Friday, May 28, 2010
Over a year ago, in January 2009, Brandeis announced a decision to close its Rose Art Museum and sell the art to raise money to support general University operating expenses. After criticism from donors, alumni, students and the art community, the University backed down and looked for other options. The Rose has stayed open, although it has no director or curator and has only a minimal staff.
The Boston Globe reports that Brandeis may now have found another option - an alternative to selling the art. Brandeis will enter into an agreement with Sotheby's for Sotheby's to act as a broker and arrange loans of the artwork. Lisa Dennison, the chairman of Sotheby's, says that the Brandeis arrangement will look for loans to other museums, and not to individuals, although the details have yet to be worked out. Brandeis expects to sign an agreement with Sotheby's next month and hopes to begin considering specific proposals next fall. Although museums often loan art to other museums in exchange for the cost of shipping and insuring the work, some museums have paid for loans of collections. The agreement may allow Brandeis to raise funds that would enable the University to improve its overall financial situation without selling the art. See the story posted on the Brandeis website.
Thursday, May 27, 2010
A survey conducted Doctors Without Borders (Medecins Sans Frontieres) reveals that clinics have had to turn away new patients and fear running out of funding altogether. The survey looked at AIDS work in eight African countries. AIDS programs in Congo, Kenya, Lesotho, Malawi, Mozambique, South Africa, Uganda, and Zimbabwe - and found that clinics in all these countries have all experienced funding cuts. Donors cite the global economic meltdown as the reason for drastically reduced gifts, but the result will be illness and death for those who can no longer get treatment. Doctors Without Borders worries that years of the progress against the disease will unravel. See the story in the Chicago Tribune.
Wednesday, May 26, 2010
In 1998 Oprah Winfrey created the Angel Network and began soliciting donations from the public. The organization received more than $80 million from 150,000 donors and in turn awarded grants to hundreds of organizations. The organization's website has announced that it has stopped accepting new donations, and the website now directs donors to other organizations. The website says that the organization will dissolve after making its final distributions. The announcement notes that Oprah "remains deeply committed to philanthropy" and will highlight charitable organizations on her cable network.
The Kalmanowitz Charitable Foundation has owned the Pabst Blue Ribbon Brewing Company for about 10 years and must sell the company. Paul Kalmanovitz bought Pabst just two years before he died, in 1987. It appears (reading between the lines of the story in the Chicago Tribune and a blog post on the Milwaukee World - described below) that he gave the stock to his wife, Lydia, and ultimately, on her later death, either he or she gave the stock to the foundation. Lydia died after Paul and the stock was distributed to the foundation in July 2000.
The foundation did not sell the stock within five years of when it received the stock, as required by IRC § 4943(c)(6). The foundation requested and received a five-year extension, as permitted by IRC § 4943(c)(7) which permits the IRS to grant an extension for an unusually large bequest, if the foundation had made diligent efforts to sell the stock within the first five-year period. Now the extension period is expiring and the company has found a buyer, C. Dean Metropoulos.
Curious about the Kalmanowitz Charitable Foundation, I did a little google research. The foundation does not appear to maintain a website (my internet research skills are limited so it could be there, but it didn't pop up quickly), and Guidestar did not have a recent 990-PF for the foundation. I did find a blog posting with some interesting information.
In 2006, Michael Horne blogged about the foundation on Milwaukee World (a political blog that focuses on Milwaukee) and then updated the post in July 2008. The blog states Mr. Horne's suspicion that the foundation had grossly undervalued the stock. The blog provides a link to the foundation's 2005 990-PF, which he had found on the Foundation Center website. The 2005 filing shows an asset value of just under $2 million in 2000, increasing to a little over $6 million in 2003, and then to $32,350,680 in 2004. Mr. Horne also reports that the estate of Lydia Kalmanovitz took a charitable deduction of $387.7 for transfers of stock and other estate assets to the foundation, and reports that the IRS challenged the amount of the charitable deduction in 1998.
The Chicago Tribune, which reports today on the sale of Pabst, does not talk about the foundation, except to say it owns the stock, but does note that the foundation will receive $250 million for the stock. Perhaps the stock has appreciated dramatically in five years, but if so, that's a substantial increase in value!
A list of "Law, Society, and Taxation" papers relating to taxation that will be presented at the Law and Society Conference in Chicago this weekend includes the following relating to nonprofit organizations:
David Louk (Yale/Berkeley) "Unrelated Operations of Universities and Religious Organizations and Their Favorable Tax Treatment"
Shannon McCormack (UC Davis) "Deconstructing the Charitable Deduction: Devising a Workable Framework to Analyze Charitable Transfers"
Brian Galle (Florida State/GW (and soon Boston College)) "Keep Charity Charitable"
Todd Henderson (Chicago) "Corporate Philanthropy and the Market for Altruism"
Benjamin Leff (American) "Tax Benefits for For-Profit Do-Gooders"
Shruti Rana (Maryland) "Micro-Innovation"
Roger Colinvaux (Catholic) "The Pension Protection Act of 2006: The Beginning or the End of Reform of the Tax Status of Charitable Organizations"
James Fishman (Pace) "Stealth Preemption: The IRS’s Corporate Governance Initiative"
Terri Helge (Texas Western) "The Limitless Private Benefit Doctrine"
Richard Schmalbeck (Duke) "Differential Subsidies among Charities and Their Relation to Worthiness"
Tuesday, May 25, 2010
Fenton has released the 2010 Fenton Forecast, the results of a survey of 1,000 charitable donors that looks at public perspectives on the leadership and effectiveness of nonprofits. The survey reveals that most Americans have a positive view of nonprofits but that a majority will give less to nonprofits next year. The survey provides interesting information about technology (nonprofits need to increase use of social media), the ways people judge nonprofits (stewardship of funds, trustworthyness, and the provision of valuable services are the most important factors), and which nonprofits are perceived as being the most effective (the top 3 are the American Diabetes Association, the Special Olympics and the Red Cross). To see the survey, go here.
Eli Broad, LA philanthropist and art collector, is continuing to move forward with plans for a museum to house his art collection. The museum will likely be located next to the Walt Disney Concert Hall. The designs from a competition involving six architecture firms was presented to a jury last week, and Mr. Broad may make a decision on the design as early as this week. The museum will house Mr. Broad's collection of contemporary and postwar art, including works by Jeff Koons, Cindy Sherman, Joseph Beuys and Any Warhol. Both the NY Times and the LA Times have reports on the museum.
Monday, May 24, 2010
Some museums have been hit hard by the economic downturn. Although most will try to weather this difficult period, some struggling museums have looked at other options. For a few small or mid-sized museums the answer has been a partnership with a university. The museum may turn over control of its art to the university or move the exhibit space to campus. An article in PNNOnline says that both the Museum of Contemporary Craft in Portland, Oregon, and the Judah L. Magnes Museum in Berkeley, California have taken this approach. The hope is that a university will be more likely to keep the collection intact than would a private collector and will also provide public access. The decision is a difficult one, however, and recently the Fresno Art Museum decided against a merger with the California State University due to concerns about losing control over where the art would be.
St. James Episcopal Church in Cambridge, MA, was falling apart. The church had used what money it had to make repairs, but it seemed to be without options. Then a developer, Oaktree Development, offered a partnership. The developer would build a four-story, 78,000 square foot development on the St. James property. St. James would keep the church and get money to make the needed repairs. Everyone wins, except the neighbors who aren't thrilled with the proposed development. In addition to concerns about congestion in the neighborhood, the neighbors lament the loss of the church's garden, one of the few green spaces in the area. The project still needs approvals from city, state and church officials. The Boston Globe describes the project and the controversy.