Tuesday, June 16, 2015
The Washington Post reported yesterday that a coalition of community groups filed a 22 page complaint against WalMart Foundation, essentially accusing the foundation of operating for private benefit rather than the public good: From the Post article:
More than a dozen community groups filed a complaint with the Internal Revenue Service Monday alleging that the Walmart Foundation violated its tax-exempt status by using charitable funds to advance the retailer’s entrance into urban markets including Washington. The 22-page complaint, addressed to IRS Commissioner John Koskinen, details the retailer’s marketing and lobbying activities as it sought approval to open stores in New York City, Boston, Chicago, Los Angeles and other cities. The groups allege that the foundation is completely controlled by the company and that it “appears to target its donations and influence its grantees primarily to assist WalMart to achieve those expansion goals, ultimately providing Walmart more than an incidental benefit. Walmart Foundation’s activities are impermissible under the Code.”
Walmart has been forced to defend itself against allegations that its multi-billion dollar foundation has been using tax-exempt funds to help the retail chain expand into urban areas. On Monday, more than a dozen community groups filed a complaint with the Internal Revenue Service alleging that the WalMart Foundation violated tax code by targeting its donations to cities where the big-box giant has faced opposition to its growth plans. Data analysis of tax returns by these local nonprofits shows an uptick to the tune of millions in donations from the WalMart Foundation to organizations in Boston, New York, Washington D.C., and Los Angeles as WalMart pursued store openings in these cities.
What I found most curious and -- from a purist's standpoint, I suppose -- most disconcerting is the complaint's imprecise sort of casual discussion of private inurement and private benefit. Granted, I have only skimmed the complaint thus far but it seems the complainers are really just sorta casting a wide net and hoping to catch violations that might be lurking rather than making a strong case to suggest any real violations they know to exists. Sometimes premature accusations made for the purpose of attention or sensationalism do more harm than good. I can't help but wonder if this is a case in point.
Wednesday, June 10, 2015
One of my least favorite days in Nonprofits class is the day that we discuss the difference between trust and corporate fiduciary duties (Sibley Hospital, anyone?). Lest one think that the distinction is purely academic, along comes the sad case of Sweet Briar College to reaffirm that this area of law remains completely and utterly confusing.
If you’ve not been following the story, Sweet Briar College’s operating entity is a “non-profit corporation” (Complaint, Para. 6) which was created by the Virginia General Assembly “to administer the trust created by the will” of its primary funder, Indiana Fletcher Williams. The Complaint also asserts that SBC is a charitable organization under the Virginia Charitable Solicitation laws and is a “trustee” under Virginia’s version of the Uniform Trust Code. (So I’m confused already….)
According to the Complaint, the provisions of Mr. Williams’ will place his residuary estate in a trust. The trustees of that trust were instructed to create a corporation to run a women’s college in perpetuity. It would appear that in 1901 in Virginia, a nonprofit corporate charter could only be obtained by act of the General Assembly, and so it was. (Complaint, p. 17). The corporate charter incorporated the terms and conditions of Mr. Williams’ will, which required the assets to be held in perpetuity for the women’s college and directed that the assets not be sold.
Fast forward to March, 2015, when the current Board of Directors of the college announced that it would close the doors of the college, and liquidate its assets, including its endowment (Complaint, p. 26) due to the college’s poor financial condition. Litigation, of course, ensued.
The Complaint alleges violations of the Uniform Trust Code, which it asserts is applicable not only the original funding of the College occurred through the trust under Mr. Williams’ will, but also because “the Act of the Assembly creating the College requires that the College be administered in the manner of an express or charitable trust” (Complaint, p. 55). It then states, “Because the College is a charitable corporation, the assets held by Defendants are deemed to be held in trust for the public.” (Complaint, p. 56). Among other things, the original Complaint requested a temporary restraining order and a preliminary injunction restraining actions in furtherance of closing the school.
So the question then becomes, Sweet Briar College a trust? Is it a corporation? Does it matter? Should it?
More on this Nonprofit Law Prof Blog Cliffhanger next time….
Tuesday, June 9, 2015
You may have been following the FOIA lawsuit by Public.Resource.org, (a Section 501(c)(3) organization headed by Carl Malamud that is dedicated to open government) against the IRS. Public.Resource.org filed a FOIA request for information on the Sheet Metal and Air Conditional National Association (SMACNA) and its affiliated entities (the original complaint is here), but demanded that the IRS turn over the information in electronic format (not paper copy). The IRS resisted, arguing that it was administratively burdensome and that the paper copies were sufficient. In January of this year, however, the District Court ordered the IRS to turn over the electronic files of the requested Forms 990 within sixty days.
Sixty days came and went. Appeals happened. According to The Chronicle of Philanthropy, however, it looks like the IRS apparently finally released the SMACNA documents this week (the documents are here). Of greater interest (not that sheet metal isn’t interesting, … I guess… ) is the article’s report that the IRS is dropping its appeal. Given that Malamud wants the IRS to create a fully searchable database of all electronically filed Forms 990, I wonder what comes next? Will the IRS voluntarily comply with electronic file FOIA requests? In the process of responding to this law suit, did the IRS set up a procedure that could be replicated easily? Are they going the full database route – according to the article, it appears that discussions are underway. In the grand scheme of things, such a database would be very useful, but so would a great number of things administratively at the IRS. After all, the IRS has so many spare folks sitting around with nothing to do…
As an aside, I wondered why the sheet metal folks drew the ire of Public.Resource.org – the backstory appears to be that Public.Resource.org investigated and sued the SMACNA with regard to the association’s efforts to have its standards incorporated into state and local safety codes.
Thursday, May 28, 2015
Public Interest Registry (PIR), administrator of the .org top-level domain, has launched two new domains that nonprofits all over the world may use: .ngo and .ong. This development is directly on target with creating more transparency and accountability for nonprofits as discussed earlier this week. Purchasers of the domains become members of PIR’s online directory, OnGood. As members, they may elect to set up profile pages and accept online donations. A Nonprofit Quarterly article discusses four reasons why nonprofits should consider registering with the new domains. Overall, this may serve as an important step toward making measurements of social impact more accessible to donors.
Wednesday, May 27, 2015
Continuing from yesterday’s post, it looks like donors are not the only ones looking for a return on their investment. Private foundations are acting more like venture capitalists these days. Today Fortune featured an article on the ability of foundations to make grants to start-up ventures that the IRS treats as regular charitable gifts in terms of tax treatment. Several of these transactions are occurring in the medical research area. What are the foundations receiving in return? According to the article, “the foundations typically take an equity stake, claim the rights to a portion of the company’s future sales, or require a payment when a drug achieves a clinical milestone.” Some nonprofits have actually earned returns totaling millions of dollars.
I have been thinking about the impact of yesterday's indictment of numerous FIFA officials on the various organizations' tax statuses, both here in the United States and abroad -- particularly under the tax laws of Switzerland. The FIFA matter would make for good class discussion, I think. According to a DOJ Press Release issued this morning:
A 47-count indictment was unsealed early this morning in federal court in Brooklyn, New York, charging 14 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The guilty pleas of four individual defendants and two corporate defendants were also unsealed today.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella. Jeffrey Webb and Jack Warner – the current and former presidents of CONCACAF, the continental confederation under FIFA headquartered in the United States – are among the soccer officials charged with racketeering and bribery offenses. The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
I did some preliminary checking and learned that FIFA is a complicated Swiss based international charitable organization comprising several other national and international nonprofit and tax exempt organizations, including the U.S. Soccer Foundation. It seems rather axiomatic that when executives -- insiders and disqualified persons, likely -- use the organization's venue selection and contracting processes to extract bribes, kickbacks, and other illicit payments from third parties, the organization is being operated for private benefit. I wonder, though, about the extent to which an umbrella organization's misdeeds can cause legal issues for one or more of its member organizations, such as the U.S. Soccer Foundation. And even if the bribes and kickbacks constitute or indicate private benefit, would the organizations subject to U.S. law be able to point to their other activities to support an argument that whatever private benefit existed was substantially outweighed by their good deeds and therefore not fatal to tax exemption? Anyway, the whole topic, along with all the exhibits and so forth available online would make for good discussion fodder in a class or seminar dealing with tax exemption in the international arena. The L.A. Times has some useful articles on the subject.
Tuesday, May 26, 2015
I have blogged often about the rise of a donor base that demands results from the nonprofits. My theory is that an efficient charitable market, where investment ends up in the hands of those charities that will put it to its most productive use, is crucial. Of course that necessitates reform to our US cross-border giving laws so that donors truly may have the ability to weigh the social impact (or return) associated with US versus non-US charities before deciding where to give. This was the subject of two parts of a three part series I have written. An efficient charitable market also requires the charitable sector to learn from the impact investing sector in terms of measuring and reporting social impact, which is the topic of my forthcoming final article in the series.
CNBC dealt with the donor dilemma of where to give effectively earlier this month. It announced that well-known think tank in the nonprofit arena, Milken Institute, has developed the Center for Strategic Philanthropy (CSP), which is designed to help donors make better giving choices. The main arm of the CSP is the Philanthropy Advisory Service. As Executive Director of the CSP, Melissa Stevens, commented, donors "are spending so much more time on their philanthropy because they want to do it well." The need for providing donors with concrete information about return on their investments is no secret to other competitors in the space such as Rockefeller Philanthropy Advisors, Pembroke and the Giving Pledge. With over $250 billion being given annually in the US, there is plenty of room for advising according to area of expertise. The CSP has already laid claim to the medical research area. According to Stevens, donors are focusing on “maximizing the social return on their philanthropic portfolios,” a phrase which necessitates the development of an efficient charitable market.
Monday, May 25, 2015
Earlier this month, we covered the 9th Circuit decision that denied the Center for Competitive Politics (CCP) an injunction that would have restricted California Attorney General Kamala Harris from requiring a list of donors who had contributed more than $5,000 in a year. See Lloyd Mayer's post.
Under current California law, nonprofit groups seeking donations from California are required to disclose donor names to the AG and to the IRS. The CCP and America for Prosperity have refused to surrender these lists asserting that their donors would be harassed. Harris has indicated that the lists would be kept confidential and used only for investigatory purposes.
As an update, the Supreme Court has denied an emergency appeal from the CCP. The CCP filed the appeal with Justice Kennedy, who denied it without prejudice. David Keating, President of the CCP, has stated that the center will continue injunction efforts in the event Harris attempts to collect donor information. Interesting, Justice Kennedy is a proponent of free speech and free spending in terms of politics, two aims the CCP promotes; however, he is also in favor of disclosure laws. This case raises important First Amendment questions for the sector. See LA Times.
Thursday, May 14, 2015
In an apparent pro-active effort to engage with a charitable nonprofit before it collapses, the Wall Street Journal and the NY Times report that Attorney General Eric T. Schneiderman has sent inquiries to board members of the Cooper Union for the Advance of Science and Art, asking about management of the college's endowment and transactions relating to the Chrysler Building, the land under which the college owns. The attention comes at least in part because of the college's decision in 2014 to begin charging undergraduate tuition, allegedly in order to avoid insolvency. The ongoing investigation has threatened the tenure of the college's president, although his position may already been at risk given apparent tensions between him and the board chairman. According to these various news reports, the potential issues center around possible financial mismanagement, including a failure to sufficient diversity investment holdings and questionable loan terms related to a new building, and lack of transparency, including with respect to regulators. Stay tuned.
There has been a drumbeat of allegations in Canada that the Canada Revenue Agency is targeting left-leaning charities for special scrutiny with respect to their alleged political activity. The latest group to make this assertion is Sierra Club Canada Foundation, which according to a CBCNews report expected auditors to arrive at its offices this week to look for evidence of political activity exceeding the permitted 10 percent level for Canadian charities. Concerns about such audits began in 2012, when 60 political audits of charities began that allegedly disproportionately hit environmental and other left-leaning charities. In 2014 the National Post reported that more than 400 academics had demanded the end of a CRA audit focused on the left-leaning Canadian Centre for Policy Alternatives, and last month CBCNews reported on a Steelworkers charity protesting being subject to a similar audit (hat tip: David Herzig).
According to the various press reports, the National Revenue Minister has repeatedly denied any bias in audit selection, stating that CRA officials make such decisions independently of political appointees. As in the United States, CRA is not able to comment on specific audits because of tax law confidentiality rules. A left-leaning think tank has called for an independent probe, however, asserting that right-leaning charities with apparent political involvement appear to have escaped scrutiny (see also CBCNews report). There does not appear to be an investigative body, such as the Treasury Inspector General for Tax Administration in the U.S., that is well positioned to engage in such a probe, however (Canadian readers, please correct me if I am wrong on this point).
The Daily Beast reports that questions and outrage are swirling around the transfer of $863,000 from the New Orleans Public Library Foundation to the Peoples Health Jazz Market, a new $10 million home for the acclaimed New Orleans Jazz Orchestra. The transfer allegedly came about because of the efforts of the orchestra's CEO and the orchestra's musical leader. The CEO served on the Foundation's board and eventually became its board chair, while the musical leader also served on the board and then was given discretion in 2012 over the Foundation's spending by the board. Both the CEO and musical leader are paid salaries by the orchestra. Since the story broke the orchestra CEO has resigned from the Foundation's board, the orchestra has pledged to return the funds at issue to the Foundation, and New Orlean's Mayor Mitch Landrieu has met with the boards of both groups and demanded changes at the Foundation.
In August 2013, the NY Times reported that lawyers from Simpson Thacher & Bartlett had interviewed Clinton Foundation executives and former employees over a two-week period, interviews which "had led the lawyers to some unsettling conclusions." According to the article, concerns included the foundation's relationship with a consulting firm founded by a one-time personal assistant to Bill Clinton and for which Mr. Clinton had worked as a paid advisor, its aggressive fundraising and lack of financial stability, and tensions between old political hands and professional staff. It was also a time of transition for the Foundation, particularly with Chelsea Clinton emerging as a leader (and now a defender of it). And of course all of these developments occurred with an increasing anticipation of Mrs. Clinton's expected 2016 presidential bid.
Additional Coverage: Clinton Family Foundation Raises Big Money and Big Questions (Washington Post/AP); If Clinton Is Elected, Family Foundation Could Face Changes (Washington Post/AP); previous stories.
The Treasury Inspector General for Tax Administration issued a new "Final Report" on the IRS handling of exemption applications involving political campaign intervention. Here are excerpts from the conclusions:
The IRS has taken significant actions to eliminate the selection of potential political cases based on names and policy positions, expedite processing of Internal Revenue Code (I.R.C.) Section (§) 501(c)(4) social welfare organization applications, and eliminate unnecessary information requests.
First, the IRS eliminated the use of Be On the organizations, if it becomes a permanent Look Out (BOLO) listings, . . . .
Second, the Exempt Organizations function completed processing for 149 of the 160 applications for tax-exempt status that, as of December 2012, had been open for lengthy periods. . . . .
The report further provides that in the absence of BOLO listings the IRS has created an "Emerging Issues Committee" to screen, review, and monitor emerging issues based on actual or planned activities of applicants, as opposed to names or policy positions. The report also provides of 149 closed applications, the IRS approved 107 (72%) and disapproved 7 (5%), while applicants either withdrew (8 or 5%) or failed to respond to requests for information (27 or 18%) the remaining applications. Of the 11 applications still open, six are in litigation and five have either proposed adverse determinations or are in Appeals. Reading between the lines, a Bloomberg article notes that these figures suggest that the IRS has sent Crossroads GPS a denial letter, since the Crossroads application is still outstanding and is not in litigation. As the Center for Responsive Politics notes, however, the statute of limitations might now bar collection of any taxes from Crossroads even if its application is ultimately denied. Additional Coverage: Forbes (Peter Reilly).
Relatedly, the NorCal Tea Party Patriots have convinced the federal judge overseeing their lawsuit against the IRS to require the IRS to identify the 298 groups that had submitted applications identified as potential political cases as of May 31, 2012 (mentioned on page 4 of the TIGTA Final Report) in order to facilitate class certification in that litigation. The Judge's order explains why she concluded Internal Revenue Code section 6103 does not prevent this limited discovery. Additional coverage: Forbes (Peter Reilly).
In other news, TIGTA managed to recover 6,400 emails to or from Lois Lerner from between 2004 and 2013, although it is unclear how many might be duplicates of the tens of thousands of emails previously recovered by the IRS and turned over to Congress. No final word from the congressional committees reviewing the emails regarding whether they add anything to the ongoing investigations, although initial indications are that there is little new in them. Coverage: CNN; Forbes (Kelly Phillips Erb); The Hill.
Finally, the House has passed a package of bills relating to the 501(c)(4) application mess, although their fate in the Senate (and on the President's desk) is uncertain. The most prominent is H.R. 1104, which would extend a gift tax exemption to 501(c)(4) social welfare organizations, 501(c)(5) labor, agricultural, and horticultural organizations, and 501(c)(6) trade associations and chambers of commerce. Currently donors to 501(c)(3) charities generally enjoy such a deduction (under Internal Revenue Code section 2522), and transfers to 527 political organizations are exempt from the gift tax (under section 2501(a)(4)). The other bills are H.R. 709 (termination for political targetting), H.R. 1026 (taxpayer privacy), H.R. 1058 (Taxpayer Bill of Rights), H.R. 1152 (use of personal email accounts prohibition), H.R. 1295 (self declaration process and declaratory judgment actions for 501(c)(4)s), and H.R. 1314 (right to appeal). Coverage: Forbes (Robert W. Wood); Politico.
Wednesday, May 13, 2015
The oral argument before the Supreme Court in Obergefell v. Hodges (the same-sex marriage case) included the following exchange between Justice Alito and Solicitor General Verrilli (on page 38 of the transcript):
JUSTICE ALITO: Well, in the Bob Jones [University v. United States, 461 U.S. 574 (1983)] case, the Court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or college if it opposed same-sex marriage?
GENERAL VERRILLI: You know, I -- I don't think I can answer that question without knowing more specifics, but it's certainly going to be an issue. I -- I don't deny that. I don't deny that, Justice Alito. It is -- it is going to be an issue.
The possibility that the contrary to fundamental public policy limitation found by the Court in Bob Jones to be included in Internal Revenue Code section 501(c)(3) might prohibit 501(c)(3) organizations from engaging in discrimination based on sexual orientation had been raised before this argument, including by fellow blogger Nicholas Mikay (Creighton) in a 2007 article (where he concluded a statutory amendment prohibiting discrimination would provide a stronger legal basis for such a prohibition). This exchange highlights the fact that how the Supreme Court decides the same-sex marriage case could have strong ripple effects for tax-exempt organizations, even though the IRS has for more than 30 years been reluctant to apply Bob Jones beyond the context of racial discrimination and even though any supporters of LGBT rights will have difficulty establishing their standing to force the IRS' hand in this area.
In another court in DC, the government found itself on the defensive as a three-judge panel expressed shock that the Justice Department would even assert that the IRS' treatment of applications for recognition of exemption under section 501(c)(3) during the 270 days before such applicants gained the right to go to court (assuming no substantive interaction with the IRS during that period) could somehow escape scrutiny under the Constitution. During oral argument (large MP3 file) before the U.S. Court of Appeals for the D.C. Circuit in case involving the application of Z Street, judges repeatedly expressed skepticism that somehow the application process was shielded from constitutional requirements, including First Amendment concerns. Additional coverage: Wall Street Journal (opinion); see also previous blog post.
Finally, the U.S. Court of Appeals for the Sixth Circuit recently upheld a preliminary injunction barring the enforcement of a local ordinance that banned outdoor, unattended donation bins. The court found that plaintiff Planet Aid (a 501(c)(3) organization) had demonstrated a strong likelihood of success on the merits of its constitutional claim under the First Amendment, finding that the ordinance was a content-based regulation of speech because it only applied to outdoor receptacles with an express message relating to charitable solicitation and giving. As such, it is subject to strict scrutiny, and the court concluded that the ordinance likely would not survive such scrutiny given the weak relationship between the ban and the city's interest in aesthetics and preventing blight and the availability of other, lesser content-neutral restrictions that could further the same interest.
Earlier this month the U.S. Court of Appeals for the Ninth Circuit upheld a lower court's denial of a preliminary injunction against the California Attorney General. The injunction would have prevented the AG from requiring the section 501(c)(3) Center for Competitive Politics (CCP) to provide an unredacted copy of its Schedule B to IRS Form 990, which schedule identifies significant donors to the group. The AG had required the filing of the schedule as a condition of the group maintaining its registration with the state as a charity eligible to solicit contributions in California.
The court, applying exacting scrutiny, rejected what it characterized as CCP's facial challenge to the disclosure requirement, concluding that CCP had failed to either allege or produce evidence that the disclosure of their identities to the AG would cause these significant donors to "experience threats, harassment, or other potentially chilling conduct." Slip. Op. at 16. While the court noted that the AG planned to keep the donors' identities confidential and so not release them to the public, it also concluded that CCP had failed to provide evidence that even public disclosure would chill the First Amendment activities of its donors, so the potential for the AG to change her policy in this regard did not salvage CCP's claim. Slip Op. at 18 n.9. Finally, the court concluded that the Internal Revenue Code section 6104, to the extent it governs the ability of the Treasury Department to make information regarding tax-exempt organizations available to state officials, did not preempt the AG's disclosure requirement.
The decision has ramifications for both the pending lawsuit by the Americans for Prosperity Foundation (APF) challenging the same requirement and for the authority of AGs more generally to demand unredacted copies of Schedule B and other donor information. APF was initially more successful than CCP in its lawsuit, obtaining a preliminary injunction blocking the application of the requirement to it, but that victory may now be in doubt given this decision relating to CCP. As for other states, the court noted in a footnote the several states that already have similar requirements, and more states may seek to gather this information if this appellate court decision stands.
Additional Coverage: LA Times.
Thursday, May 7, 2015
New York City seems to be in the news a lot this week. In a press release issued yesterday, the Carnegie Corporation of New York announced grants totaling $3.6 million in support of education and enrichment programs in the greater New York City region.
The awards form part of the foundation's 2015 Presidential Discretionary Grants program. Pursuant to that program, eighteen museums, libraries, and performing arts and science centers received grants of $200,000 each for existing programs aimed at K-12 students. Grant recipients include the American Museum of Natural History; the Asia Society; the Brooklyn Academy of Music; Carnegie Hall; Cooper Hewitt, Smithsonian Design Museum; Liberty Science Center; Lincoln Center for the Performing Arts; the Metropolitan Museum of Art; the Morgan Library & Museum; the Museum of Modern Art; the National September 11 Memorial & Museum; New Jersey Performing Arts Center; the New York Botanical Garden; the New York-Historical Society; the New York, Brooklyn, and Queens public libraries; and Studio in a School.
Commenting on the awards, Carnegie president, Vartan Gregorian, said:
New York City, one of the cultural capitals on the United States, has the largest public school system in the nation. Carnegie Corporation is proud to support the City's cultural institutions in order to enhance the curriculum of our public as well as private and parochial schools with the riches these museums, libraries, and centers possess. It speaks well of these organizations' leaders that they have developed education programs to help students overcome deficiencies in the arts and sciences that our schools can't provide due to financial factors.
Today's Philanthropy News Digest is reporting that as Africa "struggles to address the effects of climate change and an unprecedented youth bulge, the Rockefeller Foundation is working across multiple fronts to build the resilience of African economies."
Attributing the report to the Voice of America, the Digest reports that current efforts includes the $100 million Digital Jobs Africa initiative, which was launched in 2013 with the aim of boosting the information and communications technology (ICT) sector in six African countries -- Ghana, Kenya, South Africa, Nigeria, Morocco, and Egypt. Foundation president, Judith Rodin, told the VOA:
We are excited to see so much opportunity and such a growth market in the ICT sector more broadly across the continent. [There are] so many technology parks growing [and] so many companies really growing on technology-based platforms. We know that ... the continent has to focus on employing this extraordinary youth bulge that we are going to see. We think ... a critical part of shared prosperity as we go forward [means] developing growth in the ICT sector which often yields some of the better paying jobs.
Elsewhere on the continent, the foundation is working to help small farmers adapt to climate change by collaborating with local partners to capture run-off from flooding for use in irrigating fields. It is also working in partnership with the World Food Programme and has bankrolled a technology called risk metrics that can help predict an impending drought. As a final matter, the foundation is also -- again in conjunction with the World Food Programme -- creating a country-level insurance mechanism that enables countries to access resources in the immediate aftermath of a natural disaster rather than having to wait for international development assistance to arrive.
Wednesday, May 6, 2015
The Washington Post is reporting that just as business, political, and philanthropic leaders gathered in Marrakesh, Morocco, for the first Clinton Global Initiative meeting on Africa and the Middle East, Chelsea Clinton, the former President's daughter, said there is a "political dimension" to the controversy over multimillion-dollar gifts from foreign governments and corporations to her family's foundation.
Ms. Clinton, the Clinton Foundation's vice chair, said the scrutiny has intensified with the launch of her mother Hillary Clinton's White House run. She dismissed the idea, raised by some Republicans and campaign watchdog groups, that foundation donors seek to curry favor with her powerful parents.
I was wondering what all the traffic gridlock was about when I got out of LaGuardia airport early Monday afternoon and tried to make my way to Poughkeepsie. fearing the worst, I tuned in to 1010 WINS to catch the traffic report. That was when I heard it: President Obama had been at Lehman College where he had announced the creation of a nonprofit called the My Brother's Keeper Alliance. The new organization is a spinoff of a White House initiative of the same name aimed at uplifting African American and Hispanic boys from preschool through high school.
In launching the new Charity, President Obama stated that the My Brother’s Keeper Alliance will "continue the work of opening doors for young people -- all our young people -- long after I've left office."
Reporting on the launch, TheNonProfitTimes reports that the President
told the audience at Lehman that the new organization has secured $80 million from companies such as Deloitte, News Corp and American Express. The group's star-studded executive team and advisor board will include former Secretary of State Gen. Colin Powell, Sen. Cory Booker (D-N.J.), basketball stars Alonzo Mourning and Shaquille O'Neal, and former Attorney General Eric Holder, among others.
The new organization will be led by former Deloitte CEO Joe Echevarria and might serve as a vehicle through which the president can influence policy after his second term is up. Speaking to reporters, White House Press Secretary Josh Ernest stated:
While I'm not in a position to describe the specific, detailed relationship between the president and this alliance that will continue after his presidency, I can tell you that this is an issue that the president intends to continue to be focused on long after he has left the Oval Office.
Meanwhile, Broderick Johnson, chair of the White House initiative, linked the My Brother's Keeper with the unrest in Baltimore following the death of Freddie Gray. Writing on the My Brother's Keeper initiative's website, Johnson stated:
For so many of us, the My Brother's Keeper initiative is deeply personal. As a proud son of Baltimore, this week's announcement comes at a time of unique and special resonance for me. As the country reflects on our shared responsibility to ensure that opportunity reaches every young person, I urge everyone to look at their own capacity to make a difference.
The My Brother's Keeper initiative was designed to focus federal resources towards closing the opportunity gap experienced by African American and Latino males. To that end, Johnson identified almost $1 million in funds from a number of federal agencies: the departments of Education and Health and Human Services announced $750 million in Preschool Development Grants for 18 states this past December, and the Department of Labor and the National Guard have programs that will together expend $100 million to improve career prospects for minorities.
Tuesday, March 31, 2015
Earlier this month, the blog featured a piece on for-profit college conversions. Citing a recent New York Times article, the post noted that several for-profit colleges have decided to become nonprofits to escape certain governmental regulations and bad publicity. Interestingly, a third option is becoming apparent for colleges as reported in Inside Higher Education: becoming a benefit corporation. As you may know, a benefit corporation exists in the space between the for-profit and nonprofit sectors and focuses on achieving a double bottom line: profit and social impact. The first regionally accredited college to take the route of benefit corporation status is Alliant International University in California. Alliant was previously a California nonprofit accredited by the Western Association of Schools and Colleges (“WASC”). Last summer, WASC approved Alliant’s change of status. It is anticipated that other nonprofit institutions will follow suit due to the desire to participate in a new system of health sciences institutions known as Arist Education System. Arist Education System is headed up by University Ventures Fund and supported financially by Bertelsmann, the German media giant. Its purpose is to train health professionals who can work in collaborative teams, which is a new focus of a significant number of hospitals and health systems. It is envisioned that this goal will be accomplished through a focus on student outcomes, and Arist is convinced that such focus will be achieved if the social mission of universities is protected.
The benefit of the change to Alliant is that it may now solicit much needed private funding while still maintaining a public commitment to its mission and public purpose. As a California public benefit corporation, Alliant is required to remain accountable not only to board members and in terms of profit but also to the larger society and in terms of social good. In contrast to for-profit colleges that are changing to nonprofits, Alliance will actually face more regulation as a result of its change in status. As Alliant President Geoffrey Cox noted, by becoming a benefit corporation rather than a for-profit, colleges can preserve their unique missions and attract investors who are looking to leave their funds with them for the long-haul. Finally, I would add that benefit corporation status will keep accountability and transparency in the equation of measuring the performance of colleges in terms of both bottom lines.