Charity Governance

FUZZY THINKING IN NEW JERSEY: THE LATEST ROUND OF PROPOSED FUNDRAISING LEGISLATION

DATELINE: July 15, 2011, Chicago

The New Jersey Division of Consumer Affairs Charitable Registration Unit has offered a proposal that demonstrates the problem with the law: Too many proposed laws and regulations address problems that either don't exist or don't need to be solved through another rule.

Under the New Jersey proposal, a charity that solicits funds for two or more programs would be required to tell donors that they have the option to designate how the funds are allocated among the programs.  As currently written and as described in explanatory comments, the proposed regulation would prevent the charity from using any portion of an earmarked contribution for...

THE SKY MAY BE CHICKEN, BUT WE HAVE SOME EGG ON OUR FACES

DATELINE:  March 24, 2011, Chicago

Yesterday we had a little fun at the expense of the California Attorney General (see that post, reproduced below).  A friend of the blog pointed out that we had overlooked an important California statute that severely limits the California Attorney General's power to investigate, institute court proceedings against, and sanction organizations formed as California religious corporations. 

As was true yesterday, we have yet to see any evidence of wrongdoing on the part of Family Radio or its president, Harold Camping.  Yet, we believe the issues we raised yesterday are as...

DID LANCE ARMSTRONG DRINK MORE THAN THREE CUPS OF TEA?

DATELINE: May 23, 2011, Chicago

We are not regular viewers of 60 Minutes, but we just so happened to catch last night's broadcast, which raised serious questions as to whether Lance Armstrong, the winner of seven Tour de France races, broke the rules against the use of performance-enhancing  substances and treatments.   His former teammate, Tyler Hamilton, certainly indicated so in what was a gripping interview.  Armstrong has previously denied use of prohibited substances and treatments.  He has denied the allegations leveled against him by Hamilton and another former teammate, Floyd Landis.  As usual, we will give Armstrong the presumption of innocence until there is a final adjudication to the contrary. 

Although Armstrong undoubtedly hopes that these allegations will go away, that is unlikely.  There are reports of a...

THREE CUPS OF TEA AND A CLASS ACTION LAWSUIT: DRINK THE TEA, DISMISS THE LAWSUIT

DATELINE: May 11, 2011, Chicago

Two Montana residents, Michele Reinhart and Jean Price have filed a lawsuit against Greg Mortenson, the author of Three Cups of Tea, and the Central Asia Institute alleging fraud on the part of both defendants and requesting that the lawsuit be certified as a class action.  Our initial reaction to the filing was that the claimed injury is a bunch of nonsense, but as we read the complaint, we realized the complaint raises some important issues.  Those issues don't change our initial reaction.

The federal district court judge who is assigned this lawsuit should...

UNDOUBTEDLY

DATELINE: May 1, 2011, Chicago

"Changing the tax treatment of charitable gifts in ways that make it more costly to give those gifts will undoubtedly cause many higher-income Americans to reconsider the amount of their gifts."

So writes Robert F. Sharpe Jr. in an April 29, 2011 opinion piece in the Chronicle of Philanthropy.  Changing the Charitable Deduction Could Discourage the Most-Generous Donors.  Mr. Sharpe is the president of the Sharpe Group, a fund-raising consulting company with offices in Memphis and Washington.

One thing that I have learned over the years is that I need to reconsider my thinking whenever the words "clearly," "undoubtedly," or "obviously" appear in the sentence I just wrote.  What is obvious or irrefutable rarely is.  Mr. Sharpe's article is a well-written piece of advocacy, but it suffers from the lack of a reference to a statistical or empirical studies supporting his assertions. 

I will be upfront about it:  As a tax lawyer with some 30 years mucking around in the tax code, I am in favor of...

A TEXTBOOK CASE FOR EVERY DEVELOPMENT OFFICER AND FUNDRAISER IN THE COUNTRY

DATELINE: January 27, 2011, 2011, Chicago

Robert G. Burton, a major donor to the University of Connecticut, has demanded the return of $3 million that was used to build the Burton Family Football Complex.  After reading a letter from Mr. Burton to Jeffrey Hathaway, the UConn Athletic Director, that was posted on the Connecticut Day’s website and marked “PERSONAL & CONFIDENTIAL,” we can only ask one question:  What would it be like to...

WHY THE SPORTS LEAGUES SHOULD CREATE A DONOR-ADVISED FUND FOR THEIR CHARITABLY-INCLINDED ATHLETES

DATELINE:  January 19, 2011, Chicago

Dallas Morning News reporter Scott Farwell has an excellent article in yesterday’s newspaper on athlete-sponsored charities.  Some Dallas Sports Stars’ Charities Waste Money, Inefficient.  The storyline, however, is...

ARE THE FOLKS RUNNING SUSAN G. KOMEN FOR THE CURE A BUNCH OF JERKS?

DATELINE: January 5, 2011, Chicago

Like many Americans, we get much of our news from Jon Stewart and Stephen Colbert.  This past Monday, Colbert came back from his extended holiday break.  He certainly caught our attention during his Tip of the Hat, Wag of the Finger segment, reporting that the Susan G. Komen For the Cure (SGK),  a well-known charity that funds breast cancer research and provides assistance to those diagnosed with breast cancer, was suing other charities that had incorporated “the Cure” into their names or promotional efforts. 

In following up on Colbert’s crack reporting, we found that while Colbert had awarded SGK a...

WE GET WE GET THE GOVERNMENT THAT WE FUND: U.S. NAVY VETERANS ASSOCIATION

DATELINE: January 3, 2011, Chicago

Over a month ago we read several articles about Bobby Thompson, the U.S. Navy Veterans Association, and allegations of a massive fraud.  We were initially attracted to the story, hoping to gain more insight into internal controls, but the facts offer few such insights.  Apparently the charity in question was a shell, used to defraud members of the public.  There has always been fraud and unfortunately there always will be fraud.  Rather than perpetuating a fraud against a charity from the inside, this scam was directed at the public

Jeff Testerman and John Martin of the St. Petersburg Times have written a lengthy article offering some reasons why the alleged fraud may have been so successful—purportedly raising $100 million.  Navy Vets Made an Unchecked Rise Into Elite Circles (December 27, 2010).  Much of what Testerman and Martin report is...

WHAT DARTMOUTH AND CORNELL STUDENTS CAN TEACH ALL CHARITIES

DATELINE: November 1, 2010, Chicago

Recent grads at Dartmouth College and Cornell University have a lot to learn even though they attended supposedly fine schools.  Their recent boorish behavior also may be instructive for those charities that use high-pressure tactics to raise money.

Last week, Stephanie Strom dropped a bombshell on the pages of the New York Times.  Student Feel Peer Pressure to Donate  (October 27, 2010).  Colleges and universities like to get their students in the habit of giving even before they have left the campus.  Enter the...