Saturday, March 22, 2008

Florida Professor Held In Prison Beyond His Sentence For Failure to Testify Against Muslim Charities

On March 22, 2008, the Washington Post reported that the Bush administration has threatened to keep Sami al-Arian (the University of South Florida professor who was jailed for terrorism related charges) behind bars after he completes his prison term if he fails to "testify before a grand jury investigating allegations that Muslim charities aided terrorism organizations."  Here is an excerpt from the article:

Arian, who taught computer engineering at the University of South Florida, said he is declining to testify against the charities because he thinks they were falsely charged, "and he doesn't want them to be persecuted the way he was," said Jonathan Turley, his attorney. As a result, Arian is to be held at the Northern Neck Regional Jail in Warsaw, Va., on civil contempt charges.

Arian started a hunger strike early this month to protest his subpoena, and he was recently transferred to a prison medical center in North Carolina after losing six pounds in 36 hours. He went on a previous hunger strike that lasted months.

Arian was at the center of one of the nation's highest profile terrorism cases, accused of conspiracy to commit racketeering and murder and to aid a terrorist group, the Palestinian Islamic Jihad, in 2003.


Turley said his client's sentence should have ended a year ago. But a judge extended a civil contempt citation against Arian for refusing to testify before a grand jury investigating the charities.

For the entire story, see "Refusal Keeps Terrorism Convict in Prison: Former Professor Fights Attempts to Force His Testimony Against Muslim Charities" in the March 22, 2008, issue of the Washington Post.  For earlier blog posts about Muslim charities, see here and here.


March 22, 2008 in Federal – Executive, In the News | Permalink | Comments (0) | TrackBack (0)

Call for Papers: Real Estate Transactions in Troubled Times

The Association of American Law Schools' Section on Real Estate Transactions and its Section on Creditors' and Debtors' Rights are jointly sponsoring a call for papers on the topic "Real Estate Transactions in Troubled Times."  Here is the "call for papers" information:

Call for Papers—Real Estate Transactions in Troubled Times

Joint Extended Program of the AALS Section on Real Estate Transactions and the AALS Section on Creditors’ and Debtors’ Rights

The Section on Real Estate Transactions and the Section on Creditors’ and Debtors’ Rights have proposed a three-hour extended program on “Real Estate Transactions in Troubled Times” at the AALS annual meeting in San Diego on Saturday,  January 10, 2009.  See the program description below.  We are seeking six speakers for this program, with selection to be based on submission of papers.  We are looking for a range of approaches and subjects within the topic. The papers may be in any stage of development, from near final to early works in progress (the minimum is a three-page description of the topic and thesis).   The degree of completion may be taken into account in selection.  We do not plan a law review symposium around the papers, so you are free to submit your papers to any publication.  The deadline for paper submission is April 10, 2008, and selections of speakers will be made by April 24.  Commentators will also be included in the program.  Please submit your paper by e-mail to Jean Braucher at  The selection committee members are Professors Daniel B. Bogart of Chapman University, Jean Braucher of the University of Arizona, R. Wilson Freyermuth of the University of Missouri-Columbia, and Katherine Porter of the University of Iowa.  As is always the case with AALS annual meeting programs, presenters must pay their own travel and accommodation expenses, typically with the support of their home institutions.

Real Estate Transactions in Troubled Times—Program Description

The national mortgage meltdown and general recessionary pressures have changed the dynamics between buyers and sellers, borrowers and lenders, landlords and tenants, and others involved in real estate transactions.  This program will examine recent developments in both home and commercial real estate transactions.  Although much of the focus to date has been placed on residential mortgages, uncertainties in the market also significantly affect commercial real estate transactions.  For example, commercial property is often now securitized, just as home mortgages are.  When securitized transactions go into default, how can workouts be arranged?  To what extent are statutory changes needed, such as reinstatement and redemption rights, anti-deficiency protection and modification under the Bankruptcy Code?  How can foreclosed properties quickly be recycled to productive uses?  During difficult financial periods, real estate lawyers and debtor-creditor lawyers often find themselves plowing the same fields, with insolvency and bankruptcy planning important to each.


March 22, 2008 in Conferences | Permalink | Comments (0) | TrackBack (0)

Friday, March 21, 2008

How Can Nonprofits Better Connect to the LGBT Community?

The Association of Fundraising Professionals  recently published an interesting Kaleidoscope article about how fundraisers and nonprofits can better serve lesbian, gay, bisexual and transgender (LGBT) donors.  The article is entitled "Fundraising and the LGBT Community—Pitfalls and Possibility: An interview with Mickey MacIntyre of realChange Partners, LLC."  Here is an excerpt from the article:

How can nonprofits better connect to the LGBT community?

It starts at the top. They need to start by having strong conversations at the board level about what it means to be inclusive. For example, if the mission of an organization is tolerance, then including gays and lesbians in the conversation is very valuable. Suppose an organization supports equity, but a fundraiser is intolerant of different types of people. This is a problem that must be addressed by the organization. You can’t have an organization putting forward one ideal and individual staff members and volunteers exercising personal belief systems that run counter to that. As a donor, I would say, “I believe in this mission, but this guy asking me for the gift doesn’t seem to want to be in the same room with me.”  This will not lead to lifelong giving.

That said, I don’t expect organizations that do not have the same world view as I do to operate with the same tolerance and inclusiveness. If it is not in the organization’s mission, then I don’t push the issue. But if you have inclusivity as part of your mission and values, then you should think strongly about what that means for the LGBT community.

For the entire article, see "Fundraising and the LGBT Community—Pitfalls and Possibility: An interview with Mickey MacIntyre of realChange Partners, LLC" in the Spring 2008 issue (vol. 2, no. 1) of Kaleidoscope.


March 21, 2008 in Publications – Articles | Permalink | Comments (0) | TrackBack (0)

Administration of Charitable Trusts in Florida

Alex Espenkotter and Jennifer Facarazzo published Administration of Trusts in Florida: Charitable Trusts (Ch. 16).  Here is the introduction:

Charitable trusts are excellent vehicles for persons with philanthropic intentions to effectively give money to their favorite charitable causes while obtaining valuable tax benefits. Not to be overlooked, however, is the need for proper implementation and administration of these entities. “[F]or the estate planning attorney, [trustee,] and financial planner, a thorough study of the issues surrounding charitable... trusts is an imperative to their successful utilization.” Callister, Charitable Remainder Trusts: An Overview, 51 Tax Law. 549, 569 (1998). This chapter addresses various aspects of charitable trust formation and administration.

Initially, the discussion focuses on the numerous specific federal requirements and restrictions that must be followed and adhered to for proper administration of charitable trusts. The various types of charitable remainder trusts and charitable lead trusts are discussed in detail. Next, the chapter discusses the payment of annuity and unitrust amounts under various charitable trust arrangements. Thereafter, the availability of the charitable deduction and its computation is covered. Following that is a discussion of the income tax consequences associated with various charitable trusts. The focus then shifts to application of the private foundation rules to charitable trusts. The chapter concludes by addressing the duties and powers of trustees and the compensation for trustees and attorneys of charitable trusts. These latter two subjects are also discussed in depth in Chapters 2 and 13, respectively, of this manual. For a discussion of the modification of charitable trusts, see §8.16 of this manual.

For the entire chapter, see Administration of Trusts in Florida: Charitable Trusts (Ch. 16) (available at the Florida Bar website CLE section).


March 21, 2008 in Publications – Books | Permalink | Comments (0) | TrackBack (0)


Marco A. Castaneda, John Garen and Jeremy Thornton published "Competition, Contractibility and the Market for Donors to Nonprofits" in the May 2008 issue of Journal of Law, Economics, & Organization.  Here is the abstract:

This article investigates theoretically and empirically the effects of competition for donors on the behavior of nonprofit organizations. Theoretically, we consider a situation in which nonprofit organizations use donations to produce some commodity, but the use of donations is only partially contractible. The main results of the model indicate that an increase in competition (i) decreases the fraction of donations allocated to perquisite consumption and (ii) increases the fraction of donations allocated to promotional expenditures. Moreover, the effects of competition are magnified by the ability to contract on the use of donations. These hypotheses are tested with data on the expenditures of nonprofit organizations in a number of subsectors where competition is primarily local. We use across–metropolitan statistical areas' variation to measure differences in competition and proxy contractibility by the importance of tangible assets, which are more easily observed by donors. The estimated effects of competition and contractibility are consistent with our model. 

For the entire article, see "Competition, Contractibility and the Market for Donors to Nonprofits," 24 J.L. Econ. & Org. 215 (2008), on the Journal of Economics & Organization website.


March 21, 2008 in Publications – Articles | Permalink | Comments (0) | TrackBack (0)

Thursday, March 20, 2008

International Public Health Work with NGO's

Karen E. Gieseker of the Institute of Public Health at Georgia State University will present "International Public Health Work with NGO's" on March 25, 2008, at Georgia State's Andrew Young School of Policy Studies.  Here is the text of the announcement:

Seminar Announcement

What: The Nonprofit Studies Program of the Andrew Young School of Policy at Georgia State University presents its Brown Bag Seminar Series in Nonprofit Research.

Who: Karen E. Gieseker of Institute of Public Health, GSU will address the topic: "International Public Health Work with NGOs"

When: Tuesday, March 25, 2008 at 12:30 PM

Where: Seminar Room #749 at the Andrew Young School of Policy Studies Building at 14 Marietta Street, NW

The purpose of these seminars is to discuss research-in-progress by faculty associated with the nonprofit program. We invite students, faculty and interested members of the community to join us!

Drinks and cookies will be served.

Listed below are the remaining seminars

Tuesday, April 15, 2008, 12:30 PM Prof. Russell James Dept. of Housing & Consumer Economics, UGA Health, wealth, and charitable estate planning: A longitudinal examination of testamentary charitable giving plans

Tuesday, April 22, 2008, 12:30 PM Bonnie Koenig Going International, Chicago, Illinois US Nonprofits Working Internationally


March 20, 2008 in International, Paper Presentations and Seminars | Permalink | Comments (0) | TrackBack (0)

GAO Report on Vehicle Donations to Charities

In February 2008, the General Accounting Office released a Report to House Ways and Means on vehicle donations by charities entitled "Selected Charities Reported Mixed Experiences after Changes in Vehicle Donation Donation Rules."  Here is an excerpt from the report:

Selected charities reported mixed experiences after the rules related to the amount taxpayers could claim as a deduction for donating a vehicle to a charity changed.5 We interviewed officials from 10 of the 65 charities we previously interviewed in 2003 who still operate a vehicle donation program. They reported varied experiences in the number of, quality of, and revenue from donated vehicles; some changes in their business operations; and mixed experiences with administering the changes in the rules. Some charities experienced a substantial decline in the number of vehicles donated from 2003 to 2006. For those same years, of the 10 charities covered in our in-depth interviews, 6 reported decreases in the number of vehicles donated, 3 reported increases, and 1 did not provide data. However, when comparing years 2005 to 2006, 4 of the 5 charities that reported using one of the exceptions to the gross proceeds of sale rule also reported an increase in the number of vehicles donated. Charity experiences with the quality of donated vehicles varied. Three of the 10 charities reported an increase in quality, 3 reported a decrease, and 4 reported no change.

In terms of vehicle donation revenue, officials from 6 of the 10 charities reported a decrease from 2003 to 2006, 3 reported an increase, and 1 did not provide data but reported that the rule changes had no effect on the number of vehicle donations or revenue. We did not find a consistent pattern when comparing the number of vehicles donated with the revenue from the vehicle donation program or the charity’s overall revenue. To deal with the decrease, some charities changed their fund-raising activities and some decreased services, such as reducing the number of hours services would be provided. Examples of changing business operations include using minimum bids at auctions, selling vehicles online, and selling vehicles directly to the public rather than to wholesalers. Finally, all 10 of the charities reported that they had experienced an increase in administrative burden because of the increase in reporting requirements, but the charities were able to accommodate the increase in paperwork.

For the entire report, see "VEHICLE DONATIONS: Selected Charities Reported Mixed Experiences after Changes in Vehicle Donation Rules" at the GAO website. (Hat Tip: TaxProf Blog)


March 20, 2008 in Federal – Executive | Permalink | Comments (0) | TrackBack (0)

Lieberman Defends Obama Speech, Requests Explanation of IRS Investigation

Here is the full text of Senator Joe Lieberman's letter to the IRS regarding IRS' investigation of Obama's June speech before the United Church of Christ.

March 14, 2008

Dear Acting Commissioner Stiff:

On February 20, 2007, the Internal Revenue Service (the "Service") sent the United Church of Christ (the "UCC") national office a letter, stating that, based on Sen. Barack Obama's June 23, 2007, speech at the UCC's 50th General Synod in Hartford, Connecticut, the Service has formed a "reasonable belief" that the UCC violated the Internal Revenue Code's ban on partisan electioneering by churches. I write to express my concerns about that letter and to ask the Service to (1) explain the specific process by which it establishes the statutorily required "reasonable belief" of improper activity and (2) clarify its public guidance on the permissibility of candidate appearances at churches.

Under Section 7611 of the Internal Revenue Code, the Service may initiate a church tax inquiry only if "an appropriate high-level Treasury official reasonably believes (on the basis of facts and circumstances recorded in writing)" that a church may not qualify for tax exemption or may be engaged in taxable activities. As I understand it, before sending the February 20 letter, the Service at no point contacted the UCC to seek any information concerning Sen. Obama's speech. But as has been widely reported in the Connecticut media, the UCC took significant precautions to ensure that Senator Obama's appearance at the Synod satisfied all legal requirements. For instance, UCC leaders told Synod attendees, on several occasions and in advance of Senator Obama's speech, that the UCC had invited him before he launched a presidential campaign, and also that Senator Obama was invited to speak on a topic of interest, rather than his candidacy. UCC leaders also directed attendees to refrain from bringing signs and campaign paraphernalia into the Synod facility. Based on those precautions, I would expect that had the Service contacted the UCC before sending its letter, the Service's concerns would have been addressed. This absence of communication with the UCC is what spurs my request that you explain, in detail, the Service's procedure for satisfying its statutory obligation of forming a "reasonable belief" that a church has engaged in improper political activity.

Moreover, I find the Service's inquiry especially troubling because of the Service's inadequate guidance in this area. Publication FS-2006-17, which the Service issued in February, 2006, and posts on its website, states that candidates may be invited to speak at churches in their individual capacity, and that depending on the circumstances, such invitations can be granted "without jeopardizing its tax-exempt status." A subsection of that publication elaborates that:

Candidates may . . . appear or speak at organization events in a non-candidate capacity. For instance, a political candidate may be a public figure who is invited to speak because he or she: (a) currently holds, or formerly held, public office; (b) is considered an expert in a non political field; or (c) is celebrity or has led a distinguished military, legal, or public service career. A candidate may choose to attend an event that is open to the public, such as a lecture, concert or worship service. The candidate's presence at an organization-sponsored event does not, by itself, cause the organization to be engaged in political campaign intervention.

This guidance implies that an individual who is well-known to be a candidate can become a "non-candidate" for the purpose of a church appearance. But the guidance does not explain how such a candidate can be transformed into a non-candidate for purposes of the appearance. Therefore, I ask you explain to me, and to the public, how this transformation occurs. In the context of the UCC Synod, it appears that inviting a well-known member of a denomination to speak satisfies standards (a) and (c). A logical inference to the issuance of your letter, therefore, is that if a speaker, invited in a non-candidate capacity, slips into "candidate" mode, then the Service will still hold the sponsoring church liable -- even if the church took significant precautions to prevent political discourse. I request that you confirm whether this inference accurately characterizes the Service's position.

Throughout my career in the Senate, I have supported the strong and fair enforcement of our nation's tax laws, including laws applicable to religious institutions. But I am concerned about the chilling effect on legitimate activity by religious organizations that results from initiating a church tax inquiry without first satisfying the reasonableness standard, and I am further concerned by the lack of clear guidance in this area.

I look forward to your prompt and thorough reply.

                                  Sincerely yours,

                                  Joseph I. Lieberman
                                  United States Senator

For prior stories on this topic see here, here, and here


March 20, 2008 in Church and State, Federal – Legislative | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 19, 2008

Regional People of Color Legal Scholarship Conferences

We are aware of at least three regional people of color legal scholarship conferences coming up this year.  Those of you in law school teaching who write and research in the area of nonprofit and philanthropy law, and who have an interest issues of concern to minority populations, should contact the organizers of these conferences if you would like to present your work-in-progress.  If anyone is aware of currently scheduled presentations at these POC conferences that involve nonprofit or philanthropy law, please send us the details so that we can let other law professors know about these programs.

The first POC legal scholarship conference is a joint conference by Western Law Teachers of Color (WLTC) and the Conference of Asian Pacific American Law Faculty (CAPALF) entitled "Legacies: When is the Past the Past?"   The conference will be held on April 24-26, 2008, at University of Denver School of Law.  For information, visit the conference website at or email the conference organizer, professor Robert Chang, at

The second POC legal scholarship conference is the Southeast/Southwest People of Color Legal Scholarship Conference 2008 entitled "Each One Teach One."  The conference will be held on April 10-13, 2008, at North Carolina Central University Law School.  For information, visit the conference website at or contact the conference organizer, Professor Wendy Scott, at wscott@NCCU.EDU.

The third POC legal scholarship conference is the Midwestern People of Color Legal Scholarship Conference.  The conference will be held on May 29 - June 1, 2008, at Hamline University School of Law.  For information, contact the conference organizer, Professor Neil Williams, at


March 19, 2008 in Conferences | Permalink | Comments (0) | TrackBack (0)

Uganda's New Services Tax Proposal

In light of the situation in Florida (possibly reducing school property taxes in exchange increased sales tax on services, increased sales tax rates and reduced sales tax exemptions), I found this editorial about a new services tax proposal in Uganda quite intriguing.  After Uganda eliminated its Graduated Tax (referred to in the editorial as the "GT"), it failed to look for viable alternative sources of government revenue for local governments.  This has, in turn, forced the central government and local governments to seek out various new forms of taxes.  While the central government looks to taxes on services, local governments look at things like taxes on church marriages (previously blogged here).  Here is a short excerpt from the editorial in The Daily Monitor:

Currently local governments are faced with significant shortages of locally generated revenue hence their reliance on central government, a significant threat to decentralisation. The above situation hasn't been helped by the rampant creation of new local government units especially districts, most of them not economically viable.

The result has been increased cost of public administration and unless the above trend is checked, Ugandans should brace themselves to pay many other taxes of a similar nature. For instance, it has been reported that in a bid to fill the gap created by suspension of GT, Sironko District Local Government (DLG) plans to levy a new tax on traditional and church marriages.

This follows a resolution passed barely a year by Bududa local government to tax traditional marriage (Kwanjula) ceremonies. The local service tax is therefore meant to salvage the desperate situation currently obtaining in most local governments but the implementation of the tax seems tricky. The tax is not much different from GT and one wonders why government should re-introduce GT in a new form.

For the entire story, see "Uganda; Local Service Tax; It's Double Burden" in the March 19, 2008 issue of The Daily Monitor.


March 19, 2008 in In the News, International | Permalink | Comments (0) | TrackBack (0)

Florida's Tax Swap Proposal - Eliminate School Portion of Local Property Tax in Exchange for Higher Sales Tax Rates, Fewer Exemptions and a Broader Base

On March 18, 2008, the Miami Herald reported that  Florida's Taxation and Budget Reform Commission has agreed to place before Florida voters a proposal to lessen local real property taxes in that state by 1/4 to 1/3 of present amounts (a total of about $9.3 billion).  The reduction occurs by eliminating the portion of the property designated by the state as being for public schools.  Florida legislators say that they can only pay for this size of a property tax reduction by increasing sales tax revenues.  The only way to increase sales tax revenues is by increasing the rate (Florida plans a 1 penny sales tax increase which will raise about $4 billion), reducing exemptions or expanding the base.  This last issue (expanding the sales tax base) indicates that Florida will likely have a big "tax on services" fight - yet again.  Here is an excerpt from the article:

''We think this proposal will force the Legislature to adopt services taxes because the numbers just aren't there,'' said Allan Douglas of the National Federation of Independent Business.

Commissioner Randy Miller, a member of the Florida Retail Federation, was one of four members voting against the proposal.

''We're not doing anything here except changing who pays the bill,'' he said. If legislators were to eliminate all tax exemptions on businesses, he said, they will raise only $2.13 billion a year and will have nowhere else to go except to tax services.

Proponents of the plan argue that the elimination of one-fourth to one-third of all property taxes will spur the economy, stimulate housing sales and business growth and revive Florida's economy. That, in turn, would increase collections of other taxes such as the documentary stamp tax on real-estate transactions and the sales tax, they said.

For the entire story, see "Property-tax proposal could give South Florida big savings" in the March 18, 2008, edition of the Miami Herald.


March 19, 2008 in In the News, State – Legislative | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 18, 2008

Harvard Law School Plan - What Is "Public Interest"?

We previously blogged about the Harvard Law school plan to waive third year tuition for law students who decide to do public interest work.  Some have asked "What is public interest?"  Here is an excerpt from the plan that answers that question:

Public Service Job Requirements

Recipients of PSI grants must take an eligible public service job immediately after graduating from law school and must remain in an eligible job for 5 years. Graduates with PSI grants must report their job status to HLS at regular intervals. Final decisions on job qualification will be made by an HLS Public Service Initiative Committee. Under the Initiative, public service work is defined as:

  • Any full time job for a governmental unit, which includes federal, military, state, or local government, or the overseas equivalent.
  • Any full time job for a nonprofit 501(c)(3) organization or the overseas equivalent, with the exception of jobs at institutions of higher education.
  • Any full time job for a political campaign.

Up to one year of a clerkship can qualify toward the 5 year commitment. Graduates taking a second clerkship year must complete 4 more years of public service work after the second clerkship year.

Private sector, private public interest firms, and academia
Jobs in the private sector, including jobs at private public interest firms, and jobs at institutions of higher education do not meet the public service work requirement of the Public Service Initiative. Graduates in these jobs can qualify for LIPP assistance based on their income and eligible debt.

Self-employment, part-time work, and periods of unemployment
Self-employment, part-time work, and periods of unemployment do not meet the public service work requirement. Temporarily unemployed graduates may ask to have the PSI grant placed in short-term suspension rather than enter repayment.

For the text of the entire plan, see "Public Service Initiative Program Guidelines" on the Harvard Law School Website.


March 18, 2008 in In the News | Permalink | Comments (0) | TrackBack (0)

Constructive Receipt and Charitable Contributions in the Paul McCartney v. Heather Mills Case: Judge doubts Mills' Charity Work For Lack of Documentation

The media can be voyeuristic, let's admit, because all of us are voyeuristic.  The media gives us what we want.  Ok, I admit it.  I've been reading the judge's ruling in the Paul McCartney Heather Mills divorce.  At least now, though, I can say I had good academic reasons to do so!  As I tell my sometimes slumbering students, "its all about tax!"  Figure this stuff out and you will know the meaning of life!

Anyway, one of the issues relating to how much McCartney would be required to pay Mills (he ended up having to pay her a paltry $50 million) is whether Mills was independently wealthy before she met McCartney -- don't ask me why, I don't do family law.  Anyway, Mills claimed as much but her tax returns did not support that claim.  This was largely so, according to Mills, because she routinely donated 80 to 90% of her compensation to charities.  That is, instead of accepting the money and then sending it to charity, she directed that the money be paid directly to charity, apparently reporting neither amounts on her tax return.  Sounds like constructive receipt followed by charitable contribution deductions to me!  But then, I could be wrong and in any event, the case involved British law.  McCartney is an incredible singer, I'm sure, but the judge's order (starting in paragraph 21) shows just how hard Mills worked for charities over the years.  And take a look at what happens in paragraph 23 (a section 104 event!).  Unfortunately, Mills' tax returns did not support her assertion that she was indeed wealthy, but had given all or most of her money to charity.  Here is a brief interesting excerpt (inquiring minds want to know, right?):

18. The wife, who is now 40 years old, spent much of her childhood in Northumberland. She seems to have had a rather troubled childhood. When she was 14 years old she had to move to live with her mother in London. She left her mother’s home aged 15. She took a number of jobs.

19. When she was 17 years old she started modelling. After a modelling competition she got a job presenting a TV series. More modelling jobs followed. When she was 20 years old (1988) she went to live and work in Paris.

20. In 1989 she married. The union was childless. She and her former husband ultimately divorced. She learned to ski and became an instructor. She learned to ski in Slovenia.

21. During the crisis that affected the old Yugoslavia the wife became appalled by the fighting and the terrible injuries suffered particularly by the civilian population. She became heavily involved in charitable works joining convoys of trucks taking food and clothing to Croatia. She became very conscious of the terrible injuries inflicted by landmines. She saw a number of people who had lost limbs, particularly legs.

22. In 1993 her trips to Croatia diminished as her modelling career in the UK began to prosper. At paragraph 26 of her affidavit of 30 January 2008 she says: "In early 1993 my trips to Croatia became less and less frequent, as my modelling career in the UK began to take off. I got work modelling all over the world including in the Bahamas, Malaysia, America and the Middle East. I won lucrative contracts with Marks and Spencers, River Island and Slix, the swimwear company …. I believe I was earning at that time in the region of £200,000 per annum. I do not have my tax returns although I did request the same from the Inland Revenue who informed me by letter that they are not available…."

23. On 8 August 1993 she was on a zebra crossing in London and was unfortunately hit by a police motorcyclist. Her left foot was severed above the ankle. She suffered head injuries, cracked ribs, a punctured long and multiple fractures of the pelvis. Her left leg was amputated 6 inches below the knee. In October 1993 she underwent another operation which shortened her leg still further but still below the knee.

24. The wife says that, following media enquiries, she gave interviews and earned about £180,000 in 10 days. She wrote a book "Out on a limb", the proceeds of which were donated to transport artificial limbs to Croatia. She says that thereafter she did much public speaking and her earnings were in the range of £300,000 per annum.

25. She became involved in fundraising for a number of charities – see in particular her description at paragraph 32 of her affidavit. She continued to do an enormous amount of charitable work in particular being involved in transporting artificial limbs to Croatia. She was by now, she says, an established public speaker.

26. At paragraph 45-47 of her affidavit she says: with Anne & Nick, Keanu Reeves interview, BBC TVAM, Chill Out With Heather series (where I interviewed a number of well known people), The Holiday programme, Wish You Were Here, Travelogue, First Say (after Panorama show), radio hosting, The General hospital, Richard and Judy, etc etc the list is endless. I also continued modelling. I would contribute a lot of my earnings to charity….

"After my accident in 1993, I raised money through public speaking in aid of charities. I became one of the top 10 female speakers in Europe. Between 1993 and 1999 when I met Paul my income spiralled for example in 1997 I had a modelling contract for £750,000; I wrote, with a ghost writer, a best selling autobiography called Out on a Limb and in the year prior to marrying Paul I earned $1,000,000 for 14 days work. In order to support myself and to help with my charity work, I did a lot of television presenting, for example, Good Morning

..........  The judge discusses evidence that Mills' wealth is exaggerated because her tax returns did not prove that she made such sums. 

32. The wife’s riposte is that much of her earnings, which are not included in the tax returns, were sent direct to charities of her nomination. In her evidence she told me that as much as 80% or 90% of her earnings went direct to charities. However, the wife had to accept in her cross-examination that there was no documentary evidence, for example letters from the relevant charities, that her fees were sent direct to charities. In her Answers to a Questionnaire of 6 February 2007 the wife, having been asked to set out in a schedule the income earned by her and sent direct to charities for the years 1997 and 2000 inclusive, replied that she did not have the records requested to enable her to complete a schedule. Furthermore, her assertion that she gave away to charity 80% to 90% of her earned income is inconsistent with having £2m-£3m in the bank in 1999.

Ok.  Enough of that.  Back to work.


March 18, 2008 | Permalink | Comments (0) | TrackBack (0)

Six Best Practices for Nonprofit Organizations

On March 14, 2008, the St. Louis Post-Dispatch published an article about a new book - "Forces of Good" by Leslie Crutchfield and Heather McLeod Grant - on the six best practices for nonprofit organizations.  Here is an excerpt from the text of the article:

Advocate and serve. Crutchfield and Grant say the best in the world of nonprofits bridge the divide between service and advocacy. An example is the expansion of a North Carolina agency call Self-Help. It started as an agency assisting the needy in building houses and grew to become a powerful advocate for predatory-lending policy reforms across the country.

Making markets work. Nonprofits succeed when they embrace an entrepreneurial spirit. Often disavowed by nonprofits, Environmental Defense partnered with fast-food giant McDonalds. The result was a dramatic reduction of the company's solid wastes by encouraging the switch to environmentally friendly materials.

Inspire evangelism. This is done when volunteers see their role beyond fundraising and advice to that of missionaries helping sustain the group's mission. Habitat for Humanity exemplifies this through its meteoric rise from local Georgia roots to a global organization with a $1 billion budget that has successfully mobilized the public worldwide.

Nurture nonprofit networks. Collaboration is not a common practice among nonprofits and yet the authors are emphatic that the best nonprofits thrive when they share their wealth, expertise and talents with their peers. The Exploratorium in San Francisco is cited for its collaborative success from its informal network.

Master the art of adaptation. Demonstrating the willingness to make drastic changes to affect the overall goals of an organization is key to nonprofit success. Share Our Strength switched from direct mail to special events for fundraising, yielding extraordinary results for the organization.

Share leadership. Recognized as one of the attributes that is paramount to becoming a force for good, sharing leadership is more about developing others and a team orientation within the organization and even the board.

For the entire article, see "Finally, the 'Good to Great Book' for non-profits" in the March 14, 2008, issue of the St. Louis Post-Dispatch.


March 18, 2008 in In the News, Publications – Books | Permalink | Comments (0) | TrackBack (0)

Harvard Law to Offer Free Third Year Tuition to Law Students

On the heels of the recently blogged sharp increase in financial aid to its undergraduate students, Harvard Law School just announced that it will waive the third year tuition for its law students who work for government or for a nonprofit for five years after graduation.  Here is an excerpt:

The program, to be announced Tuesday, would save students more than $40,000 in tuition and follows by scant months the announcement of a sharp increase in financial aid to Harvard’s undergraduates. The law school, which already has a loan forgiveness program for students choosing public service, said it knew of no other law school offering such a tuition incentive.

“We know that debt is a big issue,” said Elena Kagan, dean of the law school. “We have tried to address that over the years with a very generous loan forgiveness program, but we started to think that we could do better.”

For the entire story, see "Harvard Law, Hoping Students Will Consider Public Service, Offers Tuition Break", in the March 18, 2008, New York Times.


March 18, 2008 in In the News | Permalink | Comments (0) | TrackBack (0)

Monday, March 17, 2008

Pennsylvania Poised to Take More Money, in the Form of Fees and Taxes, from Nonprofit Coffers?

On March 10, 2008, we blogged about the growing wealth of nonprofit institutions in Pittsburgh.  Well, on March 15, 2008, the Pittsburgh Tribune-Review published an article suggesting one way in which Pennsylvania and its local governments might reap a share of the increasing nonprofit wealth.  The article speaks of a combination of service fees charged to tax-exempt owners of buildings in excess of 5,000 square feet and a special property tax of 10% of assessed value for the first five years that a nonprofit owns newly-acquired real property in the state.  For the full story, see "Charges on nonprofits proposed as alternative to drink tax" in the March 15, 2008, issue of the Pittsburgh Tribune-Review.  For additional coverage of this story, see "State to weigh nonprofit service fees Legislation would allow county to levy charges on tax-exempt properties" in the March 15, 2008, issue of the Pittsburgh Post-Gazette.


March 17, 2008 in In the News, State – Legislative | Permalink | Comments (0) | TrackBack (0)

New Hampshire Supreme Court Upholds Charitable Status for Artist Colony in Face of Private Benefit Challenge

In an interesting state law opinion relating to the federal "public benefit" doctrine, the New Hampshire Supreme Court concluded in Peterborough v. MacDowell Colony, Inc. (Download Peterborough.pdf) that an organization that operated an Artist Colony in Peterborough was entitled to state tax exemption as a charitable organization.  The interesting thing about the case is that it involves a statute that apparently defines "public benefit" by reference to whether the organization serves a sufficiently large "indefinite segment of the general public:"

In turn, RSA 72:23-l defines charitable as follows:

The term "charitable" as used to describe a corporation, society or other organization within the scope of this chapter, including RSA 72:23 . . . , shall mean a corporation, society or organization established and administered for the purpose of performing, and obligated, by its charter or otherwise, to perform some service of public good or welfare advancing the spiritual, physical, intellectual, social or economic well-being of the general public or a substantial and indefinite segment of the general public that includes residents of the state of New Hampshire, with no pecuniary profit or benefit to its officers or members, or any restrictions which confine its benefits or services to such officers or members, or those of any related organization. The fact that an organization’s activities are not conducted for profit shall not in itself be sufficient to render the organization "charitable" for purposes of this chapter . . .

The issue in the case was whether the artist colony served an indefinite segment of the public even though it limited residence in the colony during its 3 separate four month sessions to a limited number of artists who are provided free room and board, along with supplies, to create their artistic creations (literature, music composition, visual art, film and video, architectural design, and "interdisciplinary art."  Organizations designed to assist "starving artists" always raise "private benefit" issues at the federal level, though usually for different reasons that those stated in the New Hampshire opinion.  At the federal level, the private benefit doctrine is implicated because the organization actually promotes individual artist's financial interests by working to generate a market for his or her work.  See, e.g., Aid to Artisans v. Commissioner, 71 T.C. 202 (1978)In the New Hampshire case, the New Hampshire Supreme Court made the subtle distinction not often made at the federal level, to wit:  private benefit is sometimes an inevitably exclusive means by which to achieve a public good.  The failure to recognize this Adam Smith type of sentiment in the private sector, for example, is one of the reasons why joint ventures are subject to such withering scrutiny.  In the New Hampshire case, though, the New Hampshire Supreme Court stated:

The town first contends that "MacDowell is not a public charity because the creative artists who gained access to the Peterborough property in 2005 were not a substantial and indefinite segment of the general public." The town’s argument assumes that the artists admitted to the artist-in-residence program are its sole beneficiaries. In its tax-exempt survey, however, MacDowell asserted that its mission advances "the intellectual well being of the general public." (Emphasis added.) The trial court concurred, at least in part, with MacDowell’s assertion, concluding that by "supporting the artistic process," MacDowell benefits "at the very least, artists across the world, and, in a broader sense, the general public." The court further concluded that MacDowell’s artist-in–residence "program primarily benefits society as a whole." We agree. Therefore, performance of MacDowell’s mission satisfies RSA 72:23-l without inquiry into whether Colony Fellows constitute "a substantial and indefinite segment of the general public," RSA 72:23-l.

The town nevertheless urges us to reject the proposition that "the beneficiary of the Peterborough property is the general public based upon what [the admitted artists] may or may not do at the Peterborough property." The town’s argument, however, conflates the second and third ElderTrust factors – the requirements of public service and of use and occupancy. The relevant inquiry is not whether the public, or a substantial and indefinite segment of it, benefits from the organization’s property, but whether the public, or a substantial and indefinite segment thereof, benefits from the organization’s performance of its stated purpose. See ElderTrust, 154 N.H. at 697-98. Thus, the town’s argument that "MacDowell’s service is room, board, and a studio, which is entirely consumed by the creative artists invited to the Peterborough property," misses the mark. While MacDowell does provide those services to the Colony Fellows, its charitable purpose is, as the trial court determined, "promotion of the arts." The provision of that service benefits a far greater segment of society than the artists who actually use MacDowell’s property and, in so doing, serves the "general public" as that term is used in RSA 72:23-l.

Suspicion rightly arises whenever a charitable group must conspicuously benefit a defined and apparently noncharitable group of people in order to achieve a greater public good, but suspicion ought not to lead to categorical proibitions, as is practically the case with joint ventures.  The separate concurring opinion, by the way, is particularly insightful in relating the private benefit to the law of charitable trusts. 


March 17, 2008 in State – Judicial | Permalink | Comments (0) | TrackBack (0)

"For What? Is Philanthropy Abandoning the Needy?" contains a very provocative essay entitled "For What?  Is Philanthropy Abandoning the Needy?" The very well written essay, authored by Dr. Susan Raymond, provides an opportunity to step back and consider the forest as we tend to the individual trees.  Its well worth reading.  Here is a brief excerpt:

For what?  The question, my friends, is being asked.  Unfortunately, it is not being asked by us.  I say unfortunately because there is no such thing as a good surprise.  It is always better to anticipate criticism, understand its roots, and prepare for its consequences, than to have the momentum of questions build from the outside, momentum that grows from a murmur to a sotto voce aside to a comment to a news article to an op ed piece to a Congressional hearing. It is always better to ask first, rather than answer last.  Rather than by us, the question “For What?” is being asked by observers and pundits who see the ever upward tracking line of philanthropy, the headlines about billion dollar campaigns, the 200% increase in the number of nonprofits and ask, for what?  For what, when the same problems seem to plague the social commons?  For what, when the homeless still are without shelter?  For what, when the chasm between the ultra-wealthy and the extremely poor continues to widen?  For what, when the bottom billion in the world face no more hope today than they did yesterday?  For what, when the money flows but results on the societal commons do not?  For what, when the dollars to help flow so generously, but nothing ever seems to get fixed? 

The question is being asked in a fundamental form.  Is philanthropy, and the nonprofit sector it supports, abandoning the needy?  Do not smile sadly and shake your head about the ignorance of some pundits.  Do not believe that question reflects the naiveté of those who simply do not know what we do.  This is not the source of the questioning. Those asking  the questions are not the hairdressers of Hopkinsville or the good old boys of the Koffee Klatch Kafe.  The questions are not being asked out of ignorance.  They are being asked out of observation.

No less than Robert Reich has asked whether institutions with $40 billion endowments and consistently black balance sheets are actually charities.  No less than Google has supported research that implies that much of philanthropy is not about the societal commons at all, but rather about feeding the egos of the already empowered.  No less than the United States Congress has cast a skeptical eye at the endowment coffers of institutions philanthropies and nonprofits -- that already sit on billions of dollars that produce earnings of 10% to 15%, but pay out funds for programs that actually help anyone at only 4%.  No less than the editorial staff of the New York Times has upbraided the sector for its turning from the poor. 


March 17, 2008 in Paper Presentations and Seminars | Permalink | Comments (0) | TrackBack (3)

University of Miami's Frances Hill Comments on Improper Use of Charity By California Legislature

University of Miami Law School's Professor Frances Hill is quoted in the March 16, 2008 Los Angeles Times about the propriety of the California State Legislature's alleged improper benefits to charity donors.  According to the story, "The California Senate offers special interests that give money to its charity the opportunity to travel with state lawmakers to Rio de Janeiro, Buenos Aires, Jerusalem, Tokyo and other foreign locales."  The story explains how the Senate uses its staff to assist in travel arrangements and that the donors are mostly corporate interests with business  before the Legislature.  After quoting a government ethics expert who says that this arrangement is "inappropriate," the article then quotes Professor Hill as one of several experts on nonprofit law as saying:

Frances R. Hill, a University of Miami law professor and expert on nonprofits, said the federal tax code forbids tax-exempt charities from bestowing "excess" benefits exclusively on board members. Such organizations are also bound by the "private inurement" doctrine that aims to ensure that a nonprofit's benefits are public, not private.

Hill said the structure of the Senate's international relations foundation essentially allows board members -- who get their position by donating -- to purchase access to California legislators on foreign trips. Average Californians and officials in industries that have not donated to the foundation have not been granted such access, Hill noted.

"You just can't sell a board membership like this," she said.

For the entire story, see "Senate travel perks for sale? Contributors to lawmakers' charity, including lobbyists, are invited to go overseas with legislators" in the March 16, 2008, Los Angeles Times.


March 17, 2008 in In the News, State – Legislative | Permalink | Comments (0) | TrackBack (0)

Sunday, March 16, 2008

IRS Seeks Nonprofits Help With Publicizing Availability of Economic Stimulus Payments to Low-Income Taxpayers

On March 12, 2008, the IRS announced that it is enlisting the help of charities and other non-profits to spread the word about the availability of economic stimulus payments to low-income taxpayers, especially those who do not ordinarily file federal income tax returns.  Here is the language from the IRS website:

The IRS is encouraging various partners and stakeholders such as charities, churches and governmental organizations to assist in efforts to reach out to those Americans who may be eligible for the 2008 economic stimulus payment but who normally have no requirement to file a tax return. People who receive certain Social Security, Veterans Affairs, Railroad Retirement or wages from earned income or combat pay may be eligible and not know it.

The IRS has created a special Web page for interested organizations: Economic Stimulus Payments: Marketing Products for Partners. This page contains one-page flyers that you can copy, the Package 1040A-3 (a 10-page booklet that contains everything certain people need to file a return today), Radio PSAs, Logos, etc. This page is part of the Economic Stimulus Payments Information Center on, which provides information on eligibility and other requirements. The IRS appreciates any assistance you can provide.


March 16, 2008 in Federal – Executive | Permalink | Comments (0) | TrackBack (0)