Monday, April 21, 2008
The Chronicle of Philanthropy reported on April 17 that The Woods Fund of Chicago, the private foundation on whose board Senator Barack Obama served with Professor William C. Ayers (a professor at the University of Illinois at Chicago and who was a member of the Weather Underground, an anti-Vietnam war group that set bombs to protest the war), reports that it is under siege by journalists. The journalists are digging into the relationship of Senator Obama and Professor Ayres whose service overlapped on the foundation's board of directors from 1998 to 2001. This increased interest comes on the hills of the Democratic Presidential debate on Wednesday, April 16th, in Philadelphia, Pennsylvania. The private foundation's mission is to alleviate poverty. A staff member states in the story that the onslaught comes at a difficult time for the foundation because its president is ill and cannot return the flood of phone calls. Below is an excerpt of the story:
The Woods Fund of Chicago has been thrust into the middle of the latest controversy in the heated Democratic primary battle between Sen. Barack Obama and Sen. Hillary Clinton.
As a result, the staff at the private foundation is now attempting to handle a swarm of attention from journalists, which is centered on a longtime Woods Fund board member and his relationship with Mr. Obama, who had been a member of the Fund’s board from 1998 to 2001.
The controversy stems from an exchange during Wednesday’s nationally televised debate in Philadelphia, where Mr. Obama was questioned about his relationship with William C. Ayers, a Woods Fund board member who had been part of the Vietnam-era Weather Underground.
The Weather Underground used terroristic methods, such as setting bombs, to protest the war. Mr. Ayers had later written that he did not regret setting the bombs.
During Wednesday’s debate, Mr. Obama was questioned about his ties to Mr. Ayers through the Woods Fund — a private foundation with more than $58-million in assets that works to alleviate poverty.
. . .
George Stephanopoulos, one of the ABC News moderators of the debate, asked Mr. Obama about his relationship with Mr. Ayers.
“An early organizing meeting for your state senate campaign was held at his house, and your campaign has said you are friendly,” Mr. Stephanopoulos said. “Can you explain that relationship for the voters, and explain to Democrats why it won’t be a problem?”
Ms. Clinton then brought up the fact that both men had been members of the Woods Fund board — a connection Mr. Obama said is not relevant to his White House aspirations.
“President Clinton pardoned or commuted the sentences of two members of the Weather Underground, which I think is a slightly more significant act than me serving on a board with somebody for actions that he did 40 years ago,” Mr. Obama said.
The exchange prompted a flood of calls today to the Woods Fund’s office, said a spokeswoman, who explained that the calls were coming at a particularly bad time for the organization.
See the Article for the Full Story.
The Weather Underground group is the subject of a documentary made by the Free History Project, and produced in association with KQED Public Television/San Francisco and ITVS. The Free History Project evolved into a 501(c)(3) nonprofit organization in 2001 as a result of its work on The Weather Underground documentary. According to the organization's website, its mission is to advance knowledge of media, history and humanities based-subjects, through independent documentary film and education. The Documentary is currently a PBS Club Program Favorite. See link for more information - PBS.
The Chronicle of Philanthropy Reports on Presidential Hopefuls Senators John McCain and Barack Obama's History of Charitiable Giving
Today, the Chronicle of Philanthropy reported in separate, but similarly-themed articles, on the charitable giving of Presidential Hopefuls Senators John McCain and Barack Obama. The Chronicle reported that Senator McCain disclosed on his recently released tax returns that he gave about 26 percent of his gross income to charity in 2007, up from 18 percent in 2006. The article also reports that both the Senator and his wife gave most of their charitable giving to their own private foundation, which in turn made donations to various other charities. Below is an excerpt of the John McCain story:
Sen. John McCain, the Republican presidential candidate, has released his tax returns for the past two years, including details about the money he donated to charitable causes.
In 2007, the Arizona senator reported $405,409 in total income and contributed $105,467, or 26 percent of his total income, to charity.
In 2006, Mr. McCain said he had $358,414 in total income and donated $64,695, or 18 percent of his total income, to charity.
The tax returns were filed solely by Mr. McCain. His wife, Cindy McCain, an heir to a beer distribution company in Phoenix who has reported wealth of $100-million, files a separate return each year and does not plan to release her tax returns.
A statement from Mr. McCain’s campaign said that most of the senator’s charitable contributions were made to the John and Cindy McCain Family Foundation, which makes direct contributions to charities.
The senator and Mrs. McCain each make gifts to their foundation, which is focused on helping organizations that work “for the spiritual, educational, and medical needs of the community.
The Chronicle also reported on Presidential Candidate Senator Barack Obama's history, too. It reported that both Senator Barack Obama and his wife give about 6 percent of their income to charity in 2007. The Senator and his wife gave about the same amount in 2006. In 2007, Senator Obama and his wife, who file a joint return, unlike Senator McCain and his wife (who declines to disclose her personal tax returns), reported about 4 million in income compared to the heiress amounts that Mrs. McCain is reportedly worth. Below is an excerpt from the story about Senator Obama:
Barack Obama, the Democratic presidential candidate, and his wife, Michelle Obama, have released their tax return for last year showing that they donated 5.7 percent of their income to charitable causes.
The tax return shows that the Illinois senator and Mrs. Obama, who reported $4.2-million in income, gave $240,370 to 33 churches and charities in 2007.
Senator and Mrs. Obama made their largest gift, of $50,000, to the United Negro College Fund. They gave $35,000 to CARE, the international relief organization, and $26,270 to Trinity United Church of Christ (whose pastor, the Rev. Jeremiah A. Wright Jr. has made headlines for controversial sermons).
Twenty-two organizations received $5,000 gifts from the Obamas, including the Boys and Girls Club; the Central Illinois Food Bank; the Illinois Coalition Against Sexual Assault; the National Coalition for Homeless Veterans; the Ovarian Cancer National Alliance; and the United Way for the Greater New Orleans Area.
Last month, Mr. and Mrs. Obama released general information about their giving in 2007 and their tax returns dating back to 2000 that showed their charitable contributions had increased over the past three years, when the senator and his wife were making more money and he was beginning to run for president.
In 2006, the Obamas gave $60,307 to charitable organizations, or about 6 percent of their $991,296 in total income that year.
See Obama Article for the Full Story.
A few weeks ago, I was on a rant regarding my disbelief in true "altruism" as a motivator for charitable giving. A few readers legitimately took me to task for suggesting that conservatives give more than liberals because they have more to feel guilty about or that giving is ultimately a self-serving act, regardless of one's political leanings. One reader stereotypically assume me to be a liberal merely because I dared take a jab a conservatives (as if conservative never criticize each other). But if you want to see a real rant, check out The Cactus Tax Proposal, Part 2: Eliminate the Tax Deductions for Charity. Here is a snippett:
Additionally . . . acts of charity are not truly acts of charity. If I donate money to an organization, and in exchange, they slap my name on the side of a building, and have a dinner in my honor, is it really charity? Or is such behavior merely seeking adulation, and an opportunity to attend yet another event on the social season schedule?
I still think true altruism has nothing to do with charitable donations -- at least not when the giver claims a deduction at the end of the year -- but I would not eliminate the deduction. The "Angry Bear" (the author of the linked opinion) and others view the world through economic lenses and so the argument goes thusly: (1) there is no real altruism, (2) altruistic acts are therefore undersupplied by the market, (3) altruistic acts generate public goods, (4) it makes sense, therefore to subsidize -- though not necessarily via the tax code -- altruism that is insufficiently found in the market place that so many law and economic types dictate our daily behavior. That is, the argument that there is no altruism ultimately proves the need for government subsidy and a deduction is one such subsidy. The argument against the existence of true altruism does not prove that the charitable contribution deduction should be eliminated.
Sunday, April 20, 2008
IRS Continues Program on Political Campaign Activity by Charities; Stresses Education and Enforcement
On April 17, 2008, the IRS issued a news release announcing the continuation of its Political Activities Compliance Initiative for the 2008 Campaign Season. The Initiative involves both education and compliance. The IRS seeks to educate 501(c)(3) organizations (i.e., charities and churches) about the federal statutory ban on political activity.
The News Release is reprinted below, including appropriate links for more information:
The Internal Revenue Service's Political Activities Compliance Initiative (PACI) will remain in effect for the 2008 election season. PACI seeks to educate section 501(c)(3) organizations such as charities and churches about the federal ban on political activity.
Letters to the national political party committees explaining the law's ban on political campaign activity by charities and churches.
A letter in the Federal Election Commission's monthly newsletter asking candidates to ensure that their contacts with charitable organizations do not inadvertently jeopardize the tax-exempt status of any organization.
A news release reminding charities and churches of the ban.
Reorganizing the IRS' Web site materials concerning the ban to make them more accessible to organizations, political candidates and parties, and the general public.
Examinations of organizations the IRS believes may be violating the ban.
Updated: April 18, 2008
This guidance is particularly important in the 2008 Election Season in light of recent attention given to church leaders and their comments, and the increasing activity of nonprofit organizations that takes on an extra political hue during this campaign season and the heightened scrutiny by all.
Department of Treasury and IRS Issue Notice Seeking Recommendations for the 2008-2009 Guidance Priority List
The Department of Treasury and Internal Revenue Service through Notice 2008-47 invite public comment on recommendations for items that should be included on the 2008-2009 Guidance Priority List. Below is an excerpt of the notice. The full notice can be viewed by clicking here, Notice 2008-47.
The Treasury Department's Office of Tax Policy and the Service use the Guidance Priority List each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The 2008-2009 Guidance Priority List will establish the guidance that the Treasury Department and the Service intend to issue from July 1, 2008, through June 30, 2009. The Treasury Department and the Service recognize the importance of public input to formulate a Guidance Priority List that focuses resources on guidance items that are most important to taxpayers and tax administration.
Published guidance plays an important role in increasing voluntary compliance by helping to clarify ambiguous areas of the tax law.
. . .
In reviewing recommendations and selecting projects for inclusion on the 2008-2009 Guidance Priority List, the Treasury Department and the Service will consider the following:
1. Whether the recommended guidance resolves significant issues relevant to many taxpayers;
2. Whether the guidance may be appropriate for enhanced public involvement through the process described in Notice 2007-17, 2007-12 I.R.B. 748;
3. Whether the recommended guidance promotes sound tax administration;
4. Whether the recommended guidance can be drafted in a manner that will enable taxpayers to easily understand and apply the guidance;
5. Whether the Service can administer the recommended guidance on a uniform basis; and
6. Whether the recommended guidance reduces controversy and lessens the burden on taxpayers or the Service.
Taxpayers may submit recommendations for guidance at any time during the year.
Please submit recommendations by May 31, 2008, for possible inclusion on the original2008-2009 Guidance Priority List. The Treasury Department and the Service plan to update the 2008-2009 Guidance Priority List periodically to reflect additional guidance that the Treasury Department and the Service intend to publish during the plan year.
The periodic updates allow the Treasury Department and the Service to respond to the need for additional guidance that may arise during the plan year. Recommendations for guidance received after May 31, 2008, will be reviewed for inclusion in the next periodic update.