The charitable status of OWS's fiscal sponsor means that the Internal Revenue Service will want to verify that every donation is used for charitable purposes.

Photo by: Natalia V. Osipova

The charitable status of OWS’s fiscal sponsor means that the Internal Revenue Service will want to verify that every donation is used for charitable purposes.

Even a protest against banking and finance has a certified public accountant.

That’s one curious aspect of the Occupy Wall Street movement, which is trying to deal with the crush of donations from the month-old movement. According to Pete Dutro, 36, an NYU finance student and member of the Occupy Wall Street finance committee, over $100,000 has been raised since the occupation started on Sept. 17. But the movement is struggling with the overwhelming volume of donors that have overloaded the online donation system.

“When [Occupy Wall Street] started discovering that people wanted to give them money, they contacted us, neither side dreaming that it would grow to what it has,” says Chuck Kaufman, a national co-coordinator with the Alliance for Global Justice (AFGJ).

AFGJ, a Washington D.C-based charity, got involved in the movement through Occupy DC on Oct. 6, and subsequently became the fiscal sponsor for Occupy Wall Street, which allowed the movement to accept more than in-person cash donations. In exchange for accepting payments on behalf of organizations, AFGJ deducts an administrative fee of 7 percent.

AFGJ is handling both online and telephone donations and has experienced serious problems in the past week, as both their office telephone and Internet service were mysteriously disconnected twice. Kaufman found the timing suspicious, but says he has no proof of wrongdoing. Then, on Oct. 7, their online payment processor, E-Onlinedata, stopped accepting donations and left $80,000 in existing donations inaccessible to the movement.

“They were alarmed when we went from processing a couple dozen transactions a week to 400 a day, so they called and we explained what was going on. Despite that explanation, they froze the account,” Kaufman said.

Kaufman then asked supporters to call E-Onlinedata and complain, which generated a torrent of phone calls to the company. After a testy phone conversation with the firm’s president, Kaufman agreed to ask the protesters to stop calling the company in exchange for releasing funds.

Another financial burden stems from AFGJ’s 501(c)3 charitable status. Kaufman said the Internal Revenue Service wants to verify that every donation made to a charity is used for charitable purposes. He travelled to New York to meet with Occupy Wall Street’s finance committee on Oct. 8, emphasizing that they need to keep a record of every expenditure, whether that’s fuel for the generators that run the lights in Zuccotti Park, or food purchased for the communal kitchen. Volunteers like Dutro now need to comb through hundreds of receipts and turn the data over to volunteer accountant JoAnn Fleming.

“There were a lot of receipts that were just in jumbled piles and sorting through all of that has taken a very long time,” Dutro said.

Improving the accounting will also help increase transparency and accountability for donors, an issue that several potential donors have complained about on the movement’s blog. In an e-mail, supporter Vasiliy Reed, 25, a research assistant from New York, said that a transparent donation system was critical to the movement, adding that “the financial crisis was a great example of the corrosive power of money and I want to make sure all steps are taken to prevent that issue arising with this movement.”

Down at Zuccotti Park, protester J.J. Murphy, 58, of New York, said that while she’s “sure that money is going right out to buy more food,” she acknowledges that movements she was involved in during the 1970s went off the rails for financial and other reasons.

As it began to rain in Zuccotti Park on a recent morning, Dutro asked around to see if there were any ponchos left. “Ponchos? Anyone have any ponchos?” he yelled. “It’s funny, being on the finance committee, and I don’t get anything,” he said. “They’ve printed t-shirts and everybody’s gotten one, but I haven’t gotten one.”

City Limits is grateful to the City University of New York’s Graduate School of Journalism and Professor Lisa Armstrong, who oversaw this project.