As everybody is well aware, we have had an ongoing debate in this country over the last decade regarding the role of religion in public life. Should we have prayer in school? Should judges bring their religious beliefs to the bench? Should government money be used to fund social services provided by faith-based organizations?
Those who have been pushing for the blurring of the line between state and religion may be about to find out that there efforts carry a price that can be measured in greenbacks. Specfically, Bill Zajac reports in the Massachusetts Republican (August 14, 2005) that Massachusetts lawmakers and regulators are considering changes
Coming in at 705 pages, Jack Siegel's Desktop Guide for Nonprofit Directors, Officers, and Advisors: Avoiding Trouble While Doing Good has become the go-to resource for those starting and running nonprofit organizations. Jack covers a wide range of topics, including tax-exemption, governance, director duties, conflicts of interest, investing endowment, reading financial statements, whether Sarbanes-Oxley is truly best practices for nonprofits, tax issues (exemption, UBIT, private foundation excise taxes, political activity, charitable contributions, planned giving, substantiation, intermediate sanctions, etc.), state registration requirements, solicitation over the Internet, record retention, FTC Do-Not-Call, FTC CAN SPAM), property tax exemptions and PILOTs, faith-based organizations, federal grant requirements, accounting for endowments, pledges, evaluating the organization, writing corporate minutes, D & O insurance, indemnification, organizational insurance needs, the Volunteer Protection Act, legal issues when staging events, tax-exempt bonds, and many, many other topics. The Guide continues to sell briskly, with speakers recommending at conferences and professionals recommending it to their clients. One national authority on nonprofit law tells her clients, "This book tells you everything I want to tell you." Buy your copy today at Amazon.com. Barnes & Noble, or John Wiley (the publisher). |
to several laws that could adversely affect religious institutions. Hearings were held last Wednesday on this legislation.
Specifically, the proposed legislation would “remove existing religious exemptions in the state laws governing charities and require all churches to file annual financial reports and a list of real estate holdings as about 300,000 other charities are required to do.” In addition, Mr. Zajac's article reports a trend by property tax assessors in taxing church-owned property that is not specifically used for religious purposes. Apparently this is the practice in eastern Massachusetts, but it now is spreading to western Massachusetts. The proposed legislation would facilitate assessor efforts by requiring religious organizations to file a disclosure statement listing all the real property that they own.
According to Mr. Zajac’s article, some advocates of the registration bill believe it is a necessary response to the Catholic Church’s handling of the highly-publicized sexual abuse scandals of the last several years. As would be expected, there are already people arguing that the legislation violates the separation of church and state. If the legislation is enacted, it will be very interesting to follow the litigation that will inevitably follow. One would think that if the statute is applied neutrally, it would withstand constitutional challenge. In recent years, the U.S. Supreme Court has been willing to blur the line between church and state when it comes to public funding of certain expenses incurred by religious organizations in providing non-religious education— Mitchell v. Helms. 530 US 793 (2000); and Agostini v. Felton, 521 U. S. 203 (1997). See also, Tony & Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (1985), in which the Supreme Court held that application of minimum wage laws to church commercial activities did not violate the Free Exercise clause of the constitution.
Could this be the start of a new trend?
The bill is Massachusetts Senate Bill 1074, and here is the language:
AN ACT RELATIVE TO CHARITIES IN MASSACHUSETTS
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Section 8F of
chapter 12 of the General Laws, as appearing in the 2002 official
Edition, is hereby amended by inserting after the word “require”, in
line 6, the following words: - , including, but not limited to the
address of each parcel of real property owned by the public charity and
any related organization.
SECTION
2. Section 8F of chapter 12 of the General Laws, as so appearing, is
hereby amended by striking out the fourth paragraph.
SECTION
3. Section 8F of chapter 12 of the General Laws, as so appearing, is
hereby amended by inserting at the end thereof the following
paragraph:-
For the purposes of this section, a related organization means:
(a) Any entity, whether for profit or nonprofit, which the public charity directly or indirectly owns, or which directly or indirectly owns the public charity. “Owns,” means directly or indirectly holding more than 50% of voting membership rights or voting stock;
(b) Any entity, whether for profit or nonprofit, under common control with the public charity. “Control” means over 50% of an entity’s directors, trustees, or other members of its governing body are representatives of, or are directly or indirectly controlled by a second entity;
SECTION 4. Chapter 68 of the General Laws, as so appearing, is hereby amended by striking out section 20 and inserting in place thereof the following section:-( c ) Any entity, whether for profit or nonprofit, (i) a purpose of which is to benefit or further the purposes of the reporting organization, or which the reporting organization was established to benefit or further in its purposes and (ii) which engaged in business transactions or business arrangements, including pledges or assignments of collateral and loan guarantees or other contracts of suretyship with the reporting organization, or paid compensation to, an officer, director, trustee or employee of the reporting organization.
SECTION 5. Subsection (5) of section 26A of chapter 180 of the General Laws, as so appearing, is hereby amended by striking out, in line 41, the words “a church or religious organization,”Section 20. The following shall not be required to file registration statements with the division or to have a certificate of registration under section nineteen: (1) charitable organizations which do not actually raise or receive contributions from the public in excess of five thousand dollars during a calendar year or do not receive contributions from more than ten persons during a calendar year, if all of their functions, including fund-raising activities, are carried on by persons who are unpaid for their services and if no part of their assets or income inures to the benefit of, or is paid to any officer or member; provided, however, that if the contributions raised from the public, whether or not all is received by any charitable organization during any calendar year, is in excess of five thousand dollars, it shall within thirty days after the date it shall have received total contributions in excess of five thousand dollars, register with and report to the division as required by section nineteen.
If you liked this post, please visit http://www.charitygovernance.com
for a description of our Guide/Tutorial for non-profit directors and
officers entitled “Avoiding Trouble While Doing Good: A Guide for the
Non-Profit Director and Officer.” Copyright 2005, Auto Didactix LLC. All Rights Reserved. You may not
copy any portion of this post to a computer "clipboard" for re-posting
anywhere or e-mailing, or otherwise reproduce this post. If you want
others to review this post, you may provide them with a link to this
web blog. Any use of the material or ideas in this post by reporters or
other publishers shall make reference to Jack Siegel, author of
"Avoiding Trouble While Doing Good, A Guide for the Non-Profit Director
and Officer" and this web blog. For additional information call 773-325-2124
THE
FOREGOING IS NOT AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. IF LEGAL
ADVICE IS REQUIRED, THE NON-PROFIT OR OTHER PARTY IN QUESTION SHOULD
SEEK THE ADVICE OF QUALIFIED LEGAL COUNSEL.
