Friday, May 24, 2013
New York lawmakers are currently in the process of reforming the state’s Not-For-Profit Corporation Law. Key players in the reformation process explain that they are trying to reconcile the differences in S3755 and S5198.
The current New York Not-For-Profit Corporation Law has not experienced significant changes since 1969. The law’s contemporary critics claim that its regulatory scheme is overly intrusive and has ultimately caused nonprofit organizations to incorporate outside of the state of New York.
New York is home to about 103,000 nonprofit organizations that employ somewhere around 1.25 million people. These numbers clearly indicate that New York nonprofits do a lot of good for the state in terms of providing public benefits and employment opportunities for New Yorkers. However, each year New York also loses millions of dollars in property taxes due to nonprofit tax exemptions. Is the state in which a nonprofit is incorporated a valid consideration when weighing the benefits and burdens associated with tax-exempt organizations? If a nonprofit organization chooses to be present and operate in New York, but simply elects to incorporate outside of the state, in what way is the state of New York affected?
Thursday, May 23, 2013
“MOOC” stands for massive open online courses and just last year the New York Times named 2012 “the year of the MOOC.” Additionally, several of the nation’s most prestigious schools have partnered with nonprofit educational organizations such as edX and Coursera to offer free online classes. Consequently, many people view free MOOCs as a way to provide an Ivy League education to those who either will not or cannot otherwise pay the costs of receiving an education at schools like Harvard and Yale.
However, one criticism and drawback of MOOCs is that they are not accredited. Consider, the Khan Academy, a 501(c)(3) nonprofit organization whose mission is to change “education for the better by providing a free-world class education for anyone anywhere.” The Khan Academy has around 6 million regular monthly users, and about 4,000 other people utilize the organization’s online tutorials. While the Khan Academy offers Ivy League quality courses, people who take the time to study the material and do the work often have trouble finding a market for their newly acquired skills.
If organizations like the Khan Academy eventually do receive accreditation, what impact if any, will their accreditation have on the nonprofit schools within the traditional education system? Should accreditation have an impact on the nonprofit status currently conferred to MOOCs?
Wednesday, May 22, 2013
Boston College Sociologist Paul G. Schervish is one of the country’s prominent scholars of philanthropic studies. This August Schervish will be recognized for his contributions and presented with the 2013 ASA Distinguished Career Award.
Much of Schervish’s research relates to wealth transfer and philanthropy. In 2003, Schervish helped to found the Wealth & Giving Forum, a “peer-centered endeavor” designed to encourage wealthy families and individuals to “make more resources available for good causes.” The Wealth & Giving Forum seems to have adopted a “with great wealth comes great responsibility” approach to charitable solicitation and giving.
The structure of the Wealth & Giving Forum offers an interesting way for people to consider charitable giving in a very particular context. A brochure of the Wealth & Giving Forum explains, “The Wealth & Giving Forum is for high-net-worth individuals and families who want to harness their creativity and resources to meet the human, cultural, and environmental challenges of the 21st century.” Additionally, the Wealth & Giving Forum is “directed by and for wealth holders” and it operates by “invitation-only gatherings, regional and topical programs, and publications.”
Is there anything alarming about the exclusivity of the Wealth & Giving Forum’s approach? If so, is the exclusivity offset by the benefits derived from the Wealth & Giving Forum?
Tuesday, May 21, 2013
A few weeks ago, a federal judge in California sentenced 58 year-old Christine Daniel to 14 years in federal prison. Daniel, a former doctor and Pentecostal minister, ran a health clinic used to offer Daniel’s “herbal treatments.” Daniel encouraged her cancer patients to stop chemotherapy treatments and charged them hundreds of thousands of dollars for these treatments which she claimed could cure cancer, diabetes, hepatitis, and many other diseases and conditions.
Daniel tried to make her patients believe the clinic was a credible nonprofit organization by telling her patients to classify their payments for “medical services” as donations to the clinic. At trial, prosecutors introduced evidence that Daniel’s failure to report taxable income resulted in tax losses to the government in the amount of $73,895.
It is safe to assume that cancer patients and their families are among some of those most vulnerable people nonprofit organizations seek to help. Consequently, while classifying payments for services as donations in most circumstances may seem a bit alarming, people desperate for life preserving medical treatment may disregard such traditional red flags if doing so means there is an opportunity to try something they believe could save their life or the life of a loved one. Certainly, this conception of the vulnerability of cancer patients isn’t novel. However, what, if anything, can be done within the nonprofit sector to safeguard against people taking advantage of this vulnerability?dab
Monday, May 20, 2013
In his state of the township speech, Lawrence, New Jersey Mayor Jim Kownacki suggested the city’s weak budget is partially attributable to the fact that it loses $287 million in property taxes because of local nonprofit property tax exemptions. However, Kownacki was quick to explain that he wasn't trying to attack nonprofit organizations and he acknowledged that nonprofits “do a lot of work for [the community] and help us in a lot of ways.”
Lawrence officials have asked the community’s nonprofit organizations for financial help in the past by asking that the organizations donate a certain percentage of the property taxes they would owe if not for the exemption.
Does this proposed collaboration between the public and nonprofit sector conflict with any of the justifications for the charitable tax exemption?