May 27, 2011
Aprill on Politics and the Gift Tax
Ellen Aprill (Loyola-Los Angeles) has posted a comment on the Loyola-L.A. faculty blog regarding the emerging dispute over whether the federal gift tax applies to large, individual donations to tax-exempt, section 501(c)(4) nonprofit organizations. Readers interested in more in-depth discussion of this topic would be well advised to take a look at her recent article on the same subject.
NYT: IRS Recognizes Tax-Exempt Charity Status of Group that Stung ACORN & NPR
The New York Times reports that the Internal Revenue Service has issued a positive section 501(c)(3) determination letter to Project Veritas, a group best known for its successful sting operations against the now defunct ACORN and more recently against NPR fund-raising executive Ronald Schiller. The article links to the letter and other application documents that were obtained by the Chronicle of Philanthropy through a Freedom of Information Act request. According to the exemption application, the mission of Project Veritas "is to investigate and expose corruption, dishonesty, self-dealing, waste, fraud, and other misconduct in both public and private institutions in order to achieve a more ethical and transparent society." Both this article and the Chronicle of Philanthropy article on the IRS decision provide further details about the organization's current and planned activities.
May 26, 2011
Bloomberg: "For-Profit College Costs Surpass Nonprofit Peers in U.S. Study"
Bloomberg reports that the U.S. Department of Education's annual The Condition of Education 2011 study for Congress finds that full-time, dependent students at for-profit colleges paid an average of $30,900 annually in the 2007-2008 academic year, as compared to $15,600 at public colleges and $26,600 at private nonprofit schools (see Figure CL-4 on page 11 of the study). These costs include living expenses such as housing and food and are after taking scholarships into account, which scholarships are significantly higher at at private nonprofit colleges than at for-profit schools. The study also found less spending on instruction per student in 2008-2009 by for-profit schools, with four-year, for-profit colleges spending $2,659 per student, public institutions spending $9,418, and private, four-year, nonprofit colleges spending $15,289 (Figures CL-3 on page 10). All these figures are in constant 2009-2010 dollars. Finally, for-profit schools also had the highest average loan amounts in 2008-2009 for students with loans and the highest percentage of students with loans, with $9,754 and 81 percent for 4-year, for-profit institutions as compared to $7,712 and 61 percent for 4-year, private, not-for-profit schools and $6,029 and 47 percent for 4-year, public schools (Figure CL-5 on page 12).
SF Chronicle: "Deal on CSU, UC Foundation Disclsoures"
The San Francisco Chronicle reports that California State University (CSU) and University of California (UC) officials have agreed to subject foundations affiliated with their systems to the California Public Records Act. According to the article, CSU has at least 23 such foundations, which raise money for CSU campuses, and UC has 10 such foundations, one for each of its campuses. Together these foundations manage billions of dollars in assets. Pressure for such disclosure apparently arose in the wake of the revelation that a CSU-affiliated foundation had hired former Alaska Governor Sarah Palin to speak at a fundraiser for an amount ($75,000) that the foundation refused to disclose until ordered to do so by a court. The deal would also apply to auxiliary enterprises associated with CSU; UC auxiliaries already are subject to the Act. It will be codified through legislation sponsored by state Senator Leland Yee (D-San Francisco). At least one major sticking point had been disclosure of donors' identities, but the most recent bill would require such disclosure only if a donor received a gift or service from the university valued at $2,500 or more, won a non-bid contract within five years of the donation, or, according to Senator Yee's press release on the deal, sought to influence curriculum or university operations.
May 25, 2011
CBO: Options for Changing the Tax Treatment of Charitable Giving
The Congressional Budget Office released a report yesterday entitled Options for Changing the Tax Treatment of Charitable Giving. The report reviews 11 options grouped into four categories:
- Retaining the current deduction for itemizers but adding a floor.
- Allowing all taxpayers to claim the deduction, with or without a floor.
- Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 25 percent of a taxpayer's charitable donations, with or without a floor.
- Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 15 percent of a taxpayer's charitable donations, with or without a floor.
The CBO evaluated the options with respect to their cost to the federal government (the "federal tax subsidy"), their effect on the total amount donated to charity, and the extent to which different income groups would benefit or be hurt by the proposed change.
May 24, 2011
Laura Brown Chisolm (1948-2011)
It is with great sadness that I report Laura Brown Chisolm passed away this past Saturday after a long illness. As many readers of this blog know, Laura was a pioneering nonprofit law scholar, particularly with respect to advocacy by nonprofit organizations. She also served on the faculty of the Case Western Reserve University School of Law for over 25 years, including as a Professor since 1990 and also most recently as the Director of the new Center for Social Justice. She will be greatly missed by her many friends and colleagues, her students, and her family. She is survived by her husband, Guy "Mac" Chisolm, daughter Adrienne Chisolm Stephens, son-in-law James Stephens, and grand-daughter Natalie Stephens. In lieu of flowers, they ask that contributions be made in Laura's name to the Breast Cancer Vaccine Fund of Cleveland Clinic's Lerner Research Institute, the Nature Center at Shaker Lakes, Heifer International, or Groundworks Dance Theatre. A memorial service will be held this Thursday, May 26th, from 4:30 to 6:30 p.m., at the Cleveland Botanical Gardens, 11030 East Blvd., Cleveland, OH 44106.
UPDATE: Cleveland Plain Dealer Obituary