Wreaths Across America, a charity that decorates military graves at Christmas, buys all its wreaths from a company owned by the family who started the non-profit organization,
the
Wall Street Journal
reported.
Worcester Wreath Co. of Harrington, Maine, received $25 million in sales from Wreaths Across America, the article said. Members of the Worcester family and former Worcester Wreath employees run the charity and serve on the board, the
Journal
article said.
Rob Worcester, co-owner of Worcester Wreath's parent company, told the
Journal
that sales to Wreaths Across America make up 75% to 80% of the company's revenue.
The article said that in its tax filings, Wreaths Across America discloses the sales to Worcester Wreath and the presence of Worcester-related parties on its board.
Tax attorney Marcus Owens, former director of the IRS division overseeing tax-exempt organizations, told the
Journal
it is legal for charities to do business with related parties, but an organization can lose its tax-exempt status if the arrangement benefits the business to the detriment of the charity.
Wreaths Across America says independent board members approve the wreath purchases, and family members and former company employees recuse themselves from procurement decisions, the article said.
Karen Worcester, executive director of Wreaths Across America, is married to Morrill Worcester, president of Worcester Wreath, the article said. Karen Worcester said the charity's board will consider whether to accept bids from other suppliers for the 2017 Christmas season, the
Journal
report said. The article cited comments from other Maine wreath suppliers who said they could beat Worcester Wreath's price.
Worcester Wreath lost “sufficient business” after a dispute with L.L. Bean, the article said. (Source:
Wall Street Journal
, Dec. 22, 2015.)
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