SEATTLE — The Northwest chapter of the American Lung Association said today it would fight the national charity’s attempt to dissolve it.
The American Lung Association sent the regional affiliate a cease-and-desist letter Friday ordering that it stop using the organization’s name and turn over its assets because of perceived policy violations. Among those alleged violations was the chapter’s sale of its $3.2 million Seattle headquarters last August to a newly formed lung foundation for $10.
The regional affiliate wrote back today to say it can’t be dissolved pending the outcome of legal claims in King County Superior Court, and that the ugly spat wasn’t doing either side any favors.
“This is the kind of a dispute between two charitable nonprofits that should have been settled in the family,” Laird Harris, chairman-elect of the Northwest affiliate’s board, said in a written statement. “(The American Lung Association’s) aggressive and destructive decision to pursue the matter in court and in the media is damaging to our common mission of promoting lung health.”
The American Lung Association, founded in 1904, gave the American Lung Association of the Northwest notice in mid-September that it was in violation of several of the organization’s policies. If those issues weren’t fixed in 30 days, it said it would cut ties with the regional group, which has been operating here since 1906 and currently represents the national charity in Washington, Idaho and Alaska.
The national charity said there were several violations of the agreement that governs the relationship between it and its regional chapters:
The Northwest chapter’s new president, Mike Alderson, formed a separate organization, the Pacific Northwest Lung Cancer Foundation, without approval.
The chapter’s board sold its Seattle headquarters to the new foundation for $10 in August. It also gave the new foundation $600,000 in exchange for five years’ rent.
Alderson’s assistant sent an e-mail to others in the chapter declaring a new mission statement. Instead of “preventing lung disease and promoting lung health,” it was to “help individuals who have lung disease and to help prevent future lung disease.” That was significant, the national organization said, because many grants and donations the organization receives are conditioned on promoting the American Lung Association’s mission, which does not focus on helping individuals, but on public health.
In e-mails and an interview Monday, Harris responded to those points, saying Alderson formed the new organization on his own, and not with the approval of the Northwest chapter’s board. Therefore, he said, establishing the new foundation did not violate the national charity’s policy that regional affiliates not create other foundations.
He said the point of the new foundation was to help raise huge amounts of money not just for the American Lung Association of the Northwest, but for other organizations that promote lung research and health. The new foundation was expected to have a professional staff dedicated to raising money — something the regional affiliate had not been able to afford.
The $600,000 was essentially seed money to get the new organization off the ground, Harris said.
“Our board perceived a very strong need to have fundraising efforts beyond what we were already doing,” he said.
Transferring the older brick building to the new foundation took maintenance costs off the regional chapter’s financial books and brought it closer to a balanced budget, Harris said.
While one section of the operating agreement between the chapter and the American Lung Association requires that each side “hold all their funds and other assets in their own names,” Harris pointed to another section that says the chapter may keep any proceeds from real estate sales, and said the national organization confirmed in an e-mail that the chapter did not need permission before making such a sale.
The regional chapter also argues that despite the e-mail from Alderson’s assistant, there was no change in its mission. Any such changes must be approved by the board, which never considered a change to the mission statement.
In early October, the American Lung Association obtained a temporary restraining order in King County Superior Court, barring Alderson from violating the operating agreement that governs the relationship between the two organizations. The regional affiliate has filed a counter-claim alleging unfair business practices, essentially alleging that the national charity had plotted a hostile takeover of the Northwest chapter.
The sides failed to reach agreement in mediation last week.
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