Charity Governance

SUZANNE GARMENT AND LESLIE LENKOWSKY GET IT VERY WRONG

DATELINE: June 23, 2011, Chicago

Suzanne Garment and Leslie Lenkowsky are well-known and respected people, and rightfully so.  But their op-ed piece in today's Wall Street Journal--The IRS's Charity Purge--is simply wrong.  The two are troubled by the IRS's recent announcement that somewhere around 275,000 nonprofit organizations have lost their tax-exemption for failing to file a tax return for three consecutive years.

Early on in the article, Garment and Lenkowsky acknowledge that Congress' decision to enact the Pension Protection Act of 2006 is the genesis of the perceived problem.  The PPA added a provision requiring all tax-exempt organizations to file a tax return.  The congressional penalty for failure to file for a three-year period was loss of exemption.  Congress was warned at the time...

THE ELEVENTH DEADLY SIN: CONGRESSIONAL MEDDLING IN IRS EXAMINATIONS

DATELINE: June 20, 2011, Chicago

House Ways and Means Chairman Dave Camp decided to flex his muscles when he wrote to IRS Commissioner Douglas Shulman demanding information about the IRS employees who decided to assert gift tax on contributions to Section 501(c)(4) organizations.  We have always thought that the law did not support imposition of gift tax on these contributions, while acknowledging that there is an issue.  Most knowledgeable tax practitioners have viewed imposition of the tax as a possibility.

So now we have Chairman Camp...

NCAA PRESIDENT TALKS OUT OF BOTH SIDES OF HIS MOUTH--THE FIESTA BOWL SCANDAL--PART III

DATELINE: April 1, 2011, Chicago

In commenting on the Fiesta Bowl scandal, NCAA President Mark Emmert in his annual State of the NCAA/College Athletics address yesterday said,"You can't indict the entire bowl system because of what's gone out there".  Mark Blaudschun, Emmert Says Fiesta Scandal A Warning, Boston Globe (April 1, 2011). Emmert then continued:

My hope is that it will also serve as a warning shot that every community that runs a bowl game makes sure they’re doing the oversight compliance and due diligence to make sure their bowl games are well run. We have reason to believe that’s not the case.

The Final Four Questions... 

THE NONPROFIT SCANDAL OF THE YEAR: THE FIESTA BOWL, PART I

DATELINE: March 31, 2011, Chicago

The likely winner of the coveted "Nonprofit Scandal of the Year" annual award is the Fiesta Bowl, which is the alter ego of four Section 501(c)(3) organizations--the Arizona College Football Champion, the Arizona Sports Foundation, Fiesta Events, and the Valley of the Sun Bowl Foundation-- acting in concert.  Pretty good feat given that it isn't even April. 

No doubt you've read the headlines.  The New York Times summed it up...

SENATOR GRASSLEY’S LATEST PROPOSAL IS A CLUNKER: KEEP THE PROHIBITION ON CAMPAIGN INTERVENTIONS

DEADLINE: January 13, 2011, Chicago

Buried deep in the staff memo accompanying Senator Grassley’s January 6, 2011 press release is one of the...

SENATOR GRASSLEY HUFFS AND PUFFS, BUT THE HOUSES OF WORSHIP ARE STILL STANDING

DATELINE: January 10, 2011, Chicago

In November 2007, Senator Charles Grassley stood at the door of six well-known ministries, demanding that they reveal their inner workings.  Unlike other charities that Senator Grassley has investigated, these were churches, protected by the imprimatur of the Constitution.  The question we and many others asked at the time was whether...

SENATOR GRASSLEY, CAN WE INTRODUCE YOU TO YOUR COLLEAGUE, REPRESENTATIVE JOE BACA?

DATELINE: September 7, 2010, Chicago

In our November 2006 article, The Wild, the Innocent, and the E Street Shuffle, we identified three ways politicians use charities for their own purposes.  One was providing a vehicle for powerful interests to buy access.  A second was to use the charity as a form of patronage.  In an appendix to the article, we identified 57 cases of how politicians use charities to those and what we consider other inappropriate ends.  Over the ensuing four years, we have seen plenty of other cases.  In Saturday’s New York Times, Eric Lipton adds more examples to the list.  Congressional Charities Pulling in Corporate Cash (Sept. 5, 2010).

Senator Grassley is quite concerned about how charity executive supposedly abuse charities through compensation packages that the senator believes are too generous.  It is time that Senator Grassley focuses on...

SENATOR GRASSLEY IS OVERSTEPPING HIS BOUNDS BY REQUESTING DISCLOSURE OF DONORS

DATELINE:  August 13, 2010, Chicago

Senator Grassley may not like the fact that Section 501(c)(3) organizations are not required to disclose the names of their donors as part of the public disclosure portion of the Form 990.  However, the law couldn’t be clearer:  Public disclosure is...

SENATORS TOM COBURN AND CHARLES GRASSLEY SHOULDN’T BE CRITICIZING ANYBODY OVER FINANCIAL MANAGEMENT

DATELINE:  August 9, 2010, Chicago

We had some trouble staying current with U.S. nonprofit developments while we were in Australia, but we did see Stephanie Strom’s July 26, 2010 article in the New York Times—Lawmakers Seeking Cuts Look at Nonprofit Salaries.  As is usually the case, we were disgusted by many of the juvenile quotes from elected officials and industry watchdogs regarding nonprofit compensation.

The term “nonprofit” is a misnomer.  If an organization is to continue to grow, it must either...

WEAK KNEES, MISGUIDED TAX ADMINISTRATION, AND BAD POLICY: OFF WITH THEIR HEADS

DATELINE: May 20, 2010, Chicago

Monday (May 17) was the deadline.  If you were a small charity that had otherwise been exempt from filing a Form 990 or Form 990-EZ, you had to file an electronic postcard notifying the IRS that you still existed.  Even then, there were exceptions for churches and members of groups with group exemptions.  Congress—NOT THE IRS—enacted this mechanism in 2006 as part of the Pension Protection Act.  Lawmakers hoped the law would purge...