Wednesday, June 11, 2008

Another State Court Defines Charity to Require Free or "nearly free" goods or services

In In Re: Appeal of InterFaith Villa,  L.P.,  (June 6, 2008) another state court has defined charity as a concept that requires the provision of free or "very nearly" free goods or services:

Our Supreme Court in Lutheran Home adopted a strict two-element definition of "charity" or "charitable purposes," as required by Article 11, § 1(b)(2) and K.S.A. 79-201. 211 Kan. at 277-78. K.S.A. 2007 Supp. 79-201 Second follows the language of the constitutional charitable purposes exemption by exempting "[a]ll real property, and all tangible personal property, actually and regularly used exclusively for literary, educational, scientific, religious, benevolent or charitable purposes . . . ." Under the first part of the definition for "charity" adopted in Lutheran Home, the services must be provided "free of charge, or, at least, so nearly free of charge as to make the charges nominal or negligible." 211 Kan. at 278. Second, the services must be rendered to "those who are unable to provide themselves with what the institution provides for them, that is, they are legitimate subjects of charity." 211 Kan. at 278.

Nonprofit scholars and stakeholders have tried (mostly in vain) to define "charity" for tax purposes, with some arguring that the concept of charity should be returned to its roots -- alms for the poor [the "original intentors" lets call them] -- and others arguing that "charity" is an elastic concept that should be adapted to the needs of contemporary society.  Of course, its hard to justify applying the label "charity" to multi-million dollar hospitals, opera houses, and universities that serve primarily the wants (rather than needs) of humankind.  It seems though that states -- particularly in cash strapped times -- are taking the former approach.

dkj

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