Charity Governance

"WERE [SIC] AN EDUCATIONAL INSTITUTION:" SHOULD THE IRS REVOKE LIBERTY UNIVERSITY’S TAX-EXEMPT STATUS?

DATELINE: May 24, 2009, Chicago

Well, well, well.  Everyone seems to wait for Memorial Day weekend to release explosive news.  North Korea literally set off a nuclear explosion in an underground test.  Now Liberty University has detonated its own bombshell.  It has decided that a student Democratic club will no longer be officially recognized as a university club. The club still will be permitted to meet on campus, but it no longer will be eligible for university funding and it can no longer use the university name, according to a May 25, 2009 press release from Jerry Falwell, Jr., the university’s Chancellor and President.  The Democratic club received an e-mail announcing the decision on May 15, 2009.  Anita Kumar, Liberty U. Drops Democratic Club: Party's Views Conflicts with Those of College, Administrators Say, Washington Post (May 23, 2009).

Unfortunately the press release does not discuss the status of the university’s Republican club, but we will assume for purposes of this post that there is one and that it continues to be recognized as an official club.  This assumption is supported by a report by an ABC News affiliate that the Republican club's status is untouched.  Jeremy Mills, University Rejects LU Democrat Club, ABC News--WSET-TV (May 22, 2009).  If Chancellor Falwell would like to challenge this assumption, he should issue a press release that lays all the salient facts out.  

Not surprisingly, there already is speculation whether the IRS will...

BLACK EQUITY ALLIANCE BOARD APPEARS TO GET IT BACKWARDS: EMPLOYMENT PRACTICES LAWSUIT OVER POLITICAL ACTIVITY

DATELINE: May 17, 2009, Chicago

The New York Times is reporting that Joyce S. Johnson has filed suit against her former employer, the Black Equity Alliance, over her recent dismal by the organization.  Michael Barbaro, Nonprofit Leader Says She Was Fired for Backing Bloomberg (May 13, 2009).   She had been the Alliance’s executive director.  Unfortunately the documents relating to the suit have not yet been posted by the New York Court System, but the Times article does provide a fair amount of detail.

Johnson alleges that she was fired because she endorsed...

SLUSH FUNDS: KEEP MONEY AWAY FROM CHARITIES CONTROLLED BY POLITICIANS AND THEIR CRONIES

DATELINE: February 12, 2009, Chicago

Yesterday we heard a local Chicago radio personality claim that other states and cities don’t have anywhere near the level of political corruption as Illinois and Chicago.  As Chicagoans who have watched how business is done in Chicago and Illinois during the last fifteen years, we understand his point.  You may have seen Gov Blago on the View or Letterman, but you have no idea how deep the corruption runs around here.  The Chicago Sun-Times is the paper of record when it comes to chronicling the investigations and arrests.  The Sun-Times regularly does full-page spreads mapping the connections between the parties.  Yet, Roe Conn, the afternoon drive-time talker, is wrong.  There is plenty of corruption to go around.  Detroit, Newark, Baltimore, New York, San Diego, Philadelphia, and other major Americans are not immune, as recent headlines have demonstrated.  Our attention was drawn to Philadelphia with the trial of Vincent Fumo now in full bloom. 

We’ve been following Fumo’s shenanigans for years.  We even have a Google alert set for him.  We seem to receive an alert every day.  You know the former Pennsylvania State Senator is in trouble.  Prosecutors have waited at least five years, but this week they got their opportunity to...

ILLINOIS AND CHICAGO POLITICS ADVERSELY AFFECT CHICAGO CHRISTIAN INDUSTRIAL LEAGUE: MISSION BECOMES SECONDARYAS FAMILY AND CRONIES FEED AT THE TROUGH

DATELINE: January 27, 2009, Chicago

Politician got on his jogging shoes
He must be running for office, got no time to lose
He been suckin' the blood out of the genius of generosity
       Bob Dylan, Summer Days from Love and Theft.

Governor Blagojevich has been on a media barnstorm the last several days.  Meanwhile back at the farm, the Illinois Senate continues with the trial that will inevitably result in Blago’s removal from office.  Lost in the excitement is what appears to be political cronyism at both the State of Illinois and City of Chicago levels.  This time the cronyism is affecting a 100-year old charity that aids the homeless.  Given this year’s brutal winter, the homeless sure do need the help of the Chicago Christian Industrial League.

NBCChicago reported last week that Patti Blagojevich was feeding

THE COMING SMACKDOWN: BE CAREFUL WHAT YOU PRAY FOR

DATELINE: June 23, 2008, Chicago

We had heard about the planned challenge by certain churches to the prohibition in Section 501(c)(3) on campaign interventions, but we found Russell Goldman's coverage on the ABC News Web site to be detailed and especially interesting. Pastors Challenge Law, Endorse Candidates From Pulpit, June 20, 2008. Goldman's article focuses on Gus Booth, the pastor of the Warroad Community Church in Minnesota. Pastor Booth told his congregation,

If you are a Christian, you cannot support a candidate like Barack Obama or Hillary Clinton for president.

That strikes us as a...

IRS REVIEWS CIRCUMSTANCES SURROUNDING OBAMA SPEECH AND DETERMINES THAT THERE WAS NO POLITICAL INTERVENTION BY THE UNITED CHURCH OF CHRIST

DATELINE: May 22, 2008, Chicago

Several months ago we wrote about a speech that Senator Barack Obama made at the United Church of Christ's 50th anniversary General Synod. The IRS received a complaint that the UCC was providing a platform for Senator Obama. The person filing the complaint apparently believed the UCC had engaged in a prohibited political intervention by providing Senator Obama a platform.

In our post, we called this one a close call. The invitation from the UCC to Senator Obama had been extended...

IRS TELLS CHARITIES WHAT IT WILL BE LOOKING FOR THIS CAMPAIGN SEASON

DATELINE: May 5, 2008, Chicago

Nobody doubts that we are in full campaign mode right now. In fact, most people are a little tired of the entire process notwithstanding the battle royale taking place on the Democratic side of the aisle. Last month, Lois Lerner, IRS Director, Exempt Organizations, issued a memo to her staff outlining the Service's goals regarding its Political Activities Compliance Initiative (PACI) for the current election cycle. Lerner was quick to note...

PROOF THAT CHARITIES DON’T WANT TO ENGAGE IN POLITICAL ACTIVITY: A FOODBANK LEARNS A LESSON

DATELINE: May 1, 2008, Chicago

All too often we see people suggest that the ban that prevents Section 501(c)(3) entities from intervening in political campaigns should be repealed. That would pose gigantic problems for charities, as the Wall Street Journal's Michael M. Phillips aptly demonstrates today in Payday Lender Presses Charity to End Support for Tighter Bills. The story involves lobbying rather than a campaign intervention, but the lesson is the same. Phillips reports that the Ohio Association for Second Harvest Foodbanks (OASHF) endorsed legislation coming out of the Ohio legislature that would have capped the interest charged on pay-day loans at 28% per annum. The endorsement appears to have been somewhat indirect.  OASHF had joined the Ohio Coalition for Responsible lending, an organization that supported the legislation in question.  OASHF's named appeared on the Coalition's Web site. 

We suspect that many might conclude that this is...

IS DETROIT MAYOR KWAME KILPATRICK ABUSING “HIS” CHARITIES?

DATELINE: April 2, 2008, Chicago

Trouble comes in threes, as we have recently seen with the sexcapades of our elected officials. First there was Eliot and the hooker, then there was Governor Patterson and his adulterous past, and finally there was Detroit Mayor Kwame Kilpatrick and his text messages. But the troubles may just be beginning for one or more of the four charitable organizations that Zachary Gorchow of the Detroit Free Press suggests might be funding the mayor's legal defense. Paying the Legal Bills: Mayor's Lawyer: No Public Funds, Mar. 25, 2008.

Gorchow's article focuses on how Kilpatrick will pay his high-priced lawyer's legal fees for representing him in the criminal proceeding involving eight felony charges. The charges grow out of an alleged effort to conceal an alleged...

THE IRS SHOULD PULL BARACK OBAMA’S TAX-EXEMPT STATUS

DATELINE: February 27, 2008, Chicago

The United Church of Christ (UCC) recently received a letter from the IRS stating that it was under investigation for a speech that Senator Barack Obama gave at the UCC's 50^th anniversary General Synod in Hartford Connecticut on June 23, 2007. The IRS is concerned that the UCC may have intervened in the presidential campaign by allowing Obama to make the speech that he made.

We have read the Obama speech and the Church's blog discussing the circumstances surrounding the speech. We have to say, the facts make this is a...