materials does when it solicits deconstruction business in conjunction with a tax donation. The fundraiser directly receives and sells the non-cash donation and subsequently gives the charity some part of the sales proceeds.

If the fundraiser actually gives the real charity anything, the charity receives what it receives without ever touching the material donation. In most of these cases, a significant portion of the material sales revenues stay with the fundraiser to pay for its costs of doing business, like rent, and salaries, and all the other things a for-profit company pays for. Mr. Gardner claims he gives 100% of the material sales proceeds to something called the EPACT Educational Fund. But upon closer examination, things just don’t add up.

But this is how the deal goes down. Let’s say, instead of traditional demolition, you’re considering doing “deconstruction” with Whole House Building Supplies. You call up Mr. Gardner and he tells you that by doing deconstruction with him, you can take a tax deduction for your donation – just as he told a friend of mine who called him with a possible project. Mr. Gardner said she should expect a $50.00 per square foot tax deduction (even though he’d never seen the house or its condition, and not to mention Mr. Gardner isn’t an appraiser, and never mind his conflict of interest in so far has he also stands to win the deconstruction project dollars, if not all the materials in the house too!) and that the deconstruction would run about $10.00 per square foot. What this adds up to is that homeowners get their demo for free and put a healthy chunk of money in the bank after that, because for every fifty dollars that a typical home builder deducts, they pay twenty dollars less in taxes. So in effect, you pay $10.00 to get $20.00 in return, but you also don’t have to pay the $5.00 to $10.00 per square foot that traditional demolition would have cost you, so your savings is even greater.

If this was all on the up and up, every traditional demo contractor in the state would be out of business, because every homeowner in the state would have a Paul Gardner deconstructing their home to near windfall savings. But Mr. Gardner and his donors have simply been lucky to fly under the radar of the IRS. His days of doing business like he presently is, are numbered (Just ask the hundreds of folks whose tax deductions were disallowed in the Watts 13 donations scam, that spread across Los Angeles and Orange Counties in the 1990’s.). In all likelihood, the reason he’s able to give deconstruction prices at little more than machine wrecking prices (despite the labor intensive nature of taking a house apart piece by piece, with many people, over several weeks, instead of smashing it in several hours with one guy and a machine) is that he really never plans to make any money on the deconstruction itself; rather, Mr. Gardner makes all his money on the sales of the materials, instead.

Oh yes, but Mr. Gardner claims he gives 100% of the material sales proceeds to this EPACT Educational Fund run by some guy by the name of William Byron Webster in condominium # 307 at 480 East O’Keefe, in East Palo Alto – EPACT Fund headquarters. Let’s suppose for a moment that what Mr. Gardner says is true about 100% of the proceeds going to EPACT; if this really happens, Mr. Educational Fund is supposed to sign every donor’s IRS Form 8283 as having received their donation, which according to Mr. Gardner an appraiser will assign a $100,000 value to, if all you have is a dinky little 2,000 square foot house! Doing the math, obviously there ain’t no way in high heaven, Mr. Gardner is either going to sell the materials for, or right a check to, Mr. EPACT for $100,000 dollars for the material sales out of that little 2000 sq. ft. house!

In an extremely optimistic scenario, Mr. Gardner might sell those materials from the donated home for $10,000. Then let’s say he really does give 100% percent to EPACT; EPACT only gets a net benefit of 10K from the donation, which is 90K less that Mr. 2000-sqft-homeowner-donor deducted.

Now the new deal from the smart people at the IRS is that Mr. EPACT (William Byron Webster) must fill out IRS Form 8282 as soon as the non-cash donation is disseminated for cash (which in EPACT’s case should be immediately, because EPACT never actually receives any of the donated materials) and stating the net dollar amount EPACT received from the donation, which in this scenario is 10K. What happens next is that the really smart people at the IRS then reconcile the difference between the 8283 they got from Mr. 2000sf-100K-deduction-homeowner-donor-guy, and the 8282 they get from Mr. EPACT. Then the IRS sends Mr. 2000sf-100K-deduction-homeowner-donor guy a letter saying he owes taxes on the 90K of income which he didn’t pay taxes on.

Oops! I hope Mr. 2000sf-100K-deduction-homeowner-donor guy has a savings account, because that’s the optimistic scenario. But let me digress for one paragraph in order to clarify a small point.

When donors of non-cash goods donate directly to a bona-fide non-profit, the rules are the same, unless the non-profit uses the donated material in the course of its mission. The IRS gives us an example of a company donating donating medical supplies to a releif organization: The relief organization doesn’t need to fill out the 8282 if it uses the medical supplies in the field, in support of its mission. As long as this is the case, the donor need not worry about the IRS taking issue with its 8283 deduction, as long as the donation’s fair market value can be substantiated. Another example would be, if you donated twenty thousand sheets of drywall to Habitat for Humanity and deducted their fair market value; you’re golden as long as Habitat builds houses with that drywall (that Habitat's mission). If, on the other hand, they broker off the drywall or sell it all in their stores for fifty cents on the dollar, that’s another matter. In the second scenario they’ve used the material in a fundraising capacity and must submit the 8282, stating the net cash benefit they received.

But getting back to the folks who donate through the Whole House plan, it may get much worse, because according to Mr. Gardner he only charges a measly $10 a square foot for labor–intensive deconstruction. But he also states he doesn’t make any money selling the materials! I’m betting he can’t match his material sales receipts with the checks he writes to EPACT (if there really are any checks) and that if anyone really took a close look they’d find Mr. Gardner uses a significant portion of the material sales to pay his rent, and salaries, and utilities, and all the other costs retail sales usually go to pay for. What’s more, according to the website “The Charities Guide” EPACT has no assets and receives no income and hasn’t filed a return since 2003. They have a highly suspicious website  running off the Stanford server, which doesn’t talk specifically about a single project they’ve been involved with since the year 2000. Check it out for yourself.

(from: The Charities Guide)

EPACT EDUCATION FUND 

PO BOX 50142 

PALO ALTO, CA, 94303-0142

Contact: WILLIAM B WEBSTER 

Employee Identification Number: 770249384 

Ruling Date: April 1992 

Deductions: Contributions are deductible 

Foundation Type: Organization that normally receives no more than one-third of its support from gross investment income and unrelated business income and at the same time more than one-third of its support from contributions, fees, and gross receipts related to exempt purposes. 

Activity: Described in section 509(a)(2) of the Code 

Activity: Other instruction and training 

Organization Type: Corporation 

Latest Return Filed: December 2003 

Filing Requirement: 990 - Not required to file Form 990 (income less than $25,000). No 990PF return. 

Asset Amount: $0 

Income Amount: $0 

Form 990 Revenue Amount: $0 

Organization Type: Education N.E.C. 

Corporation

EPACT EDUCATION FUND 

Number: C1655424 Date Filed: 12/29/1989 Status: active 

Jurisdiction: California

Agent for Service of Process

WILLIAM BYRON WEBSTER 

480 EAST O'KEEFE ST #307 

EAST PALO ALTO, CA 94303 

So, attempting to wrap this up, if Mr. Gardner deconstructs dozens of homes every year, and using the numbers he gave my friend (remember the $50.00 per square foot) that means donors are literally taking millions of dollars in tax deductions through Whole House and Mr. Webster; yet this EPACT Fund has nothing to show for it! Even if Mr. Gardner sold the materials for 10% of what donors are writing off, and then gave 100% of those revenues to EPACT, EPACT should show revenue and checks from Mr. Gardner for several hundred thousand dollars a year.

Now after giving Whole House Building Supplies the Small Business of the Year Award, maybe Assemblyman Ruskin gets some things I don’t get. But it sure seems to me, somebody is giving somebody the business!

Assemblyman Ruskin may want to put a large disclaimer on his endorsement of Mr. Gardner who will otherwise soon be riding even higher on the tax deductions of homeowners who were led their by Mr. Ruskin himself. One day the IRS is going to catch up with Mr. Gardner and Mr. Webster and all the donors who bought their bill of goods, and Mr. Ruskin might have a little egg on his face.

Of course, contributions to this topic by Mr. Paul Gardner and Mr. William Byron Webster are more than welcome.

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