July 10, 2009
Does The Valley Club Incident Raise The Bob Jones Issue?
I could not find the Valley Swim Club listed in IRS Publication 78 nor on Guidestar so it may not be federally tax exempt. Still, yesterday's local and national media reports were disturbing on both a personal and professional level. According to one local report in the Philadelphia Inquirer, "The club includes more than 10 acres of land and a 110,000-gallon pool, according to its Web site, and is a private nonprofit organization chartered in 1954. A single membership is $395 per year." The club's website has a "dot com" (rather than "dot org") suffix and is apparently no longer operational, except for a bold face (literally) denial of the allegations made in local and national media. It seems that a summer day camp populated by 65 mostly African American and a few Hispanic kids paid a nearly $2000 fee to use the club's swimming pool. When regular club members -- or more accurately -- parents of white kid members saw a pool full of black and brown kids, some parents expressed concern that "these dangerous black kids might hurt our kids." According to the Inquirer, one kid remarked:
"I heard this lady, she was like, 'Uh, what are all these black kids doing here?' She's like, 'I'm scared they might do something to my child,'" said camper Dymire Baylor. The Creative Steps Day Camp paid more than $1900 to The Valley Swim Club. The Valley Swim Club is a private club that advertises open membership. But the campers' first visit to the pool suggested otherwise. "When the minority children got in the pool all of the Caucasian children immediately exited the pool," Horace Gibson parent of a day camp child, wrote in an email. "The pool attendants came and told the black children that they did not allow minorities in the club and needed the children to leave immediately." The next day the club told the camp director that the camp's membership was being suspended and their money would be refunded.
In a remarkably stupid demonstration of Freudian slips, the President of the Club explained, "There was concern that a lot of kids would change the complexion … and the atmosphere of the club," Ironically, as noted above, the Club was "chartered in 1954, the same year the Supreme Court decided . . . well, you know this already. There is a Black man swimming in the White House pool for Christ's sake! By the way, that's the new millenia's answer to "we can put a man on the moon, for Christ's sake!. It is a way of asking with exasperation, "why can't we fix this already!" Even if he was expressing a widely held sentiment amongst club members, the board seems to have rightly taken the President's ass to the woodshed for sharing it so openly (see the club's website via the link above). One supposes the larger question is, does the meaning of charity differ from state to state. Is there a state's right component to "charity." On the federal level we don't know precisely what charity means but we know for sure it does not include racial discrimination. Should the club lose its presumed state property tax exemption for its apparently discriminatory policies. I should mention, by the way, that the regular club members say "its not about race, its about space." Another Freudian slip. The civil rights movement was always about "space." "Space" to live one's life as a dignified human being, Idiot!
A club member told a newspaper that she understood the problem was the size of the group, not race. But Wright rejected that explanation, saying the club covers 10 acres with a "nice-sized" pool and a separate pool for younger children. The board, she said, knew that her group included 65 children, and none of them had misbehaved.
So let me see if I got this right: Had the pool had been overcrowded by 65 fee paying white kids none of this would have happened. Management would have just picked 65 fee paying white kids at random, given them a refund and told them to get out, right? Spare me. My complexion may be dense in one sense of the word but I ain't stupid. Miles to go before we sleep.
July 9, 2009
Where Have All the Reporters Gone?
The Chronicle of Philanthropy reports that "[s]everal [displaced] journalists . . . started a nonprofit organization to pursue investigative reporting in the western United States and Canada, reports the Seattle Post-Intelligencer."
"InvestigateWest made its debut on Wednesday with a small grant from the Fund for Investigative Journalism and what its executive director, Rita Hubbard, called “sweat equity” from former staff members of the Post-Intelligencer,who are working with no pay. The Seattle newspaper shed most of its employees after switching to an online-only format this year. "
This is similar to a developing trend nationally. As major newspapers re-envision the future in the wake of lost revenues -- advertisements and subscriptions, many seasoned reporters are finding themselves without a day job. Several of started nonprofit reporting online sites to fill the void.
For the full article, please click here.
Charity sues Sun Trust Bank Over Alleged Risky Investment
The Atlanta-Journal Constitution newspaper reports that "[a] nonprofit organization[, The Hudgens Foundation,] founded by the late . . . developer Scott Hudgens is suing SunTrust Bank, claiming the Atlanta bank failed to properly disclose the risks when it invested $8 million of the charity’s money in a complex type of security." According to the newspaper, "[t]he investment, which took place in 2005, involved auction-rate securities, a kind of debt long billed by the financial industry as a safe place to park money while earning interest — cash with benefits, so to speak."
The market for the securities dried up in the financial crisis, and the nonprofit is left holding the $8 million in non-interest bearing account that doesn't mature for 35 years. The article further reports that in 2007 the nonprofit listed about $27 million in assets. As a consequence, the non-liquid $8 million is a sizable portion of the assets of the nonprofit. Below is a further excerpt of the story:
The foundation “didn’t want to just keep that much money sitting around in a savings account,” Jones said. “They wanted to have a higher return, but also wanted to have liquidity, to be able to get to it whenever they needed it.”
The $8 million is no small chunk of change for the charity. The foundation reported $29 million in assets in 2007, the most recent year that data was available.
According to the foundation’s lawsuit, SunTrust said the securities were a “safe conservative investment and a cash equivalent that would produce a better return than money markets with minimal risk and no loss of liquidity.”
The lawsuit also claims SunTrust didn’t disclose to the foundation the growing risk of auction-rate securities until the market for them had failed.
SunTrust said it did nothing wrong.
“We handled this account appropriately and will vigorously defend against any action brought by the Hudgens Foundation,” said Hugh Suhr, a SunTrust spokesman.
For the full story, please click here.
Michael Jackson's Philanthropic Legacy
On July 8, 2009, as many continued the mourning and reflections on the life of Michael Jackson, the Los Angeles Times reported on a lesser known but most important part of his legacy -- his philanthropy. Below is an excerpt from the article:
Before the financial woes that haunted him in recent years, Jackson was one of the industry's most formidable philanthropists. For example:
* He donated proceeds from the 1988 song "Man in the Mirror" to Camp Ronald McDonald for Good Times, a camp for children who suffer from cancer.
* He equipped a 19-bed-unit at Mount Sinai New York Medical Center for cancer research and donated part of the earnings from his Victory Tour to the United Negro College Fund.
* He donated all the money he received from his Pepsi endorsements -- $1.5 million -- to the Michael Jackson Burn Center for Children at Brotman Medical Center in Culver City. Jackson had been treated there when he was burned during the production of a Pepsi commercial.
* Before a concert at Wembley Stadium in 1988, Michael met with Prince Charles and Princess Diana, handing over checks totaling more than $400,000 for the Prince's Trust and a children's hospital.
* He founded the Heal the World Foundation to fight illness and poverty among children around the world.
* He boldly joined Ryan White -- a boy who was infected with HIV by contaminated blood transfusions, in his fight against the discrimination of those with AIDS -- at a time of great fear and dread over the AIDS epidemic. In 1993, Jackson was one of the stars to perform at Bill Clinton's presidential inauguration. Before he sang "Gone Too Soon," he talked about the plight of those with AIDS and mentioned Ryan, who died of the disease in 1990.
Seven years later, the Guinness Book of World Records cited Jackson for holding the world record for the "Most Charities Supported by a Pop Star." It's unclear how much Jackson had donated over the years, but some estimates put the number at more than $500 million.
Just perhaps, this is his greatest legacy and contribution to humankind -- his charity. For the full story, please click here.
Pro-Life Group Cries "Foul" With Respect to IRS Treatment of its Application for Tax Exemption
The Thomas More Society, a pro-life nonprofit organization, is claiming that the IRS is imposing unlawful conditions on its request for tax exempt status:
After inquiring about the “educational” nature of the Coalition for Life of Iowa’s activities, the IRS stated that it would not grant a tax exemption unless the Coalition agreed to limit its “picketing” and “protesting” of a local Planned Parenthood. Compliance with this request would result in a restriction of the speech of the Coalition for Life, as well as a breach of its First Amendment rights. While other non-profits have had no trouble attaining tax-exempt status from the IRS, this unwarranted ultimatum reveals prejudice toward a Pro-Life organization and, by extension, the Pro-Life movement. Such demands should never arise in the IRS’s decision-making process to grant tax-exempt status for any applicant non-profit organization.
According to the organization's press release, the IRS demanded that Thomas More not engage in any issue advocacy:
"The IRS not only erroneously forbade the Coalition for Life of Iowa from engaging in 'advocacy' as a section 501(c)(3) non-profit organization; they also never gave any explanation as to why their request was relevant," said Thomas Brejcha, president and chief counsel for the Thomas More Society. "The Coalition has clearly and truthfully stated that all its activities fall in line with IRS guidelines. The IRS is protecting Parenthood and harassing the Coalition for Life of Iowa."
Advocacy, as opposed to campaign intervention of course, is not categorically off limits to 501(c)(3) organizations. Its just that they cannot be so engaged in advocacy as to make advocacy its primary purpose, and even that is a questionable proposition IMHO. Although the official correspondence between the IRS and Thomas More do not suport the accusation that the IRS seeks to categorically forbid advocacy (though the IRS request for information asks about efforts to influence legislation), this letter from organization's attorney claims that an IRS examiner requested that Thomas More's directors each "sign a statement that the Coalition will not "picket" or "protest" outside of Planned Parenthood or similar organizations and will not "organize" others to do so.
The IRS needs to respond to that letter, in my opinion, else that unanswered accusation will become part of a record which will eventually result in a beat down for the Service. Give them their determination letter already!
Correction to States' Adoption of UPMIFA Post
Thanks to Prof Harvey Dale for correcting my previous assertion that only Florida, Louisiana, and Pennsylvania have not enacted UPMIFA. As Dale wryly notes:
New York has not adopted UPMIFA despite some energetic efforts to get it passed. The paralysis and dysfunction in Albany stalled those efforts and it seems very unlikely that UPMIFA will be enacted this session. The coalition supporting its enactment, however, will return to the fray when the situation seems more salubrious.
The mistake arose from my misreading of this helpful map on the Uniform Law Commission's website. The states shown in pink and blue have introduced UPMIFA. All the states shown in blue have enacted UPMIFA but not all the states shown in pink (where UPMIFA has been introduced) have actually enacted UPMIFA. Florida, Louisiana, and Pennsylvania are the only three states where UPMIFA has not even been introduced, but there are others that have not adopted UPMIFA. Thanks Harvey.
Sotomayor's Service on Nonprofit Board Becomes Confirmation Issue
The Center for American Progress is taking issue with a Republican talking point to the effect that Judge Sonia Sotomayor is unfit to sit on the Supreme Court because of her affiliation with the nonprofit organization, Puerto Rican Legal Defense and Education Fund (PRLDEF):
Myth #5: Sotomayor sat on the board of an “extreme” organization.
Fact: Sotomayor sat on the board of a “highly regarded nonprofit organization” that is under attack by a right-wing senator with a history of unfounded allegations against civil rights organizations.
Perhaps the most bizarre attack on Judge Sotomayor is the claim—spearheaded by Senator Jeff Sessions (R-AL)—that her service on the board of the Puerto Rican Legal Defense and Education Fund, or PRLDEF, makes her unsuitable for the bench because PRLDEF “took extreme positions.”10 Sessions’ baseless attacks on PRLDEF sparked a stern rebuke by New York Mayor Michael Bloomberg, who said that “[o]nly in Washington could someone’s many years of volunteer service to a highly regarded nonprofit organization that has done so much good for so many be twisted into a negative.”
Indeed, the only person whose judgment is called into question by Sessions’ attack is Jeff Sessions. In 1986, Sessions’ nomination to the federal bench was rejected by the Senate, in part because of Sessions’ claims that the NAACP is a “Communist-inspired” and “un-American” organization.” Twenty-three years later, civil rights organizations such as the NAACP and PRLDEF are still well within the mainstream of American society, but Jefferson Beauregard Sessions III has not changed one bit.
I don't think anything else need be said, but I can't help it. Nonprofit organizations are at their best, I think, when they act in contrarian ways. As my tax exempt prof, Steve Willis, opined in class one day, the reason why nonprofits exist is because we want to encourage grass roots movements that have not the political support to obtain direct funding from government nor the market support to garner consumer support and yet may express legitimate valuable ideas (i.e., slavery is wrong, women should be allowed to vote, etc).
U.S. Muslim Groups Seek Easier Charitable Contribution Rules
A coalition of U.S. Muslim groups have asked President Obama to revise charitable giving rules that have generated a chilling affect amongst the Muslim community with regard to charitable giving, according to an online report by The Public Record:
.While President Barack Obama conceded in his speech in Cairo last month that U.S. rules on charitable giving “have made it harder for Muslims to fulfill their religious obligation,” civil rights advocates are pressing the president to turn his words into action. The Muslim Public Affairs Council has joined other nonprofit organizations in urging Obama to follow up on his commitment to work with Muslim Americans to revise charitable giving rules. In a letter to the president, the organizations said, “We are seeking a meeting with you and the appropriate representatives of your administration to provide background information on how current national security rules create problems for all U.S. charities and to provide recommendations for change.”
The Letter, a copy of which I have not yet obtained, refers to conclusions made in a troubling 166 page ACLU report entitled, "Blocking Faith, Freezing Charity: Chilling Muslim Charitable Giving in the War on Terrorism Financing". (June 2009). We previously reported on this matter here. The President acknowledged in his June 4, 2009 Cairo speech that efforts to cut off funds to terrorist organizations have had the unintended collateral effect of making it harder and indeed dangerous to give to an Islamic charity or any group that seeks humanitarian goals for people of the Islamic faith. Video of the speech is available here. Obama stated the following with regard to charitable giving by Muslims:
Freedom of religion is central to the ability of peoples to live together. We must always examine the ways in which we protect it. For instance, in the United States, rules on charitable giving have made it harder for Muslims to fulfill their religious obligation. That's why I'm committed to working with American Muslims to ensure that they can fulfill zakat.
July 8, 2009
Private Benefit Issue Wells Up in Cincinnati Golf Courses
An interesting story in the July 4th issue of the Cincinnati Enquirer raises the hard to define private benefit issue. Seems the owner of a private golf in Cincinnati is challenging the state property tax exemptions of city owned golf courses. His challenge, according to the article, is based on the argument that the city has hired a private management firm to operate the city owned golf courses, which private firm havsmade over $2 million per year in food, beverage and pro shop fees. All city golf courses are apparently operated by private management firms, though not all by the same management firm:
Macke claims that public properties making money for private operators should not be exempt from paying property taxes. Hamilton County Auditor Dusty Rhodes has asked the Ohio Tax Commission to sort it out. IIt's about the government being in a business that is being served by private enterprise," Macke said. "If they are paying the same thing as me, I don't have a problem with it."
Management contracts wherein private for-profit companies essentially gain so much operational control -- and reap so much revenue over and from an exempt entity raises interesting issues regarding the appropriateness of tax exemption. This particular controversy is actually a variation of the United Cancer Council issue, in which the government expressed concern that a private for profit entity "captured" a charity to such an extent that the charity actually became the money making tool of the for profit entity. On the other hand, charitable organizations ought to operate as efficiently as possible and if doing so requires paying market rates to the most efficient vendors and suppliers, there should be no objection. The problem, one that has never been resolved, is how to draw the line between operating for the public benefit without unduly conferring wealth on select private individuals.
This is a good case study article for use in a discussion of joint ventures, UBIT and even the definition of "charity."
July 7, 2009
United Cancer Council 10 Years Later
The Nonprofit Times ran an interesting story on the changes wrought (or not) since Judge Posner's story in United Cancer Council. As the story points out, the case jump started what had theretofore been unsuccessful attempts to enact "intermediate sanctions" -- IRC 4958. I recall studying the case in LLM school and it had still not be decided two or three year later. Infamously, when it was decided, Posner still didn't decide. He said "do it all over again." That case has to be one of the biggest waste of enforcement resources ever even if it did lead to one of the more sensible enactments in federal tax exempt law. Anyway, part of my reason for posting on the story is that the author quoted me. I did the interview a few weeks ago so I hardly recognize my own quotes. Still, I don't sound like a complete idiot so I thought I would cut and paste my own rant from the article:
Darryll Jones, a professor at the Stetson University College of Law in St. Petersburg, Fla., said there has been little effect on the "cottage industry of raising money using a nonprofit's name" since the UCC case, with some fundraisers still getting as much as 90 percent of the money raised. "The status quo is the same these days, just not on such a conspicuous level," he said. Perhaps fledgling nonprofits have no choice but to rely on professional fundraisers, Jones said, however it has resulted in some "erosion of the nonprofit halo" because of an "almost prostituting of a nonprofit's name."
Yeah, I think that is about right. Posner's opinion pretty much legitimized the use of professional fundraisers and IRC codified the first bite rule so it is nearly impossible to impose intermediate sanctions on a nonprofit that uses a PFR. The only option is to apply the mysterious private benefit doctrine.
July 6, 2009
Alaska Nonprofit in the News
While the resignation of Governor Sarah Palin has placed Alaska in the news spotlight most recently, The Daily News-Miner, a Fairbanks, Alaska, newspaper, reported yesterday, July 6, that, "Police are searching for an Anchorage man suspected of stealing more than $100,000 from the nonprofit Alaska Marine Conservation Council."
The paper further reported that former employee "committed the crimes against his former employer by using company credit cards, company accounts and false reimbursements."
As a result of the thefts, the nonprofit, The Alaska Marine Conservation Council, was "forced the nonprofit to put all paid employees on furlough, and several workers lost their jobs." I can only imagine that this theft was particularly hard to experience in already tough economic times.
For the full story, please click here.
Australian Plan to Boost Funding to Homeless Mired in the Bureaucracy
The Australian reports today that the government's plan to increase by $800 million funding for the nearly 105,000 homeless Australians has stalled. Last year, the paper reports that the prime minister (Kevin Rudd) declared that homelessness was a "national obscenity", saying "[w]e can do better; we must do better." See the story excerpt below:
About 105,000 Australians are homeless on any given night, with data expected out this week likely to show another rise in their numbers.
A landmark Council of Australian Governments meeting last November agreed to boost services for the homeless under a four-year deal that requires the states and territories to collectively match a $400m commonwealth contribution.
"The implementation plan for each state and territory to achieve the objectives of this agreement is to be agreed by no later than 31 March, 2009," the pact states.
The government's white paper on homelessness, released in December, pledged the plans "will be in place in the first half of 2009".
It also promised a new council on homelessness, to report to Mr Rudd on progress towards the targets captured in the partnership deal.
More than six months later, no appointments have been made to the council.
For the full story, please click here. In the wake of so many charities worldwide decrying the lack of sufficient financial support in these tough economic times, it is refreshing to know that some charities that are meeting critical needs will be helped, even if it is eventually.
California Charities Facing Economic Pinch
The Chronicle of Philanthropy reports that "California charities that depend on state money to survive are facing a mixture of confusion and fear after Gov. Arnold Schwarzenegger declared a fiscal emergency and the state said it would start paying many of its bills with IOU’s.
While charities are used to California’s regular budget impasses, the magnitude of the state’s deficit — more than $26-billion — and the drawn-out battle between Democrats and Republicans on how to plug it have created an especially tense environment."
The Chronicle interviewed nonprofit insiders for the article, including Cynthia Carmona, a policy specialist at a community clinic association based in Los Angeles. Ms. Carmona said, “Everyone has resigned themselves to that fact,” . . . and “[t]his year is the worst we’ve ever seen it.”
For the full story, please click here.
July 2009 Issue of International Journal of Civil Society Law Newsletter
The International Center for Civil Society Law has just published its July 2009 Newsletter. It is available on-line at http://www.iccsl.org/pubs/09-07_IJCSL-N.pdf Here is a listing of the topics addressed in the newsletter:
U.S.—ACLU REPORT DETAILS UNDERMINING OF MUSLIM CHARITIES SINCE SEPTEMBER 11 ATTACKS
CITIZEN PARTICIPATION AND FREEDOM OF INFORMATION
CANADA--DEMOCRATIC RACE GOOD FOR VANCOUVER AND MONTREAL
BERMUDA—GOVERNMENT OFFICIALS REVIEW CAYMAN ISLANDS’ FREEDOM OF INFORMATION LEGISLATION
CAYMAN ISLANDS-- INFORMATION COMMISSIONER WARNS OF DELAYS
ENGLAND—CREWE CITIZENS GET TO VOTE ON NEIGHBORHOOD PLANS
EUROPE—TREATY ON ACCESS TO OFFICIAL DOCUMENTS SIGNED
• STATE DEPARTMENT TRIES INTERNET DIPLOMACY
• LIEBERMAN, GRAHAM THREATEN SCORCHED EARTH ON TORTURE PICS
ENGLAND AND WALES—
• CIF REGULATION BY FSA ‘MAY LEAD TO FEE HIKE’
• WIKIMEDIA UK HAS BEEN DENIED CHARITY S
FREEDOM OF ASSOCIATION AND PEACEFUL ASSEMBLY
INDIA—MADRAS HIGH COURT RULES IN FAVOR OF EMPLOYEES IN LABOR DISPUTES WITH NGOS
SOMALILAND—GOVERNMENT SUSPENDS SOME NGOS
FREEDOM OF EXPRESSION
• GREEN DAM PORNO PROJECT EVOKES FEARS OF INTERNET CENSORSHIP; JULY 1 DEADLINE DROPPED ON JUNE 30
• GOVERNMENT TIGHTENED INTERNET ACCESS AROUND TIANANMEN ANNIVERSARY
• INTELLECTUALS CALL FOR RELEASE OF DISSIDENT
ENGLAND--HOME SECRETARY JACQUI SMITH TO FIGHT SHOCK-JOCK MICHAEL SAVAGE’S LAWSUIT
INDONESIA—RADIO NEWS AGENCY BECOMES VOICE FOR TOLERANCE
KAZAKHSTAN—GOVERNMENT TO TIGHTEN INTERNET LAW
SRI LANKA--GOVERNMENT ARRESTS FAMED ASTROLOGER OVER PREDICTIONS OF PRESIDENT’S FAILURE
UGANDA—CONSTITUTIONAL COURT UPHOLDS CRIMINAL LIBEL CASE
• LOCAL GROUPS TO HOST BRITISH MP WHO JUSTIFIES TERROR
• TALK SHOW HOSTS MAY BE ACCOMPLICES UNDER HATE BILL
FREEDOM OF RELIGION AND BELIEF
AZERBAIJAN—RELIGION LAW CHANGES TARGET MUSLIMS
FRANCE—SARKOZY ANNOUNCES AIM TO OUTLAW BURQA
IRAN—BAHAIS ONCE AGAIN SUFFERING DISCRIMINATION AND HARASSMENT
IRAQ—ANCIENT RELIGION IN DANGER
MALDIVES—RELIGIOUS FREEDOM FOUND LACKING FOR MIGRANT WORKERS
TONGA--CHINESE REGIME PRESSURES TONGAN OFFICIALS TO CURB FREEDOM
CANADA—NEW NOT-FOR-PROFIT CORPORATIONS ACT P
NORTHERN IRELAND-- CHARITY COMMISSION GETS DOWN TO WORK
RUSSIA—DUMA PASSES LESS RESTRICTIVE NGO LAW
UNITED STATES—TEXAS ADOPTS LAW TO PROTECT DONOR INTENT WITH REGARD TO ORPHAN TRUSTS
ZIMBABWE—CIVIL SOCIETY ORGANIZATIONS REJECT PROPOSAL TO MAKE TRUSTS REGISTER UNDER PVO ACT
CANADA—NEW GUIDANCE ON FUNDRAISING ISSUED BY CRA
LAO PDR—DECREE LAW NOW AVAILABLE ON ICCSL WEBSITE
Kenneth Anderson Posts Paper on NGO Accountability
Kenneth Anderson has recently posted his book review, What NGO Accountability Means -- And Does Not Mean, 103 American Journal of International Law 170 (2009). Here is the abstract:
International and transnational NGOs have been under criticism for alleged lack of accountability since they emerged into prominence in the 1990s. In recent years, the debate over NGOs has shifted from legitimacy and "representativeness" to accountability in the narrower senses of internal governance, fiduciary responsibility, relationships with national governmental authorities, and similar issues. The volume under review seeks to cover both aspects of the debate, with emphasis on the latter, narrower issues. The review essay argues that the debate over representativeness and legitimacy - accountability in the large sense - cannot be left aside, but continues to be present, if only because the incentives that led NGOs to claim to represent the 'peoples of the world' in the first place have not gone away but have instead merely been submerged under critical pressure. The review essay argues that the question of NGO accountability as a matter of claims to governance remain salient, because global civil society still seeks a role in global governance in a way that relies upon claims of representativeness and that is not satisfied by narrower mechanisms by which NGOs make themselves accountable for other, narrower purposes, such as internal corporate governance or fiduciary accountability for charitable assets.
Charities Use Social Media More than Any Other Sector, New Study Shows
A new study by researchers at UMass Dartmouth concludes that non-academic charities are way ahead of business and educational institutions in their use of social media (blogging, podcasts, message boards, etc). Tax law, especially, is way behind technology. As a matter of fact, I don't even think there are laws or regulations yet on the UBIT consequences of charities' inclusion of a commercial link on their webpages. Charitable use of social media is bound to generate audience and audience translates into revenue and charitable revenue makes everyone nervous, it seems. I wonder what other legal issues will arise as charities start using Twitter and the next new gadget to keep their stakeholders loyal and informed. Here is an excerpt from the executive summary:
This new research shows that charitable organizations are still outpacing the business world and academia in their use of social media. In the latest study (2008) a remarkable eighty-nine percent of charitable organizations are using some form of social media including blogs, podcasts, message boards, social networking, video blogging and wikis. A majority (57%) of the organizations are blogging. Forty-five percent of those studied report social media is very important to their fundraising strategy. While these organizations are best known for their non-profit status and their fundraising campaigns, they demonstrate an acute, and still growing, awareness of the importance of Web 2.0 strategies in meeting their objectives.
Massachusetts Adopts UPMIFA in Response to Eceonomic Hard Times
According to a story in the Boston Globe, Massachusetts recently became the latest state to adopt the Uniform Prudent Management of Institutional Funds Act. The action leaves only Florida, Pennsylvania and Louisiana as the three states that have not adopted UPMIFA, according to the Uniform Law Commission's website. Although the Commission approved the act in 2006, well before the current economic downturn, the Massachusettes media is touting the enactment as a relief provision particularly because of provisions in the act that allow nonprofits easier access to restricted funds:
“In these difficult economic times this law will be a helpful tool for nonprofits across the Commonwealth,’’ said Kimberly Haberlin, a spokeswoman for Patrick.The measure updates decades-old endowment laws governing how organizations manage and use donations. Such funds usually have restrictions governing how they are spent, said Jennifer Ryan, legislative director for the Massachusetts Audubon Society. Her organization helped push the measure, which is officially known as the Uniform Prudent Management of Institutional Funds Act, but which many have been calling the “nonprofit sustainability act.’’ Those who work in the state’s nonprofit sector hope the updated law will aid organizations that might otherwise have had to drop programs or pare staff because of the recession.