Wednesday, October 19, 2011
As previously blogged (see here), the George Kaiser Family Foundation's (GKFF), a tax-exempt entity and the largest investor in the failed solar company, Solyndra, is garnering further scrutiny for its alleged lack of sufficient contributions to charitable activities. As detailed in a Washington Post article, the ever-vigilant watchdog on charities' activities, Senator Charles Grassley, wrote to Treasury Secretary Geithner and IRS Commissioner Shulman urging them to finalize rules that would prevent supporting organizations like GKFF from avoiding the mandatory payout rules imposed on private foundations. By establishing itself as a supporting organization for the Tulsa Community Foundation, GKFF is effectively circumventing private foundation rules to which it would otherwise be subject. In some recent years, according to the Post article, GKFF distributed as low as .2 percent of its assets to charitable activities.
As Senator Grassley stated at the Senate Finance Committee hearing yesterday, "[t]he recent Solyndra scandal highlights the need for further reforms. With Solyndra, the government didn’t just lose out on its investment through the $535 million loan guarantee [from the Energy Department]. It also lost out on the tremendous subsidy it provided the George Kaiser Family Foundation through the charitable contribution deduction.” As John Colombo stated in his prior blog entry on this issue, the lack of accountability that results from these type of supporting organization scenarios is problematic and should be eliminated.