Wednesday, September 24, 2014
March of the Benefit Corporation: So Why Bother? Isn’t the Business Judgment Rule Alive and Well? (Part III)
(Note: This is a cross-posted multiple part series from WVU Law Prof. Josh Fershee from the Business Law Prof Blog and Prof. Elaine Waterhouse Wilson from the Nonprofit Law Prof Blog, who combined forces to evaluate benefit corporations from both the nonprofit and the for-profit sides. The previous installments can be found here and here (NLPB) and here and here (BLPB).)
In prior posts we talked about what a benefit corporation is and is not. In this post, we’ll cover whether the benefit corporation is really necessary at all.
Under the Delaware General Corporation Code § 101(b), “[a] corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes . . . .” Certainly there is nothing there that indicates a company must maximize profits or take risks or “monetize” anything. (Delaware law warrants inclusion in any discussion of corporate law because the state's law is so influential, even where it is not binding.)
Back in 2010, Josh Fershee wrote a post questioning the need for such legislation shortly after Maryland passed the first benefit corporation legislation:
I am not sure what think about this benefit corporation legislation. I can understand how expressly stating such public benefits goals might have value and provide both guidance and cover for a board of directors. However, I am skeptical it was necessary.
Not to overstate its binding effects today, but we learned from Dodge v. Ford that if you have a traditional corporation, formed under a traditional certificate of incorporation and bylaws, you are restricted in your ability to “share the wealth” with the general public for purposes of “philanthropic and altruistic” goals. But that doesn't mean current law doesn't permit such actions in any situation, does it?
The idea that a corporation could choose to adopt any of a wide range of corporate philosophies is supported by multiple concepts, such as director primacy in carrying out shareholder wealth maximization, the business judgment rule, and the mandate that directors be the ones to lead the entity. Is it not reasonable for a group of directors to determine that the best way to create a long-term and profitable business is to build customer loyalty to the company via reasonable prices, high wages to employees, generous giving to charity, and thoughtful environmental stewardship? Suppose that directors even stated in their certificate that the board of directors, in carrying out their duties, must consider the corporate purpose as part of exercising their business judgment.
Please click below to read more.
Tuesday, August 26, 2014
The Oregonian reports that lawyers have filed a class-action lawsuit in state court against Regence BlueCross BlueShield, claiming that the (taxable) nonprofit is acting like a for-profit company. More specifically, the lawsuit asserts that Regence is accumulating excess funds to support large, executive salaries instead of using those funds to benefit its members. The lawsuit points specifically to a public-purpose clause in Regence's bylaws that it claims is violated by these practices. The article further reports that Regence has responded by stating that the claim is without merit and that it intends to aggressively defend itself against the allegations.
Tuesday, August 19, 2014
The Washington Post reports that D.C. Superior Court Judge Robert Okun has approved the proposal of the Trustees of the Corcoran Gallery of Art to transfer its college to George Washington University and the bulk of its art collection to the National Gallery of Art. The Corcoran Gallery is reported to be the oldest private art museum in the nation’s capital. The proposal was the focus of a cy pres proceeding, necessitated because of the severe financial difficulties facing the nonprofit.
As discussed in Judge Okun’s opinion granting the trustee’s petition, the trustees of the Corcoran Gallery argued that continuing its operations as a stand-alone charity was impossible or impracticable. Borrowing from contracts law, the court agreed that the continued operation of the gallery by itself was "impracticable." Of special interest is the Court’s interpretation of “impracticability” under the doctrine of cy pres:
The Court’s review of the cases discussed above leads to the conclusion that a party fails to establish impracticability in the cy pres context if it merely demonstrates that it would be inconvenient or difficult for the party to carry out the current terms and conditions of the trust. Rather, a party seeking cy pres relief can establish impracticability only if it demonstrates that it would be unreasonably difficult, and that it is not viable or feasible, to carry out the current terms and conditions of the trust.
For those interested in a brief history of major events surrounding the formation and operation of the Corcoran Gallery, see A Corcoran Gallery of Art Timeline, also published in the Washington Post.
Wednesday, July 2, 2014
We previously blogged (here and here) about the lawsuit Princeton, New Jersey residents filed in 2013 against Princeton University, arguing that the University no longer qualified for exemption from property taxes because of its hundreds of millions of dollars in revenues from royalties and commercial ventures. We missed, however, the latest major development in this dispute, which was reported by Bloomberg. In late April of this year, the University announced that it had entered into an agreement with the town to pay more than $24 million, mostly in unrestricted payments, to the town on a voluntary, one-time basis over the next seven years. The amount is a significant increase over the amounts Princeton had been paying the town voluntarily.
The agreements appears designed to undermine the pending lawsuit, and it apparently surprised the residents who brought the claim and their attorney based on comments in the Bloomberg article. I am not familiar enough with the lawsuit, the agreement, or New Jersey law to know if the agreement effecctively moots the lawsuit or otherwise provides grounds for a motion to dismiss by the Unviersity, but I assume that the University's lawyers will eventually argue something along these lines.
Friday, May 30, 2014
Johnny Rex Buckles (Houston) published "How Deep Are the Springs of Obedience Norms that Bind the Overseers of Charities?," in 62 Cath. U. L. Rev. 913 (2013). Here are some excerpts from the article's introduction:
This Article explores whether and how the exercise of discretion by charity fiduciaries in recasting a charity’s direction is, and should be, limited. Analyzing this basic issue raises additional, difficult inquiries: If the law does limit the ability of charity fiduciaries to determine the charitable paths of their entities, what standards govern the exercise of fiduciary discretion? To what extent does , and should, the law treat fiduciaries of charitable trusts dissimilarly from those who govern charitable nonprofit corporations? What role should governmental actors play in monitoring these decisions by charity managers? If governmental actors should assume some monitoring role, should their review of fiduciary decisions be ex ante or ex post? Which governmental actors should be involved? Can donors and other stakeholders sufficiently protect their interests absent a strong supervisory role by the government?
These questions are not simply esoteric enigmas deisgned to tickle the ears of legal scholars. . . . Moreover, these questions are especially timely, for the law of obedience norms governing fiduciaries of charitable corporations is unsettled and in great need of refinement. Even the law governing trustees of charitable trusts, which is comparatively stable and uniform, merits reassessment once the meaning and purposes of obedience norms are thoroughly examined.
To foster the development of the law governing charity fiduciaries, this Article presents a taxonomy of obedience norms,20 a doctrinal analysis of these norms, and a policy discussion to help answer these questions. Part I explains the fundamental nature of obedience norms and articulates and illustrates the various types of obedience norms. Parts II and III discuss legal authorities supporting or rejecting various obedience norms as applied to trustees of charitable trusts and directors of charitable nonprofit corporations, respectively. Part IV this Article evaluates the policy considerations that may justify one or more obedience norms. Finally, by presenting an analytical series of questions, Part V explains how the law should develop in imposing, and declining to impose, obedience norms on charity fiduciaries.
Wednesday, May 7, 2014
Nonprofits that accept government funding can sometimes unexpectedly find themselves subject to the open meeting laws that apply to public bodies. Capital Area Legal Services Corporation (CALSC), a nonprofit corporation operating in Baton Rouge, Louisiana, faces this issue in litigation brought by a former Executive Director that has already generated two state trial court decisions and one previous state appellate court decision. The latest chapter is Wayne v. Capital Area Legal Services Corporation, 2014 La. App. LEXIS 1148 (May 2, 2014), in which the appellate court concluded that CALSC is not a public body for purposes of the Louisiana Open Meeting Law under a recently revised interpretation of that statute by the Louisiana Supreme Court. The appellate court found that the term "authorities" in the statue is limited to entities created by the government, and so the following facts led it to affirm the grant of summary judgment on this issue in favor of CALSC (footnote omitted):
We find that CALSC is not an "authority" for the purpose of the Open Meetings Law because it is not a creature of government. It is undisputed that CALSC is a private, non-profit corporation that was incorporated in 1958 by the Baton Rouge Bar Association. It is further undisputed that CALSC has never been sponsored by any governmental resolution, nor has it been designated as an agency by any political subdivision.
The decision therefore sets a relatively high bar for parties seeking to assert that a nonprofit corporation would be subject to the Open Meeting Law in Louisiana.
Friday, April 25, 2014
According to an Associated Press report, the New York Attorney General's Office intends to appeal a decision by a New York trial court that the $199,000 salary cap imposed by executives at nonprofit contractors with the Health Department by executive order exceeded the Governor's authority. Further coverage of the court decision in Agencies for Children's Therapy Services v. New York Dept. of Health can be found at the New York Nonoprofit Press. That article notes that another trial court ruled in favor of New York and upheld the salary cap, so the matter will ultimately need to be resolved by a higher court. It also notes that the salary cap also applies to nonprofits that contract with 12 other agencies.
Wednesday, April 23, 2014
Massachusettes AG Sues Former Nonprofit President for Excessive Compensation; President and Board Should Expect Deficiency Notice Soon
In a complaint that should serve (unfortunately) as an excellent teaching prop for those of you teaching the tax law of exempt organizations, the Massachusettes Attorney General accused the former president of Falmouth College of engaging in acts that at the federal level can only be described as violative of the prohibitions against private inurement and excess benefits. Acording to the Boston Globe:
Attorney General Martha Coakley sued the former president of a tiny Falmouth college on Tuesday, seeking to force him to repay the school millions that he allegedly squandered on excessive compensation, Mercedes automobiles, and a quarter-million-dollar timeshare in the Caribbean.In the lawsuit, filed in Suffolk Superior Court, Coakley also charged that President Robert J. Gee gave himself a $152,175 bonus in 2009, and then created false documents to make it appear that the school’s board members held a meeting to award Gee the money for his “superior job performance.’’ No such meeting ever occurred, according to the lawsuit. During Gee’s tenure, the college he headed, the National Graduate School of Quality Management, bought an ocean-view compound with four houses that included a presidential home for Gee. Last year, the school sold those properties at a loss of at least $1.5 million.
As with campaign intervention, private inurement and excess benefit at this level is so obvious as to lack instructional value. The complaint is useful to demonstrate the role of local AG's in regulating nonprofits. And their is also a useful practical lesson. In my experience, one of the enduring truisms of nonprofit governance is that the founder can never, ever, ever be trusted years down the road when his or her zeal for whatever mission provoked the nonprofit's founding has worn off but the nonprofit is still bringing in serious revenue. It is a recipe for disaster and almost always leads to the founder treating the organization as his own private sugar daddy. And the board members, probably all the President's golfing buddies, better get set for the notices that derive from IRC 4958.
Thursday, February 6, 2014
Both the Boston Globe and the Wall Street Journal report that a dispute in Massachusetts over a $172.87 property tax bill could undermine tax exemption for millions of acres held by land trusts nationwide. At immediate stake is the tax status of 120 acres of woodland owned by the New England Forestry Foundation. The bigger issue is whether merely preserving land for public use is sufficiently in the public interest to justify exempting them from property tax under applicable state and local laws, or whether instead some level of actively encouraging public use or otherwise providing public benefit is also required. Both property tax assessors for cash-strapped jurisdictions and nonprofit land trusts are closingly following the case. The Massachusetts Supreme Judicial Court heard arguments last month, and similar cases are working their way through the courts in a number of other states.
Wednesday, February 5, 2014
An Illinois Appellate Court recently affirmed the grant of summary judgment in favor of the Attorney General against Maxwell Manor, a charitable nonprofit corporation that operated a nursing home, and several of its directors and officers. The decision, People v. Manor, 2013 IL App. (1st) 113132-U, provides a case study of failure to comply with state law duties, including not only fiduciary duties but also registration and annual report requirements. The heart of the case was the decision by Executive Director JoeAnn McClandon to cause Maxwell Manor and the family partnership that owned the nursing home's building and land to jointly sell the nursing home to a third party for $13,500,000, followed by not only a failure to report the sale to the Attorney General but also a decision by Ms. McClandon to write a check to herself for $2 million, allegedly in repayment of previous personal loans she had made to Maxwell Manor. The court's opinion details the repeated failures under state law, including not reporting the alleged personal loans to Ms. McClandon on the required annual reports, the failure to report the sale or to file the required annual reports for the years after the sale occurred, and the failure to properly account for the $2 million transferred to Ms. McClandon. Not surprisingly, the court affirmed a $2 million judgment against Ms. McClandon, and also the removal of Ms. McClandon and two directors and officers, the dissolution of Maxwell Manor, and the distribution of the organization's remaining assets pursuant to cy pres.
While such situations are fortunately relatively rare, what is rarer still is having such a detailed account of the relevant facts and circumstances and a definitive court ruling laying out both the legal violations and the sanctions imposed. I think I may have found one of my fact patterns for the next time I teach Not-for-Profit Organizations.
NY Trial Court Orders Property Tax Exemption for Drug Policy Alliance HQ Despite Alleged "Advocacy" Focus
A New York court has granted the Drug Policy Alliance's petition for real estate property tax exemption for its New York City headquarters, rejecting the previous denial by the New York City Department of Finance, which had been affirmed by the New York City Tax Commission. In Drug Policy Alliance v. New York City Tax Comm'n, NY Slip Op 33273 (U), the court rejected the city agencies' argument that the Alliance's alleged primary focus on legislative and policy change disqualified it from exemption as an "exclusively" educational organization. The court noted that the Alliance already enjoyed exempt status under federal (501(c)(3)), state, and city authorities, a fact the Commission failed to mention in its decision, and that similar organizations had been granted exemption under a liberal interpretation of the relevant regulation. Given these conclusions, the court declined to reach the Alliance's constitutional claims that the denial was based on the content of the Alliance's public advocacy, which relates to reducing the harms of both drug use and drug prohibition.
While not a surprising result, this dispute indicates the continuing struggle many otherwise tax-exempt organizations face in convincing local authorities that the term "educational" as generally used in both federal and state law is broad enough to encompass public education and advocacy, including with respect to controversial issues. Kudos to the New York Civil Liberties Union Foundation, the Asian American Legal Defense Fund, and the Lawyers Alliance for New York for supporting the Alliance in this case through amicus briefs.
Wednesday, December 4, 2013
The Tampa Bay Times reports that an Ohio jury has found John Donald Cody guilty of 23 counts of fraud, money laundering and theft relating to his role as head of the U.S. Navy Veterans Association. As previously detailed in this space, the Association was a sham charity that Cody ran under the stolen name of Bobby Thompson and used to raise over $100 million before being exposed in 2010 by the newspaper (then named the St. Petersburg Times). Sentencing is scheduled for mid-December. Prosecutors have already obtained a guilty plea from one other person involved in the scam, who is now serving five years in an Ohio prison, and they have stated they plan to indict the lawyer they alleged also helped.
Thursday, October 17, 2013
The Chronicle of Philanthropy reports that New York’s Court of Appeals, the state’s highest court, heard oral arguments yesterday in a case in which the owner of a New York City hotel, the Carlton House Hotel in Queens, seeks damages from the Salvation Army to the tune of $200 million. The claim reportedly is that the building was damaged when the charity used it as a homeless shelter. According to the story, the property owner, a holding company, has already received $10 million as a lease termination fee from the city, which negotiated the lease. The Salvation Army argues that, under the lease, New York City’s Department of Homeless Services was “the exclusive source of funds” for the property’s use as a shelter. For additional coverage, see this entry posted on The Real Deal.
Thursday, September 19, 2013
My thanks to Evelyn Brody for bringing the South Carolina Supreme Court's decision in Wilson v. Dallas to my attention. The case arose out of a dispute involving the Estate of James Brown, his alleged spouse, and several of his adult children. James Brown provided in his will and an irrevocable trust that the bulk of his estate should go into a newly created charitable trust, but the individuals involved sought to set aside those directions and instead have the estate divided pursuant to the applicable laws of intestate succession. The then South Carolina Attorney General become involved and directed negotiations that ultimately led to a settlement under which approximately half of the estate went to a charitable trust to be governed by an AG-appointed trustee, and the other half would go to the challenging individuals. The court-appointed personal representatives of the estate and trustees of the irrevocable trust challenged the settlement (and their removal in the wake of the circuit court's approval of the settlement).
While there are many interesting aspects of the decision, the most significant is the Supreme Court's criticism of the AG's role in shaping the settlement that the court ultimately found was not just and reasonable. I will let the court's speak for itself:
- "In our view, the evidence does not support the finding that the compromise was just and reasonable. The compromise orchestrated by the AG in this case destroys the estate plan Brown had established in favor of an arrangement overseen virtually exclusively by the AG. The result is to take a large portion of Brown's estate that Brown had designated for charity and to turn over these amounts to the family members and purported family members who were, under the plain terms of Brown's will, given either limited devises or excluded."
- "We find the compromise proposed here is fundamentally flawed because the entire proposal is based on an unprecedented misdirection of the AG's authority in estate cases."
- "The AG undoubtedly has the authority to intervene to protect the public interest of a charitable trust. However, the AG has no authority to become completely entrenched in an action that began here as one to set aside a will and for statutory shares, direct the settlement negotiations, and then fashion a settlement that discards Brown's will and his 2000 Irrevocable Trust and replaces them with new trusts, only to give himself sole authority to select the managing trustee. By so doing, the AG has effectively obtained control over the bulk of Brown's assets and has given his office unprecedented authority to oversee the affairs of the parties that has not heretofor been recognized in our jurisprudence."
- "As the enforcer of charitable trusts, we believe the AG's efforts would have been better served in attempting to make a cursory evaluation of the claims rather than directing a compromise which ultimately resulted in the AG obtaining virtual control over Brown's estate. Based on all the circumstances, we do not believe the effect of the compromise is just and reasonable, and we cannot condone its approval."
- "The settlement provisions allowing the AG to select the trustee, and his continued influence over the trust overreaches his statutory authority, as there is no provision allowing an AG to become involved in the day-to-day operations of a trust. Moreover, the AG's primary job is the enforcement of charitable trusts, and in this case, the compromise dismantles the existing charitable trusts, to great ill effect on Brown's estate plan, rather than enforces it."
The Supreme Court concluded by remanding the case to the circuit court to appoint fiduciaries to implement the original directions provided for in the will and irrevocable trust.
Oregon Tax Court Issues Split Property Tax Exemption Decisions for Substance Abuse Treatment Facilities
On August 30th, the Oregon Tax Court issued two opinions that reached opposite results regarding whether a particular substance abuse treatment facility qualified for exemption from property tax. In each case the key question was whether the facility met the "gift or giving" requirement for exemption under applicable case law.
In Hazelden Foundation v. Yamhill County Assessor, the court concluded the facility did not qualify for exemption. It held that the "gift or giving" requirement incorporated a "doors are open to rich and poor alike" element, and that the Hazelden Foundation failed to satisfy this element. More specifically, the court found that the Foundation limited financial assistance to patients unable to afford the Foundation's normal, relatively high fees and refused to accept payment from Medicare or Medicaid , suggesting "that taxpayer's services are specifically targeted at the more affluent segments of our society."
In contrast, in Serenity Lane Inc. v. Lane County Assessor, the court concluded that the facility did qualify for exemption. While the court found that the record was somewhat mixed on whether Serenity Lane met the gift or giving requirement, the combination of the facility's acceptance of patients on Medicaid, its charging of below market rates for its detox services and certain other services, the offering of scholarships to some financial needy patients, and its internship program led the court to conclude that the facility did satisfy that requirement.
These decisions underline the fact-sensitive nature of such property tax exemption inquiries, and high litigation costs for both sides of litigating these disputes. Given the current pressures on both nonprofit budgets and state and local treasuries, such disputes are unlikely to become any less frequent, however.
Tuesday, August 13, 2013
In a decision handed down last week, the New Jersey Superior Court, Appellate Division, ruled that charities that do not follow donor intent must return the gifts. In Adler v. Save, ___A.3d___, 2013 WL 4017286, a three-judge panel ruled that a Mercer County animal shelter must return a $50,000 gift originally slated for specialized construction.
In delivering the court's opinion, Judge Jose Fuentes wrote:
We hold that a charity that accepts a gift from a donor, knowing that the donor’s expressed purpose for making the gift was to fund a particular aspect of the charity’s eleemosynary mission, is bound to return the gift when the charity unilaterally decides not to honor the donor’s originally expressed purpose.
The case turned on a gift given by a Princeton couple, Bernard and Jeanne Adler, to animal shelter SAVE (now SAVE, A Friend to Homeless Animals). The gift was to finance the building of an area for larger dogs and older cats, whose adoption prospects are limited, as part of a new facility in Princeton.
Before SAVE began construction, it merged with another animal welfare nonprofit, Friends of Homeless Animals. The new organization developed a new plan to build a shelter in nearby Montgomery Township instead. The new shelter will be about half the size of what the new Princeton facility would have been. Although SAVE trustee John Sayer testified that the new shelter would “absolutely” have rooms for large dogs and older cats, the court said that evidence suggested otherwise. Judge Fuentes wrote:
Based on Mr. Sayer’s testimony and the letter announcing the merger between SAVE and Friends of Homeless Animals, we are satisfied that the 15,000 square foot shelter to be constructed in Montgomery Township does not include two rooms specifically designated for the long-term care of large dogs and older cats.
The Adlers filed suit in Mercer County in 2007, seeking the return of their $50,000 donation to SAVE. By order dated August 26, 2010, the court held in the Adlers' favor, finding that they were entitled to the full return of their charitable gift. SAVE appealed, arguing that the judge erred in determining that the Adlers’ gift was restricted. SAVE also argued that even if the gift was restricted, its purpose would have been fulfilled and, barring that, the lower court should have reformed the gift under the cy pres doctrine so that SAVE could spend it on a project as near as possible to the original intent.
The appellate court disagreed, saying SAVE had courted the Adlers, who had been long-time supporters of animal welfare but who had never made a significant gift prior to the $50,000 donation, with a campaign that specifically included the two rooms and a naming opportunity. “To be clear, the record shows that SAVE: (1) decided to construct a substantially smaller facility; (2) outside the Princeton area; (3) without any specifically designated rooms for large dogs and older cats; and (4) without any mention of plaintiffs’ names,” Judge Fuentes wrote. He continued: "By opting to disregard plaintiffs’ conditions, SAVE breached its fiduciary duty to plaintiff. Under these circumstances, requiring SAVE to return the gift appears not only eminently suitable, but a mild sanction.”
Monday, July 15, 2013
A Maine Superior Court has overruled the decision by the Town of Limington to deny or limit property tax exemption for several parcels of land identified as either "Tree Growth" or "Open Space" properties under the applicable state law. In Francis Small Heritage Trust v. The Town of Limington, the court briefly described the broader context of tax exemptions for charitable institutions under both federal and state law before providing a detailed recitation of the law relating to Maine's property tax exemptions (including a reference to the Elizabethan Charitable Uses Act of 1601!). It both concluded that the Francis Small Heritage Trust "is operated for purely benevolent and charitable purposes in good faith" and rejected the Board of Property Tax Review's argument that permitting logging, farming, and other compatible commercial activities was disqualifying given that so such activities had never in fact taken place and even if they had limited, purely incidental such activities did not undermine exemption. The fact that the properties at issue were indisputedly used to conserve wildlife habitat and were open to the public year-around at no cost also contributed to the court's decision.
The Texas Court of Appeals (Seventh District) recently had occasion to consider the state's law relating to exemption from ad valorum taxes applicable to real and business personal property. While the factual details of the Texas Student Housing Authority v. Brazos Country Appraisal District decision may only be of interest to the parties involved, what is of more general interest is the court's lengthy discussion of both the statutory and constitutional grounds for such exemptions. For both the statutory provision, relating to property "held for educational purposes only" and "devoted exclusively to the use and benefits of the students, faculty, and staff members of an accredited institution of higher education," and the state constitutional provision, relating to "property of counties, cities and towns" (read broadly by the court) and "devoted exclusively to the use and benefit of the public," the court found that exclusively means, well, exclusively. The court therefore concluded under both provisions that while providing housing to participants in state legislatively sanctioned programs associated with the Texas A&M University system fell within these "exclusively" provisions, providing housing for participants in programs sponsored by a private charity unaffiliated with the state government or the Texas A&M system and by an out-of-state for-profit corporation did not, and so providing such housing caused the properties not to be exempt from tax during the years those activities occurred. The Texas Student Housing Authority therefore received a split decision, reacquiring exemption for one year but unable to reverse the lower court's decision denying exemption for three other years.
Friday, June 28, 2013
One had to figure this was coming sooner or later: a lawsuit challenging state property tax exemption for Princeton University, which a state trial judge has refused to dismiss. The arguments in the case appear familiar: the lawyer for the plaintiffs (property owners in Princeton, N.J.) contends that many of Princeton's buildings are used for commercial purposes, and should be put back on the property tax rolls. To quote the story:
“In 2011 Princeton University received $118 million in patent royalties and distributed $30 million from the profits to faculty members,” Afran [the lawyer for the plaintiffs] said. “Under the law they are not even entitled to a tax exemption because they are engaged in commercial patent licensing, and the school give out a percentage of profits to faculty. Under the law in New Jersey, if a nonprofit gives out profits, it is not entitled to an exemption at all.”
The final quote sort of sums it all up:
“In many ways these modern universities have become commercial enterprises.”
Thursday, June 13, 2013
Labelling charitable fundraising scams as "among the lowest of the low," Attorney General Schneiderman praised the decision by New York State Supreme Court Judge Emily Pines. According to Mr. Schneiderman, "This decision proves that New York fundraisers will be held accountable when they defraud the public and line their own pockets." He went on to state that the charity played on people's emotions to get them to donate money in the hopes of fighting breast cancer, but little of the money ever went to research or medical services
Judge Pines' decision said that from 2005 to 2011, the Campaign Center raised $4.9 million on behalf of the charity but kept $3.9 million for itself. During those years, the decision continued, fundraisers, including the Campaign Center, raised $10 million for the Coalition Against Breast Cancer, but the charity only spent 4 percent of that on charitable purposes, according to the judge's decision.
Well, someone is doing something!