Sunday, June 2, 2013
Roger Colinvaux (Catholic) has posted Rationale and Changing the Charitable Deduction, 138 Tax Notes 1453 (2013). Here is the abstract:
There are two principal rationales for the charitable deduction. Depending upon choice of rationale, some tax reform changes are suggested and others are not. A base measurement rationale suggests eliminating the deduction for unrealized appreciation, keeping the benefit as a deduction and not a credit, not adopting caps or a nonitemizer deduction, and protecting the tax base by narrowing the class of organizations eligible to receive deductible contributions. A subsidy rationale, depending upon which strand is emphasized, might favor a more equitable tax benefit in the form of a credit or through caps or a nonitemizer deduction, and could lead to preferring some organizations over others. Both rationales are consistent with placing a floor under the deduction, and narrowing its scope. Present law presents a confusing mix of policies and priorities. Tax reform presents an opportunity to reconsider the role of the charitable deduction in the tax system and to act accordingly.
Monday, April 8, 2013
Lindsey D. Blanchard (University of St. Thomas (Minnesota)) has posted Charitable Nonprofits' Use of Nonpcompetition Agreements: Having the Best of Both Worlds. Here is the abstract:
years, individuals have been challenging the noncompetition agreements
they entered into with their employers on the basis that the agreements
violate public policy. However, in a competitive marketplace, courts
and legislatures in many jurisdictions are reluctant to invalidate
otherwise reasonable noncompetition agreements. Perhaps they are right,
at least when it comes to the general class of nonprofits and to
nonprofits that are protecting their interests against for-profit
entities. As for charitable — or § 501(c)(3) — nonprofits that are
attempting to protect their interests against other charitable
nonprofits, however, the decision-making bodies should reconsider their
Unlike traditional for-profit entities, whose main goal is profit maximization, charitable nonprofits are organized and operated to benefit some greater good. As a result, charitable nonprofits receive donations from individuals and corporations, as well as tax breaks from the government, which are unavailable to for-profit entities. At the same time, charitable nonprofits use many of the same tools that for-profit firms utilize to maximize profits, including noncompetition agreements. Thus, charitable nonprofits are able to benefit from an anti-competition, profit-maximizing tool while also reaping the rewards of their tax-exempt status. In short, charitable nonprofits (wrongly) enjoy the best of both the for-profit and nonprofit worlds.
This article discusses the unique nature of the charitable nonprofit’s mission and the tax benefits conferred on charitable nonprofits by the federal and state governments. It then discusses noncompetition agreements and demonstrates that charitable nonprofits’ use of noncompetition agreements is contrary to their mission and tax-exempt status, as well as to the public interest. Finally, the article proposes an amendment to the federal tax code that would render unenforceable any language in a noncompetition agreement that prevents an individual from leaving the employment of one charitable nonprofit for employment at another.
Alicia Plerhoples (Georgetown) has posted Representing Social Enterprise, Teaching (Sustainable) Corporate Governance on SSRN. Here is the abstract:
Careful consideration and selection of clients facilitate the pedagogical objectives of a clinical law program or other experiential learning course. This article explores the selection of social enterprises - i.e., nonprofit and for-profit organizations whose managers strategically and purposefully work to create social, environmental, and economic value or achieve a social good through the use of business techniques - as clients of two experiential learning courses at Georgetown University Law Center. Representation of social enterprises helps create a dynamic curriculum through which law students learn to merge legal theory and practice. Through service to social enterprises, law students learn about corporate governance and corporate legal theory as well as business models and mechanisms that support social and environmental value creation at a time when the corporate sector is increasingly concerned with sustainability issues; and engage in solving novel and unstructured problems, advocacy work, knowledge creation, and information facilitation to assist the developing social enterprise sector. Legal issues unique to social enterprises compel students to learn corporate governance and corporate practice methods in a manner not typically available to the non-experiential classroom.
- Femida Handy, Jeffrey L. Brudney, and Lucas C.P.M. Meijs, From the Editors’ Desk
Symposium: National Campaigns for Charitable Causes (Guest Editors Marco H. D. van Leeuwen and Pamala Wiepking)
- Marco H. D. van Leeuwen and Pamala Wiepking, National Campaigns for Charitable Causes: A Literature Review
Christopher J. Einolf, Deborah M. Philbrick,and Kelly Slay, National Giving Campaigns in the United States: Entertainment, Empathy, and the National Peer Group
Pamala Wiepking and Marco H.D. van Leeuwen, Picturing Generosity: Explaining the Success of National Campaigns in the Netherlands
Johan Vamstad and Johan von Essen, Charitable Giving in a Universal Welfare State—Charity and Social Rights in Sweden
Marta Rey-García, Luis Ignacio Álvarez-González, and Ricard Valls-Riera, The Evolution of National Fundraising Campaigns in Spain: Nonprofit Organizations Between the State and Emerging Civil Society
- George E. Mitchell, The Construct of Organizational Effectiveness: Perspectives From Leaders of International Nonprofits in the United States
- Shannon Gleeson and Irene Bloemraad, Assessing the Scope of Immigrant Organizations: Official Undercounts and Actual Underrepresentation
- Melissa Torgerson and Mark Evan Edwards, Demographic Determinants of Perceived Barriers to Community Involvement: Examining Rural/Urban Differences
Grace L. Chikoto, Abdul-Akeem Sadiq, and Erin Fordyce, Disaster Mitigation and Preparedness: Comparison of Nonprofit, Public, and Private Organizations
Suzann Lupton, Book Review: Understanding the Roots of Voluntary Action: Historical Perspectives on Current Social Policy
A. Joseph Borrell, Book Review: Shift & Reset: Strategies for Addressing Serious Issues in a Connected Society and The Future of Nonprofits: Innovate and Thrive in the Digital Age
Putnam Barber, Book Review: The Neighborhood Project: Using Evolution to Improve My City, One Block at a Time
- Kirsten A. Gronbjerg, Book Review: Reinventing Civil Society: The Emerging Role of Faith-Based Organizations
Wednesday, April 3, 2013
Following up on last week's post regarding documenting charitable contributions, I should note that Ellen Aprill (Loyola-LA) recently posted on SSRN Reforming the Charitable Contribution Substantiation Rules, forthcoming Florida Tax Review. As well as discussing the substantiation rules, the articles explains that the federal government, in enacting the rule of contemporaneous acknowledgement, apparently feared that taxpayers were deducting amounts that were not in fact charitable contributions, such as scrip or school tuition. The JCT therefore scored the contemporaneous acknowledgment provision as raising $469 million between 1994 and 1998. Here is the abstract:
In May 2012, the Tax Court issued two decisions denying income tax deductions for gifts to charitable organizations because they failed to meet the requirements for a qualified appraisal. These cases lit a firestorm of outrage in various circles, raising questions of how strictly substation rules should be applied. This article begins by reviewing two reasons why the charitable contribution substantiation rules applicable to the income tax merit consideration. First, the charitable contribution deduction is important for both its size and its distribution, and the substantiation rules work to safeguard its integrity. Second, in the case of the charitable contribution, unlike many other income tax provisions, the Treasury and the Internal Revenue Service cannot look to third parties with self-interested incentives that help ensure compliance. The substantiation rules substitute for third party corroboration. Part II of the paper sets out, as briefly as possible, the complicated regime regarding the substantiation of charitable contributions, including the legislative history and applicable regulations. Part III examines applicable case law. Review of legislation, regulations, and case law suggests strongly that we make an effort to reform the current scheme, and Part IV presents a number of possible reforms. These suggestions include inflation adjustments, regulatory changes, and making greater use of technology, with the government working with providers of computer software and those involved in texting of charitable donation. Finding approaches that appropriately balance the need to control overvaluation with the need to encourage legitimate charitable contributions is a difficult but important challenge.
Saturday, February 16, 2013
Alicia Plerhoples (Georgetown) has posted on SSRN the Social Innovation Resource Guide. Here is the abstract:
This Social Innovation Resource Guide is a work-in-progress that attempts to capture various resources that assist, advise, and document social innovation. Social innovation -- defined as "a novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals" -- is drawing widespread academic interest. This Resource Guide began as an instrument for law students enrolled in the Social Enterprise & Nonprofit Law Clinic at Georgetown University Law Center. In it you will find foundations that support social innovation, organizations that are creating metrics to measure social innovation, attorneys who counsel social innovators, centers and incubators that grow social enterprises, and much more. This Resource Guide is meant to be collaborative and dynamic, and useful to all.
- Femida Handy, Jeffrey L. Brudney, and Lucas C.P.M. Meijs, From the Editors’ Desk
Ram A. Cnaan and Daniel W. Curtis, Religious Congregations as Voluntary Associations: An Overview
Chao Guo, Natalie J. Webb, Rikki Abzug, and Laura R. A. Peck, Religious Affiliation, Religious Attendance, and Participation in Social Change Organizations
- Sara Kinsbergen, Jochem Tolsma, and Stijn Ruiter, Bringing the Beneficiary Closer: Explanations for Volunteering Time in Dutch Private Development Initiatives
- Janelle A. Kerlin, Defining Social Enterprise Across Different Contexts: A Conceptual Framework Based on Institutional Factors
- Vladislav Valentinov and Constantine Iliopoulos, Economic Theories of Nonprofits and Agricultural Cooperatives Compared: New Perspectives for Nonprofit Scholars
- Hiromi Taniguchi, The Influence of Generalized Trust on Volunteering in Japan
- Isabella M. Nolte and Silke Boenigk, A Study of Ad Hoc Network Performance in Disaster Response
- Ellen Quintelier, Socialization or Self-Selection? Membership in Deliberative Associations and Political Attitudes
Dyana P. Mason, Putting Charity to the Test: A Case for Field Experiments on Giving Time and Money in the Nonprofit Sector
Judy Freiwirth, Book Review: Joining a Nonprofit Board: What You Need to Know
Tuesday, February 12, 2013
Nicholas Mirkay, III has recently published what promises to be an interesting read in the North Carolina Law Review regarding the extent to which domestic tax exempt organizations must or should operate consistently with U.S. Foreign policy. The answer seems rather obvious to me. Which is not to say the question is not worth asking. I think exempt organizations have no more obligation to support foreign policy, even "clearly defined foreign policy," whatever that may be, than they do domestic policy. I distinguish legal from illegal acts, of course. My interest is piqued, though, because from the sounds of his abstract below, Mirkay seems to think U.S. exempt organizations are beholding, at least to some extent, to U.S. official foreign policy. Maybe he only means to say that U.S. exempt organizations may not violate law in their international dealings. Somehow, though, I think he means more than that. But what if the United States has a "we don't recognize the legal authority of country X to imprison a U.S. citizen" policy. Or "we don't negotiate with terrorists" policy. In either case, does that preclude a domestic nonprofit from funding a famous ex-politician's trip to that country in an attempt to win the release of the poor victim. It's not called the "independent Sector" for nothing. It's just my opinion, but even tax subsidized organizations ought not to be confined to the political mainstream in their dealings outside the country. The whole purpose of the Independent Sector, it seems to me, is to offer alternatives to orthodoxy, whether in business or government. Too often, perfectly innocent groups that happen to support the collateral victims of unpopular causes find themselves portrayed as a protagonist, one way or the other, and then dragged into whatever conflict is raging around those victims. And inevitably, it seems, the farther an exempt group strays from the proverbial "party line" the more likely it is to be accused of being "un-American" or have its tax exemption challenged. From the abstract below, I gather Professor Mirkay might differ with me to some extent. And I acknowledge a nagging concern in my own intuitive response. If exempt organizations need not adhere to or support clearly defined foreign policy, why should they be required to support clearly defined domestic public policy? Somehow I think there is a qualitative difference in domestic and foreign policy that would justify my differing approaches. I know Mirkay to be a very thoughtful scholar by the way so this is a purely and intentionally provocative, admittedly speculative (since I have not read the article yet) theoretical comment not a "dissing" of his very useful scholarship. I will certainly enjoy reading the article, I'm sure. In the meantime, here is the abstract to Globalism, Public Policy, and Tax Exempt Status: Are U.S. Charities Adrift at Sea?
This article wrestles with whether charitable organizations’ international activities can or should impact such organizations’ domestic tax exemption. It addresses the issues raised by such international activities — if those activities contravene current U.S. foreign policy or international law is a charity’s tax-exempt status adversely affected? Does such contravention implicate the public policy doctrine? On one hand, this article agrees with other legal scholars that the public policy doctrine needs congressional attention, including some codification of the doctrine to provide legislative boundaries and ensure against arbitrary and capricious application by the Internal Revenue Service (“IRS”). On the other hand, this article contends that the automatic inclusion of U.S. foreign policy and international law as components of “established public policy” would be administratively impracticable and onerous and would result in significant compliance difficulties for charitable organizations. Considering all these challenges, this article nevertheless proposes that some codification of the public policy doctrine accompanied by a listed transaction scheme, similar to those employed in other areas of the Internal Revenue Code (“Code”), could provide Congress and ultimately the IRS with the ability to target certain international activities as inherently in conflict with tax-exempt status. In addition, this article proposes that the codification of the public policy doctrine should include an excise tax regime, as an alternative to revocation, to address isolated or small violations of the public policy doctrine in relation to a charitable organization’s overall tax-exempt activities. Although these proposals are not without pitfalls and criticisms, they will nevertheless provide practical guidance to charitable organizations, thereby aiding compliance and ensuring uniform treatment of charitable organizations with international activities or operations.
Thursday, January 17, 2013
Dayton L. Hall (Washburn, 2013 JD Candidate) has posted Payments in Lieu of Taxes: Congress's Flawed Solution to the Burden of Federal Land Ownership on Counties to SSRN. Here is the abstract:
The federal government makes Payments in Lieu of Taxes (“PILT”) to local governments to help ease the tax burden of federal ownership of land. Because federally owned land is nontaxable, PILT payments are intended to compensate local governments for losses in property taxes due to federal ownership of land within local governments’ boundaries. This Article explains the history and application of the PILT program, analyzes the equity and efficiency of the legislation, concludes that certain aspects of the PILT Act are both inequitable and inefficient, and proposes appropriate revisions. Specifically, this Article concludes and proposes the following: (1) shifting to a tax equivalency payment system based on states’ property valuation laws would be too complicated and inefficient, despite the benefit that such a program might provide more consistent, foreseeable payments to local governments; (2) PILT payments unjustifiably discriminate against less populated counties that contain substantial federal acreage, so the PILT calculation method should be revised to remedy this discrimination; (3) PILT distribution methods creates an inefficient incentive for states to form alternative political subdivisions to maximize payments, so this incentive should be eliminated; and (4) Congress must find a long-term funding solution so that local governments can rely on PILT payments in their long-term planning endeavors.
Monday, January 14, 2013
Jessica Owley (SUNY-Buffalo) has posted The Future of the Past: Historic Preservation Easements (Zoning Law & Practice Report, Nov. 2012) to SSRN. Here is the abstract:
This brief article summarizes recent case law related to historic preservation easements. As historic preservation easements and other conservation easements age, the number of legal disputes involving them has grown. Challenges to historic conservation easements generally arise in the tax court because many of them are donations. The IRS is taking a close looks at conservation easements generally, appearing to focus particularly on façade easements.
Most states (and the IRS) require historic preservation easements to be perpetual. Courts are beginning to scrutinize what perpetuity means and are looking closely at easement language regarding mortgage subordination, condemnation, and extinguishment. This move by the IRS should indicate to landowners, land trusts, and funders that historic preservation easements should be carefully written to comply with all state and federal regulations with an eye to ensuring their long-term viability. Additionally, the IRS and courts have been particularly concerned with the accuracy of appraisals, which reach millions of dollars. Appraisals need to delineate their method and basis for calculation. The IRS’ scrutiny, however, has been tougher than the courts’. While the Tax Court has often sided with the IRS (on issues of perpetuity, particularly), the circuit courts seem to err in favor of upholding conservation easements and allowing deductions.
Brian D. Galle (Boston College) and David I. Walker (Boston University) have posted Does Stakeholder Outrage Constrain Executive Compensaton: Evidence from University President Pay to SSRN. Here is the abstract:
We analyze the determinants of the compensation of private college and university presidents from 1999 through 2007. We find that the fraction of institutional revenue derived from current donations is negatively associated with compensation and that presidents of religiously-affiliated institutions receive lower levels of compensation. Looking at the determinants of contributions, we find a negative association between presidential pay and subsequent donations. We interpret these results as consistent with the hypotheses that donors to nonprofits are sensitive to executive pay and that stakeholder outrage plays a role in constraining that pay. We discuss the implications of these findings for the regulation of nonprofits and for our broader understanding of the pay-setting process at for-profit as well as nonprofit organizations.
Reid K. Weisbord (Rutgers-Newark) has posted Charitable Insolvency and Corporate Governance in Bankruptcy Reorganization to SSRN. Here is the abstract:
Poor corporate governance is pervasive in the charitable nonprofit sector and, in numerous cases, mismanagement and abuse have led to the financial distress or failure of charitable nonprofit firms. The rich literature on nonprofit law has considered the need for better corporate governance and enforcement of fiduciary duties, but the scholarship has yet to address the implications of financial distress and insolvency on corporate governance. This Article fills that void and argues that, when a charity encounters financial distress and approaches the point of insolvency, features of nonprofit and bankruptcy law tend to exacerbate rather than ameliorate the corporate governance problem. In particular, charitable insiders who breach their fiduciary duties are in a better position to entrench themselves and avoid termination than their for-profit counterparts. In the for-profit sector, three constraints tend to regulate corporate governance by helping oust fiduciaries responsible for financial distress: (1) bank monitoring of commercial loan covenants; (2) absolute priority and the transfer of ownership in bankruptcy; and (3) involuntary bankruptcy proceedings. In the nonprofit sector, however, those constraints are either less effective or do not apply. As a result, blameworthy charitable fiduciaries are better able to entrench themselves and, absent new leadership, financially distressed charities are less likely to achieve a full and sustainable financial recovery. This Article suggests that the law might better protect the public interest in charitable assets from waste and abuse by presumptively appointing bankruptcy examiners in all Chapter 11 reorganization proceedings involving substantial charitable assets. Once appointed, bankruptcy examiners would be tasked with identifying the cause of insolvency and individuals responsible for the charity’s financial distress.
Robert Wolf (Wisconsin-La Crosse, Finance Dept.) has posted Religious Giving as a Guide to the Principles of Good Taxation (Journal of Accounting, Ethics, and Public Policy, 2012) to SSRN. Here is the abstract:
The principles of good taxation are a set of guiding values necessary for any responsible state to consider in constructing their tax policy. The principles are derived from various philosophical and economic discussions including but not limited to the role of the state, ownership of natural resources, the optimal size of the state, the emphasis on individual versus community rights, and what is reasonable. Adam Smith (1776) initiated the discussion on the principles of good taxation including equality, certainty, convenience and economy. Others have expanded and articulated the principles to include reasonable and neutral. Curran (2001), Hamill (2006), and others have considered the principles of good taxation from a religious viewpoint. Along different lines, Croteau (2005) develops the principles of giving for a religious institution. As religious institutions rely on giving in a similar manner that states rely on taxes, it is useful to review the principles of good taxation in comparison to the principles of giving. This research finds strong consistency between the principles of good taxation and the principles of giving. Additionally, the principles of giving make a strong argument for elevating the importance of effective allocation of tax revenues as a principle of tax collections.
Our contributing editor, Nancy A. McLaughlin (Utah), has posted Extinguishing and Amending Tax-Deductible Conservation Easements: Protecting the Federal Investment after Carpenter, Simmons, and Kaufman (Florida Tax Review, 2012) to SSRN. Here is the abstract:
Taxpayers are investing billions of dollars in conservation easements intended to permanently protect unique or otherwise significant land areas or structures through the federal charitable income tax deduction available to easement donors under Internal Revenue Code § 170(h). Astounding amounts of governmental and judicial resources are also being expended to ensure that the easements are not overvalued, that they satisfy elaborate conservation purposes and other threshold requirements, and that the donations are properly substantiated. This enormous up-front investment will be for naught, however, if the purportedly permanent protections prove to be ephemeral because government and nonprofit holders are able to release, sell, swap, or otherwise extinguish the easements in disregard of the restriction on transfer, extinguishment, division of proceeds, and other perpetuity-related requirements in § 170(h) and the Treasury Regulations. The Tax Court’s holding in Carpenter v. Commissioner was an important victory for the IRS and the public because it provides some key guidance regarding compliance with § 170(h)’s perpetuity-related requirements. However, Carpenter has also engendered some confusion and speculation, and recent Circuit Court decisions have compounded the problem by undermining the IRS’s efforts to enforce the perpetuity-related requirements. This article examines these cases against the backdrop of the legislative history of § 170(h), state law, and public policy. It concludes that clear federal rules regarding the transfer, amendment, and extinguishment of tax-deductible conservation easements are needed because, without such rules, the purportedly perpetual protections will erode over time and the enormous public investment in the easements and the conservation values they are intended to protect for the benefit of future generations will be lost.
The raison d’être for the low-profit limited liability company (“L3C”) is to encourage program-related investments (“PRIs”) by private foundations. PRIs are special types of investments that can be both charitable and profitable. PRIs have been embraced by knowledgeable scholars, practitioners, foundation managers, and even the U.S. Treasury Department. Further, the L3C and PRIs are associated with the growing “social enterprise” movement. The L3C thus would seem to be in the right place at the right time and should have the full support of the charitable sector, practitioners, and lawmakers.
Yet, after a fast start, adoption of L3C legislation across the U.S. has stalled. In fact, several states recently have considered L3C legislation and have either rejected it outright or deferred its passage indefinitely. Many highly-regarded scholars and practitioners adamantly oppose the L3C, even though those scholars and practitioners generally endorse PRIs. This slow pattern of adoption and strong opposition to the L3C contrasts sharply with the rapidly increasing acceptance of another type of “social enterprise” entity, the benefit corporation.
Why is L3C legislation languishing? Because the L3C suffers from the following fundamental defects: (i) except in name, the L3C is indistinguishable from a regular LLC; (ii) without any type of statutory enforcement mechanism, the L3C lacks accountability and transparency; and (ii) because the L3C promises more than it can deliver absent new federal legislation, the L3C fails of its essential purpose of encouraging PRIs. Given these defects, the L3C’s opponents maintain that the L3C is a well-intentioned but nonetheless failed experiment that should be abandoned.
This article argues that even though the L3C in its current form is defective, the L3C should not be abandoned. Instead, the L3C can be a viable tool for tax-exempt organizations and PRIs if the current statutory framework is strengthened and improved. With the foregoing premise in mind, this article proposes seven relatively simple but impactful changes that would strengthen and improve the L3C statutory framework. If the L3C becomes more than just a brand, then perhaps the L3C can fulfill its raison d’être.
Saturday, December 29, 2012
Steven H. Sholk has released the most recent update of his A Guide to Election Year Activities of Section 501(c)(3) Organizations. Weighing in at 271 pages, it provides a comprehensive overview of this complicated and fact-sensitive area.
Hat tip: Tax Prof Blog.
Friday, December 28, 2012
Alison Dunn (Newcastle) has posted Using the Wrong Policy Tools: Education, Charity, and Public Benefit, 39 J. L. & Soc'y 491 on SSRN. Here is the abstract:
A recent decision on the application of public benefit under the Charities Act 2006 sidestepped the political debate surrounding the charitable status of independent fee‐charging schools. The broader political context nevertheless underscores the legislative reforms, and this article questions whether the new statutory public benefit requirement has utility as a welfare policy tool in the field of education. It examines the public benefit requirement in charity law against the backdrop of government policy towards education and the broader political agenda for a mixed economy of welfare provision, and argues that the difficulties Labour faced in developing its education policies were replicated in the application of the post‐Act public benefit requirement to fee‐charging schools. As a result, achieving broader policy goals for widening educational opportunity through public benefit was almost impossible given the regulatory framework and the principles upon which charity law is founded.
The nonprofit starvation cycle is a debilitating trend of under-investment in organizational infrastructure that is fed by potentially misleading financial reporting and donor expectations of increasingly low overhead expenses. Since its original reporting in 2008, the phenomenon has been referenced several times, but seldom explored empirically; this study utilizes twenty-five years of nonprofit data to examine the existence, duration, and mechanics behind the nonprofit starvation cycle. Our results show a definite downward trend in overhead costs, reflecting a deep cut in administrative expenses partially offset by an increasing in fundraising expenses. The organization’s size is instrumental to its behavior, with a sharp rise in overhead occurring when revenues equal $100 thousand, but diminishing at $550 thousand. Finally, the brunt of the cuts have fallen on non-executive staff wages and professional fees, which heighten the concern of ill effects from a fixation on overhead cost reduction.
Over the past few years, jurisdictions across the country have enacted specialized organizational forms to house social enterprises. Social enterprises are entities dedicated to a blended mission of earning profits for owners and promoting social good. They are neither typical businesses, concentrated on the bottom line of profit, nor traditional charities, geared toward achieving some mission of good for society. Their founders instead see value in blending both goals. This article examines the latest specialized form to take shape: the flexible purpose corporation (FPC). After explaining the genesis of FPC enabling legislation, the article critiques its major provisions and compares them with relevant aspects of other specialized forms for social enterprise.
Ann Taylor Schwing has posted Perpetuity is Forever, Almost Always: Why it is Wrong to Promote Amendment and Termination of Perpetual Conservation Easements, 37 Harv. Env. L. Rev. (forthcoming), on SSRN. Here is the abstract:
This article is a response to Jessica Jay's, When Perpetual Is Not Forever: The Challenge of Changing Conditions, Amendment and Termination of Conservation Easements, 36 Harv. Envtl. L. Rev. 1 (2012). When Perpetual Is Not Forever suggests that government entities and land trusts accepting conservation easement donations are free to ignore both federal tax law requirements and the rules that govern administration of charities and the charitable gifts they solicit and accept when amending and terminating perpetual conservation easements. This article explains that, when a conservation easement donor makes a charitable gift of a conservation easement and elects to seek a federal income tax deduction, both the property owner and easement holder become subject to federal law governing the creation, monitoring, amendment, and extinguishment of the easement, as well as state laws that protect charitable gifts on behalf of the public. Accordingly, contrary to the representations made in When Perpetual Is Not Forever, neither property owners nor holders can elect to amend or terminate such perpetual easements pursuant to procedures that are inconsistent with such laws.