The Freedom From Religion Foundation yesterday sent a letter to the IRS asking it to investigate the tax exempt status of two nonprofits involved in operating and fundraising for the for-profit “Ark Encounter” theme park in Kentucky. The Noah’s ark-themed park, slated to open in 2016, will center on a full-scale ark built to biblical specifications.
Answers in Genesis (AiG) is a Christian fundamentalist group that advocates a literal interpretation of the bible, and owns the Creation Museum. Through a subsidiary nonprofit, it also owns Ark Encounter, a for-profit LLC, and has fundraised extensively for the park.
Donations to AiG, a nonprofit, are tax deductible, while donations directly to Ark Encounter, a for-profit company, would not be. But AiG fundraising materials include a space for donations to Ark Encounter, and note that donations are “tax deductible to the fullest extent allowed by law.” On the AiG website, donors have the option to designate contributions to Ark Encounter.
A separate Ark Encounter website also states that sponsorship is tax deductible.
Thus it appears that AiG is taking tax-deductible donations and directly giving them to Ark Encounter, LLC, noted FFRF Staff Attorney Patrick Elliott.
Nonprofits can run for-profit companies that are related to a charitable purpose, including a religious purpose. But, in order to obtain tax breaks, AiG has taken great pains to assure the state of Kentucky and other government entities that Ark Encounter will be operated as a private, for-profit business. The Ark Encounter website admits, “The for-profit LLC structure also allows the Ark Encounter to be eligible for various economic development incentives that would not have been available with a non-profit structure.”
“Answers in Genesis cannot have it both ways,” said FFRF Co-President Annie Laurie Gaylor. “Either the Ark Encounter is a religious enterprise and is eligible for tax-exempt donations, or AiG and Ark Encounter can be taken at their word that the park is purely a commercial enterprise.” In the latter case, then AiG is not “‘operated exclusively for religious, charitable, scientific’ or other exempt purposes,” as required for exempt status, and should lose its tax exemption, FFRF contends.
“While religiously themed, a ‘theme park’ is quintessentially a commercial entertainment activity and not charitable,” wrote Elliott. “Ark Encounter representatives have said that from an operational standpoint, the project will ‘have the look and feel of any other theme park.’ ”
“Based on information that is publicly available about the operations of both organizations, they are not operated exclusively for exempt purposes,” concluded Elliott, asking the IRS to investigate the operations and tax-exempt status of AiG.
The letter was accompanied by 15 exhibits: