Friday, November 6, 2009

Ford Foundation to Give $100 Million for Education

The Ford Foundation has pledged to make grants of $100 million available to improve public education. The new program will target seven cities — Chicago, Denver, Detroit, Los Angeles, Newark, New York, and Philadelphia, and will focus on four goals: raising the quality of teaching, exploring the idea of how lengthening the school day and year can improve learning, using new ways to measure school and student performance, and examining why states often do not offer adequate financial resources to poor school districts. Luis A. Ubiñas, president of the foundation, said that the new grant-making effort will seek to “shake up the conversations surrounding school reform.” 


JDC

November 6, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Thursday, November 5, 2009

Another Source on Nonprofit Performance Metrics

Yesterday I blogged about a joint project between The Urban Institute and Social Solutions to launch a web portal with information to help nonprofits improve performance.  Today, Root Cause, a nonprofit advisory organization, announced a new book recommending that nonprofits adapt for-profit data-driven performance measures to help judge and improve nonprofits' impact.  According to this story in Reuters, the book (entitled Building a Performance Measurement System: Using Data to Accelerate Social Impact) looks at the performance measurement system commonly used by the private sector to increase profitability, and modifies it "for a simplified, step-by-step customized system to help nonprofits improve operations and increase social impact."

A free PDF of the book and more information is available for download from the Root Cause web site.

JDC

November 5, 2009 in Books | Permalink | Comments (0) | TrackBack (0)

IRS Seeks Applications for TE/GE Advisory Committee

From the IRS web site:


The Internal Revenue Service is seeking applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities (ACT). The committee provides a venue for public input into critical tax administration areas.

Vacancies exist in the following customer segments:

Employee Plans – two vacancies,
Exempt Organizations - two vacancies.
There are no vacancies in Tax Exempt Bonds, Indian Tribal Governments or Federal, State, and Local Governments.

The ACT is an organized public forum for the IRS and representatives who deal with employee plans, exempt organizations, tax-exempt bonds, and federal, state, local and Indian tribal governments. The ACT allows IRS to receive regular input on administrative policy and procedures of the Tax Exempt and Government Entities Division.

Applications will be accepted through December 1, 2009.

JDC

November 5, 2009 in Federal – Executive | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 4, 2009

Texas Tribune: Newest Nonprofit Newspaper

The Texas Tribune is the latest nonprofit news organization to launch (website is here). This article at PaidContent.org gives some of the details behind the effort:

The vision for a nonprofit covering Texas politics, public policy and government started with John Thornton, a general partner of Austin Ventures who wanted to to put money and energy into journalism for the public good. He and his wife seeded the venture with $1 million; another $1.6 million has come in from individual donors and corporations (all identified on the site) plus $1.1 million from foundations. Not that this pace can keep up, but on the last day before launch the Tribune took in $13,000 from 190 founding “members.”

Thornton hired Evan Smith, a renowned journalist, to be editor-in-chief, and both he and the reporters make market-salaries: $315,000 per year for Smith, up to $90,000 for the reporters.

The key aspect of interest to me is that the Texas Tribune is a tax-exempt 501(c)(3) charity (or at least that's what they claim on their web site). The academic community has generated no little amount of angst regarding whether news-gathering organizations qualified as a 501(c)(3) - see the prior blog posts here, here and here.  Rich Schmalbeck at Duke has been in the forefront of the tax-exemption analysis of these questions, presenting a paper on the topic at the May 2009 Law and Society Conference.

Another interesting feature of the Texas Tribune is that although most of their content will be free, they will charge a hefty fee for some "premium" content. According to the PaidContent article, the organization "already has one premium product—the Texas Weekly, a well-respected state politics newsletter acquired earlier this year; Ross Ramsey, the editor, came with it and is the new site’s managing editor. (Ramsey and Smith are acknowledged as cofounders.) Smith says the weekly newsletter has some 1,200 subscribers at $250 a year."  This arrangement raises a host of unrelated business income and commercial activity questions, which Smith apparently is aware of.  Quoting Smith, the PaidContent article notes,

The goal is to grow the circulation base for more “earned income.” It’s a delicate dance. “We actually had deep conversations with exempt counsel and said, what are the things that we can do that qualify as related businesses that we can generate earned income from—because our model assumes we’ll be funded almost exclusively through philanthropy the first year and gradually transition to a model by the third year, where we’re two thirds philanthropy and a third earned income.”

JDC

November 4, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Urban Institute and Social Solutions to Launch Web Portal to Help Nonprofit Performance

According to this story in Reuters, The Urban Institute has teamed up with Social Solutions (a leading provider of human services performance management software) to launch a web portal that will provide nonprofits with information and measurement tools to enhance performance. According to the story,

The portal will feature detailed guides to help agencies identify and use proven and promising practices to serve their clients effectively, and a library of tools to assess whether their lives have improved as intended. Portal content will be developed in conjunction with well-known organizations and consultants.

The first phase of the portal is scheduled to launch in spring 2010, and the partners plan to demonstrate the portal`s proof of concept at Social Solutions upcoming ETOlution 2009 Conference in Baltimore.

JDC

November 4, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 3, 2009

University President Salaries Rise and Grassley Bites

The economy appears to have recovered enough for Senator Chuck Grassley, IA, to resume his critique of the spending habits of colleges and universities.  In this press release posted on IowaPolitics.com, Grassley assails the fact that presidents at private colleges and universities saw their pay go up by an average of 6.5%. “The executive suite shouldn’t be insulated from belt-tightening,” Grassley said. “The pressure on students and families gets greater all the time. The fact that these salaries are growing right now is out of sync with the reality for most parents and students who are trying to pay for college in the midst of high unemployment and after savings for education were either wiped out or greatly diminished last year due to the stock market falling.” 


Grassley's ire was sparked by a new survey of college president salaries released today by the Chronicle of Higher Education.  A more in-depth, balanced analysis of the trend is available from U.S. News and World Report, which noted that the salaries of university presidents make up a very small percentage of the overall cost structure of any college or university and also noted that while "sticker prices" of private colleges had been rising, the schools had been giving out so many more scholarships that the average net price students actually paid for tuition, fees, room, and board had dropped by more than $1,000 since 2005 to slightly less than $12,000.

Still, the prospect of many colleges and universities giving hefty raises to their top administrators during these times of economic crises does smack a bit of Wall Street's bonus culture.  But perhaps Grassley should issue a press release about the escalating salaries of college football and basketball coaches before slamming the presidents; data shows that at universities that operate Division I athletic programs, the head football and basketball coaches are almost certain to make even more than the university president.

JDC

November 3, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Another Tax Controversy Brewing in Urbana, IL?

Most of the readers of this blog know about the pending property tax litigation involving Provena-Covenant hospital in Urbana, IL (see prior blog post here and the previous blog coverage cited).  Now Urbana has a potential new tax controversy on its hands.  Carle Foundation, the tax-exempt entity that owns Carle Hospital in Urbana, recently announced plans to acquire the for-profit Carle Clinic (which employs doctors). Carle Foundation actually already owns most of the property occupied by the clinic, but since the property is leased to a for-profit entity, under Illinois law the property is taxable because it is not used exclusively for charitable purposes.  But if Carle Foundation acquires the lessor (the Clinic) and merges it with the exempt Carle Hospital, the acquisition could take property that currently produces millions in property taxes for Urbana off the tax rolls.  A story in the Champaign-Urbana News Gazette Sunday details the situation, including Carle's promises to continue to make payments in lieu of taxes (PILOTs) to Urbana, although the story is careful to note that Carle Foundation hasn't promised how long it would make those payments, and the Foundation seems to be tying their willingness to make PILOTs at least in part to the outcome of the Provena litigation.  This is going to be a major issue for the City of Urbana; stay tuned, folks.


JDC


November 3, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Monday, November 2, 2009

Charter Schools and Private Benefit

This story in the Fort Wayne, IN Journal-Gazette raises some interesting questions regarding tax-exemption for privately-run charter schools.  As the story notes, many charter schools are run by private, for-profit management organizations.  Ergo, though the school itself may be organized as a nonprofit, management fees paid by the school to the for-profit management might result in excessive private benefit.

While an arms-length contract between a nonprofit and for-profit that pays market value for services rendered should not result in exemption problems (think "phone bill" or "trash collection" or any number of other services that nonprofits pay for on a daily basis), the charter school situation in Fort Wayne raises some serious red flags.  For example, in these cases the management company actually formed the schools, instead of being hired independently.  The management contract extends for as long as the schools have a charter, and the school boards never voted on the management contract - nor does it appear that the boards have any real control over the schools.

In short, this appears to be a situation in which a nonprofit has given "special" economic rights (in this case, an un-negotiated exclusive contract) to a for-profit entity, a situation which both Darryll Jones and I have concluded results in private benefit.  See John D. Colombo, In Search of Private Benefit, 58 Fla. L. Rev. 639 (2006); Darryll K. Jones,The Scintilla of Individual Profit: In Search of Private Inurement and Excess Benefit, 19 Va. Tax Rev. 575 (2000).

JDC

November 2, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

NCPL Conference at NYU Discusses Comparative Worth of Charities

This past Thursday afternoon and Friday (October 29-30), the National Center on Philanthropy and the Law at NYU hosted an invitation-only conference on Measuring the Comparative Worthiness of Charities. Rob Atkinson (Florida State) began the conference Thursday afternoon with a particularly heroic effort entitled Philanthropy and the Law: Remembering and Measuring the Common Good, covering the theories of tax-exemption, deduction, and comparative worth of charities from philosophic, economic, political, and legal viewpoints. Yours truly presented a paper entitled The Role of Redistribution to the Poor in Federal Tax Exemption for Charities that considers some anomalies in the federal tax definition of charity under 501(c)(3) that sometimes requires charities to engaged in poor relief to be entitled to tax exemption, but not always. Evelyn Brody from Chicago-Kent followed on Friday morning with a marvelous presentation on state property tax exemption, All Charities are Property-Tax Exempt, but Some Charities are More Exempt Than Others. Richard Schmalbeck from Duke closed the Friday morning sessions with yet another superb presentation, a paper on potential reforms to federal tax incentives for charities, Reforming the Charitable Sector to Account for Relative Worthiness? (the question mark indicated his general discomfort with such an effort).  A trio of practitioners and academics from Canada (Terrance S. Carter), Australia (Myles McGregor-Lowndes) and England (Debra Morriss) treated participants to comparative views on the topic from their respective countries in the Friday afternoon session.

NCPL publishes the papers presented at its conferences in due course.  See the NCPL web site for more information.


JDC

November 2, 2009 in Conferences | Permalink | Comments (0) | TrackBack (0)