Harvy Lipman of the Chronicle of Philanthropy reports today that Senator Grassley, Chairman of the Senate Finance Committee, is at it again. See Senate Committee Reviews Oklahoma Trustees' Pay (February 9, 2006). According to Mr. Lipman, Senator Grassley sent a letter to Sharon J. Bell, a trustee of the Chapman Trusts, an Oklahoma-based charitable trust organized as a supporting organization. Ms. Bell reportedly receives $1.4 million to act as trustee and the Bank of Oklahoma reportedly receives $3.9 million (both numbers are for an annual period). Those are admittedly...
Our very own Jack Siegel's book, A Desktop Guide for Non-Profit Directors, Officers and Their Advisors: Avoiding Trouble While Doing Good is scheduled to hit the streets before the end of March. The page proofs are in the editing process. Soon the printing presses will be rolling. The Guide will be published as part of the John Wiley & Sons Nonprofit Series, the highly-regarded legal, business, and mangement series devoted to nonprofits. The book is a comprehensive guide to the legal, accounting, and regulatory issues facing nonprofits. It includes sections on organizational structure, director duties, tax-exempt status, charitable giving (including planned giving), insurance, events liability, employment law, property tax exemptions, record retention, nonprofit postal rates, investment policy, fundraising and endowments, and many other topics. As is the case with the Charity Governance blog, it uses a case-based approach, focusing heavily on issues and problems that other organizations have had to cope with. The book will be required reading for executive directors, general counsel, and nonprofit advisors. |
large numbers, but the charitable trust (actually 12 trusts) has a net worth of $1.6 billion.
Senator Grassley’s letter focuses on how trustees’ fees are set. The Chronicle article reports that several of the fee arrangements had been approved by Oklahoma probate courts and that the fees are within the 1% maximum set out in the trust documents.
Is Ms. Bell paid too much? We don’t know the answer to that question. What we do know is that the IRS has the authority to question the appropriateness of the compensation through application of the intermediate sanctions and the prohibition on private inurement. Once again, we must ask the most basic of questions: Why is a United States Senator conducting his own audit? Isn’t that what the IRS does for a living? If Senator Grassley is dissatisfied with the level of IRS enforcement, why doesn’t he provide the IRS with more resources or reform the agency?
For sometime, Senator Grassley and his staff have been on a crusade to expand the federal regulation of charitable organizations. Together, they have proposed numerous changes to the law. Senator Grassley has been unable to enact his proposals. In fact, a group of his colleagues wrote him a letter suggesting that some of his proposals were counterproductive. In our view, It is simply inappropriate for a United States Senator to demand information from individual organizations on an ad hoc basis in an effort to cajole them into doing what he believes nonexistent laws should require them to do. What is even more amazing is that this is a Republican engaging in this sort of backdoor interference with the private sector.
We have already detailed in prior posts other recent incidents involving Senate Finance Committee meddling. Just last month, the Senate Finance Committee issued a press release expressing concerns over alleged fraud, abuse, and mismanagement at the University of Medicine and Dentistry of New Jersey. Although the focus appears to be more on alleged fraud and abuse than governance, the two are related. Once again, we aren’t concerned with merits of the particular case. But if there are problems, shouldn’t they be investigated by state and federal law enforcemen agencies, and if warranted, prosecuted by prosecutors rather than the Senate Finance Committee?
We will be interested to see Ms. Bell’s response. If the Senate Finance Committee is going to engage in this sort of activity, we would at least like to see the discussion between the parties out in the open where it belongs.
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