Charity Governance

TIME FOR THE IRS TO TAKE MINISTER BILL KELLER’S CHALLENGE

DATELINE: June 5, 2007, Chicago

We are as political as the next guy. Although our views may differ from that guy, we both share one thing in common: We are not entitled to claim an income tax deduction for contributions we make to support a candidate for public office. Although the original rationale for the prohibition in Section 501(c)(3) against political campaign interventions by charities is not entirely clear, today many experts justify it as a measure to prevent those who cannot directly deduct their monetary support for candidates from doing so indirectly through gifts to charities.

As the IRS noted last week in its 2006 PACI report, it continues to actively police the landscape for prohibited campaign interventions by charities, including religious organizations. That is why we hope the IRS will vigorously investigate...

MILWAUKEE PUBLIC MUSEUM: NOT ALONE IN THE WOODS

DATELINE: June 4, 2007, Chicago

We have written extensively during the last two years about the problems facing the Milwaukee Public Museum. In large part, the museum found itself in the precarious financial position due to governance failures. But even if the museum had been well run, it still might be facing fiscal woes. Sunday's L.A. Times carried an article that will have the museum world talking for some time to come. Written by Mike Boehm, the article's title—Nature Museums Nearly Relics Themselves—suggests that with the exception of several very large ones, natural history museums across the country...

IRS PROVIDES NEW GUIDANCE ON POLITICAL ACTIVITY BY CHARITIES, INCLUDING WEB LINKS

DATELINE: June 1, 2007, Chicago

Today, the IRS issued Revenue Ruling 2007-41, 2007-25 I.R.B., in its continuing efforts to provide guidance to charities regarding the line between permissible activity and impermissible political campaign interventions. The tax bar now has 21 new examples to mull over.

As is often the case in this area, many of the examples are obvious, but that is not necessarily a bad thing given the overall message running through the examples. That message being the importance of neutrality. Phrased more practically, the IRS is essentially telling charities, "Both of us know when you are stepping over the line."

We had heard through the grapevine that there was strong debate within the IRS over the question of...

IRS RELEASES 2006 PACI: THE BEAT GOES ON, AS DO THE NEVER ENDING POLITICAL CAMPAIGNS

DATELINE, June 1, 2007, Chicago

One thing is clear, the IRS's Political Activities Compliance Initiative Project is working. Today, the IRS issued a report for the 2006 election year. The 2004 report was based on 166 referrals, which resulted in 110 organizations selected for examination. Candidates and their supporters apparently took note. The 2006 report saw the number of referrals increase to 237, but only 100 of those warranted examinations. The higher number is in part due to a nine-month collection period in 2006, compared to a six-month period in 2004. The referrals continue to be evenly split between alleged violations by...