Nonprofit Law Prof Blog

Charitable Solicitation Update: New California Rules for Charitable Crowdfunding; Article on Cause-Related Marketing

California is working on the implementation of its new charitable crowdfunding law, which has an effective date of January 1, 2023. The Attorney General's office has now released proposed regulations, with comments due by July 12th. For a summary of the proposed regulations, see this Adler & Colvin blog post. For more general coverage of the law's adoption, see this For Purpose Law Group blog post.

In other solicitation developments, researchers at the University of Michigan recently published a study titled How does regulatory monitoring of cause marketing affect firm behavior and donations to charity?, International Journal of Research in Marketing (online 2022; hard copy publication pending). Here is the abstract:

Cause marketing (CM) typically involves for-profit firms donating part of their sales revenue to a charity, with the hope that this will increase their revenue. We argue that it is important for a regulator to monitor firms’ CM activities, and to assess how differences in the enforcement of CM laws impact the CM practice by firms. Our analytical model uses a Stackelberg leader–follower game that endogenizes the regulator’s decision to enforce CM. The firm then decides whether to truthfully declare or overstate the amount it contributes to charity (and if overstate: by how much). We find the following results in equilibrium under different conditions: (i) CM campaigns are a win–win–win situation – they increase profit for the firm while being truthful, generate larger donations for the charity, and generate a cause marketing surplus for the regulator, resulting in doing well while doing good, (ii) the best response of the firm is to be strategic, even when the regulator is strict with monitoring, (iii) the regulator itself decides not to monitor CM, even though it knows that this results in untruthful behavior by firms. When we endogenize the extent of overstatement, we find that the firm tends to be strategic by overstating donation percentage, whether the regulator is strict or not. As the proportion of unsophisticated consumers (who believe a firm’s claims, whether truthful or not) increases, the donation proportion decreases in general, and the overstatement level increases when the regulator is lenient and decreases when the regulator is strict. In equilibrium, the regulator is strict if the market size is large, and lenient otherwise. A survey with consumers supports key modeling assumptions regarding consumers' lack of knowledge of CM laws.

Lloyd Mayer

Conservation Easements Update: ProPublica Story, Articles on Valuation and Enforcement

ProPublica published a story on the government battle against syndicated conservation easements titled The Tax Scam That Won't Die. The discouraging sub-title is "The IRS, the Justice Department and Congressional Republicans and Democrats are all trying to put an end to syndicated conservation easements. But with lobbyists like Henry Waxman helping lead the resistance, the efforts have had little effect." It concludes: "The use of the scheme continues unabated. Along the way it has cost the U.S. Treasury billions in lost taxes, according to the IRS."

Conservation easements also continue to attract academic interest, with two recent articles of note. Alan Feld, Theodore S. Sims (both Boston University), and Jacob Nielsen (now at Ropes & Gray) have posted Green, or Greed? A Fresh Perspective on the Valuation of Conservation Easements, Tax Law Review (forthcoming). Here is the abstract:

Charitable contributions of "conservation easements" have since 1980 allowed high-income taxpayers to shelter income from taxation through overvalued deductions. Overvaluation has increased dramatically in the past 20 years: a 2016 study of all easement decisions since 1980 reported that while overvaluation had averaged by a factor of two before 1994, it averaged by a factor of ten for decisions between 1994 and 2016. SOI data disclose that aggregate easement contributions deducted on Schedule A grew from $2.26 billion in 2015 to $6.5 billion in 2018 (the most recent year available). A recent report by supporters of conservation easements acknowledges that "neither the [IRS] nor the courts have sufficient resources to effectively police valuation abuse."

Most of the concern has been with "syndicated conservation easements" ("SCEs"), and most proposed remedies to easement overvaluation focus on SCEs. We show, however, that exactly the same traits that produce overvalued SCEs -- allowing charitable deductions based on "fair market" value, which sanctions deducting unrealized appreciation without taxing the corresponding gain, combined with the unavoidable need to value contributed easements through as manipulable a process as appraisal -- have facilitated abusive overvaluation of non-syndicated easements too. That combination can leave an easement contributor better off than if she had done anything else with the land, including selling it for its (true) fair market value. The only effective solution to easement overvaluation is to restrict the deductibility of easement contributions attributable to unrealized gain. To that end we propose limiting charitable contributions of easements granted with respect to recently acquired property initially to cost, much as Congress has previously done with other contributions of appreciated property that are vulnerable to abuse, while allowing that limitation to evolve with real estate values over time. We also propose an upfront excise on unrealized appreciation in contributed easements, to increase the salience to prospective contributors of the risks of overvaluation.

In addition, Jimmy Godin has published A Sand County Tax Shelter: Syndicated Conservation Easements and Their Toll on the American Taxpayer, 2022 Utah Law Review 213 (2022). Here is the abstract:

The conservation easement is a powerful tool for conserving private land in the United States and beyond. Among the many incentives for encouraging conservation easement donations are tax deductions, which largely depend on the conservation value of the donated land. But groups of wealthy taxpayers, accountants, attorneys, and appraisers are manipulating the conservation easement tax framework and receiving large tax deductions for conservation easements that are practically worthless in a conservation sense—transactions known as 'syndicated conservation easements.' Syndicated conservation easements have generated substantial controversy, in part because they cost American taxpayers billions of tax dollars annually. While the Internal Revenue Service, the United States Department of Justice, members of Congress, and conservation groups are attempting to crack down on syndicated conservation easements, their efforts to curb the practice remain ineffective. This Note first examines the conservation easement tax framework and considers the ways in which it enables syndicated conservation easements. Next, this Note describes the measures taken against syndicated conservation easements and analyzes how such measures have fallen short. Finally, this Note contemplates more effective ways to uncover syndicated conservation easements and curb such transactions entirely. Specifically, the Internal Revenue Service must streamline its auditing efforts to focus on appraisals, while the United States Department of Justice must impose harsher penalties on those involved in syndicated conservation easements. Similarly, Congress must create a more effective system for appraisal oversight and should enact legislation that alters the existing tax framework in a way that disincentivizes wealthy taxpayers from engaging in syndicated conservation easements altogether. Lastly, individual conservation groups must work together to create a more uniform set of standards and practices for conservation easement donation, while state legislators should strive to create uniformity in state conservation easement tax law.

Lloyd Mayer

Contribution Data: Giving USA 2022 Report; IRS Noncash Contributions Statistics

The GivinG USA Foundation published its annual Giving USA report on charitable giving in 2021. According to the Indiana University Lilly Family School of Philanthropy, which researches and writes the report, here are some of the highlights:

• Total charitable giving grew by 4.0% to $484.85 billion, with $326.87 billion or slightly less than 70% coming from individuals. The remaining giving came from foundations ($90.88 billion), bequests ($46.01 billion), and corporations ($21.08 billion).

• The largest recipient area remained religion at $135.78 billion, followed by education at $70.79 billion, human services at $65.33 billion, and foundations at $64.26 billion, with lesser amounts to public-sector benefit organizations (e.g., United Ways and national donor-advised fund sponsors), health, arts, international affairs, and environmental.

Separately, the IRS Statistics of Income Office released spreadsheets with data on Noncash Charitable Contributions by individuals for tax year 2019. Highlights include:

• Over 3.9 million returns reported over 12.5 million noncash charitable contributions on Form 8283, with a total fair market value of over $96.5 billion.

• Donated investments accounted for almost half of the value donated ($45.0 billion), with real estate (including land and easements) accounting for an additional $33.9 billion and other categories such as clothing, household items, and art/collectibles making up the rest.

Lloyd Mayer

Cross-Border Philanthropy: Nicaragua Shuts Down 101 Groups; Report on Developments in Asia

The Associated Press reports that in late June the Nicaraguan government closed an additional 101 nonprofit organizations with the approval of the country's congress, bringing the total shut down over the past four years to over 750. The claimed basis for the most recent closures is an alleged failure to comply with a 2020 "foreign agent" registration law. This recent group includes the local branch of Missionaries of Charity, an organization established by Mother Teresa. Hat tip: Chronicle of Philanthropy.

Separately, Give2Asia released a report on Unlocking Cross-Border Philanthropy in Asia, with contributions from the Asia Philanthropy Circle and the King Baudouin Foundation, and support from the Bill and Melinda Gates Foundation. Here is a description of the report:

This study focuses on a very specific idea that more private funders in Asia are committed to solving some of the most pressing issues facing the region and looking beyond their own countries and territories to make meaningful change. This idea is at the heart of a growing discussion around whether and how regional philanthropy within Asia will develop as wealth increases.

Prior to this study, the authors had an idea of the landscape of cross-border giving based on prior research, informal conversations, and our accumulative grantmaking experiences in several markets. This study aims to assess these assumptions by exploring the nuanced perspectives of a diverse group of philanthropic stakeholders and their respective markets. It will also expand our existing knowledge to more potential markets in the region.

Broadly, the study aims to answer two key questions

Is there appetite and need for infrastructure that supports cross-border giving within Asia?

If so, what locations, institutions, and services might be involved to build such infrastructure?

Hat tip: Philanthropy News Digest.

Lloyd Mayer

Dealing with Insiders and True the Vote

In May this space covered the scrutiny the BLM Global Network Foundation was receiving in light of press reports about various transactions, including with parties connected to Foundation insiders. The month of June saw a similar report but relating to the other end of the political spectrum. Reveal, a nonprofit news outlet, reported on True the Vote and a remarkable similar set of circumstances - a sudden influx of funds tied to current events, a founding individual operating a nonprofit with limited oversight from others, and questionable financial transactions with parties connected to insiders. In this case, those transactions allegedly include an apparent loan to the founder in violate of Texas state law and hundreds of thousands paid to a company created by a former board member with business and possibly personal ties to the founder. And as was the case with BLM Global Network Foundation, some of the sharpest questions came from supporters, in True the Vote's situation a donor who made a multi-million dollar contribution in the wake of the 2000 election and then sued (unsuccessfully so far) over the use of the contributed funds.

Lloyd Mayer

N.Y. Times: "76 Fake Charities Shared a Mailbox. The I.R.S. Approved Them All."

N.Y. Times, led by Pulitzer Prize-winning reporter David Fahrenthold, has been gathering information about the IRS exemption application process. In a story over the holiday weekend, it reported on a single individual who created dozens of fake charities and obtained IRS recognition of tax-exempt status for them, even after being warned about the scam by the American Cancer Society. The story highlights what nonprofit legal experts have long known - the application process has essentially become a registration process, particularly for applications submitted using the Form 1023-EZ. Combined with the less than 0.2 percent examination rate for exempt organization returns, and the very limited and inconsistent level of resources states devote to overseeing charities, it should be no surprise that fraudsters often use purported charities to enrich themselves, banking on the halo effect of IRS recognition to fool donors.

Lloyd Mayer

IRS Data Book 2021 EO Information (Including Examination Rate of < 0.2%)

The 2021 IRS Data Book, covering the fiscal year that ended on September 30, 2021, contains its usual treasury trove of information about exempt organizations. Notable facts include:

• There are 1,980,571 tax-exempt organizations, nonexempt charitable trusts, and split-interest trusts (Table 14), of which 1,828,187 are recognized under IRC section 501(c) (1,431,266 under section 501(c)(3)) and 42,697 under IRS section 527 (political organizations).

• The IRS closed 94,466 applications for recognition of exemption (Table 12), approving 81,583 (86.4%), disapproving 84 (0.1%), and resolving 12,793 (13.5%) in other ways (including withdrawal, lacking required information, or incomplete). The vast majority (90,461 or 95.8%) of the applications were under IRC section 501(c)(3), with the next closest categories being approximately a thousand applications each under section 501(c)(4) and section 501(c)(6).

• The IRS also received 3,334 notices of intent to operate under Section 501(c)(4) (Table 13), of which it rejected 465 for a variety of reasons, including that notice was not required because of a previously filed annual information return or application for recognition of exemption, or the organization was exempt under a section other than 501(c)(4).

• The IRS examined (Table 21) only 1,383 Forms 990, 990-EZ, and 990-N, an additional 203 Forms 990-PF, 1041-A, 1120-POL, and 5227, 748 Forms 990-T, and 301 Forms 4720. This compares to 1,360,719 exempt organization returns filed in 2020 and 1,722,803 filed in 2021, which figures include all of the above forms except for Forms 1041-A and 1120-POL This means even taking into account examination lag the examination rate was less than 0.2%.

Lloyd Mayer

RNS: In Defiance of US Bishops, Nancy Pelosi Receives Communion at the Vatican

Last week's Supreme Court decision in Dobbs v. Jackson Women's Health Organization has left the American public very divided. Many are angry; many are happy. The debate over the right to an abortion and women's rights to make their own decisions about their bodies has heated up. In the midst of this heated atmosphere, RNS reported today that in defiance of some U.S. Roman Catholic bishops, Speaker of the House Nancy Pelosi received Communion during a Mass presided over by Pope Francis on Wednesday (June 29) for the celebration of the feast of Sts. Peter and Paul.

Back in Speaker Pelosi's home diocese of San Francisco, California, Archbishop Salvatore Cordileone announced on June 1 that the Catholic congresswoman is banned from receiving Communion due to her abortion rights stance. Since then, she has been barred from receiving the sacrament in four other dioceses. 

Pelosi called the Supreme Court's decision in Dobbs an “outrageous and heart-wrenching” decision. The US Catholic Bishops lauded the court's decision, which they said overturned “an unjust law that has permitted some to decide whether others can live or die.”

But earlier today, Wednesday, Speaker Pelosi met with Pope Francis before the service and received a blessing, according to one of the Mass attendees. 

Sitting in the VIP section during the traditional Mass at St. Peter’s to celebrate the patron saints of Rome, Pelosi listened to Pope Francis’ homily before receiving Communion from one of the many priests in the basilica, according to eyewitnesses. Francis has rarely distributed Communion, citing precisely the desire to prevent politicization of the sacrament.

In his homily, Francis urged the faithful to “Go to the crossroads and bring everyone: blind, deaf, lame, sick, righteous, sinful, everyone, everyone! This word of the Lord must resound, resound in the mind and heart: everyone! In the church there is room for everyone!” He added that “many times we become a church with open doors but to dismiss people, to condemn people.”

The RNS article concludes by noting that

Last year, Pope Francis told reporters on his return flight from Central Europe that he has never denied Communion to anyone and criticized bishops who didn’t act as shepherds and “aligned themselves with political life, on political problems.” The Vatican’s doctrinal department, in a letter in May of last year, urged the U.S. bishops to engage in dialogue among themselves and with Catholic politicians before reaching any decision.

Well, in this, as in an increasing number of philosophies, there appears to be a great divide between these United States of America and the Rest of the World!

Prof. Vaughn E. James, Texas Tech University School of Law

Treasury Office of Tax Policy EO Position (deadline extended to 6/30)

The Office of Tax Legislative Counsel in the Treasury Department's Office of Tax Policy is seeking an Attorney Advisor with exempt organizations experience, as well as in other areas. The just extended deadline for applying is this Thursday, June 30th. Here are the qualifications (emphasis added):

You must meet the following requirements by the closing date of this announcement.

Specialized experience for the GS-15: You must have one year of specialized experience at a level of difficulty and responsibility equivalent to the GS-14 grade level in the federal service. The expectation for selection for grade GS-15 will be at least the following: 12 months of pertinent legal experience at the GS-14 (or equivalent) level. Specialized experience for this position is defined as proven proficiency and experience in the following:

-Experience providing counsel in the area of federal taxation including guidance on: income and transfer tax rules for individuals, trusts, and estates; rules related to charities and other exempt organizations, as well as state, local, or Indian tribal governments; taxation of partnerships, S corporations, or other pass-through business entities and their owners and/or energy tax incentives. AND

- Experience conferring with persons or groups interested in their suggestions for new legislation or on complaints with respect to existing legislation, answering questions relating to tax legislation, conferring with the appropriate interested officials, attorneys, or other technical employees with respect thereto. AND

- Experience with original investigation and research, preparing detailed memoranda and making recommendations on action to be taken.

This experience may have been gained in either the public or private sector. One year of experience refers to full-time work; part-time work is considered on a prorated basis.

Lloyd Mayer

Nonprofits and Dobbs v. Jackson Women's Health Organization

    Today, the Supreme Court overturned Roe v. Wade in Dobbs v. Jackson Women's Health Organization, a historic decision holding there is no longer a federal constitutional right to an abortion.  While the nation reacts in various ways to the decision, it is undeniable that nonprofits played a major role.  Since there are restrictions on the political activity of 501(c)(3) organizations, 501(c)(4) organizations also known as “social welfare organizations” featured heavily.  For a brief summary of advocacy groups and respective restrictions, including 501(c)(3) organizations, 501(c)(4) organizations, and political action committees,  see the website of the non-partisan 501(c)(3) Open Secrets.  

    The anti-abortion group Susan B. Anthony List was created in the 1990s after the formation of Emily’s List, a political action committee (PAC) designed to support abortion rights candidates.  Susan B. Anthony List’s 501(c)(4) is permitted to engage in some lobbying and political activity as long as they do not eclipse its primary purpose.  Susan B. Anthony List’s 501(c)(3) called the Susan B. Anthony Education Fund is subject to lobbying restrictions but can disseminate the group’s anti-abortion message. Here is further reading about Susan B. Anthony's List and today’s decision. 

Should Private Schools Proven to Discriminate Intentionally Receive Government Aid?

    In thinking about the recent Supreme Court decision in Carson v. Makin, No. 20-1088, which deals with private religious schools and state tuition programs, I raised the question of whether government aid should be awarded to private schools at all.  One reason I raised this issue is because private schools are not subject to the same civil rights laws as public schools.  Almost one year ago to the day, I blogged about how historically private schools have not been subject to federal civil rights laws because they did not receive federal funds.  I also noted that perhaps unknowingly, by virtue of receiving P.P.P. loans during the pandemic, private schools became subject to such laws, including Title VI of the Civil Rights Act of 1964 (“Title VI”), which prohibits discrimination on the basis of race, color, or national origin.  In other words, private schools with P.P.P. loans cannot engage in racial discrimination against employees, students, parents, or other participants.  This includes in terms of employment, admissions, enrollment, and other treatment. 

    One must consider the compelling question whether private schools (which in the absence of a P.P.P. loan or other federal funding) are permitted to run afoul of civil rights laws, should be able to receive government aid under a state tuition program, which appears to be the case with the Maine law.  Granted, private schools (non-religious and religious) are subject to nondiscrimination requirements by virtue of their 501(c)(3) status, which they must attest to annually either by filing Form 990 or a statement with the IRS, respectively.  Nevertheless, it is important to consider that Title VI imposes prohibitions against racial discrimination not covered by section 501(c)(3).  One definite difference is that private schools who become subject to federal civil rights laws, e.g., those who receive P.P.P. loans, may have to pay compensatory damages to individuals who prove intentional discrimination in lawsuits against the schools.  In addition, injunctive relief may be awarded to such individuals.  In other words, these private schools are no longer shielded from causes of action from individuals and families who have faced racial discrimination at their hands.

    In the opinion, Chief Justice Roberts himself acknowledged the distinction between public schools and private schools in this regard:  “[T]o start with the most obvious, private schools are different by definition because they do not have to accept all students…”  Given that private schools (who have not received federal funds) largely are shielded from damages or injunctions for intentional discrimination which can be proven, should they be allowed to receive government aid?  This is the larger question that must be answered.

 

Khrista McCarden

Hoffman Fuller Professor of Tax Law

Tulane Law School

Supreme Court Rules Maine Cannot Exclude Religious Private Schools from Aid - The Larger Question

    Today in Carson v. Makin, No. 20-1088, the Supreme Court ruled that Maine cannot exclude religious private schools from a state tuition program.   According to NBC News, under the state tuition program in Maine, taxpayer money is made available to families in remote areas that lack public high schools.  Under the state law, these families could use taxpayer money to send their children to public or private schools in other communities, as long as the schools were not “sectarian,” i.e., did not promote a particular belief or faith system and teach “through the lens of this faith.”  It was a 6 to 3 vote against the Maine law led by a conservative majority.  Chief Justice John G. Roberts Jr. wrote for the majority and stated the ruling does not require states to support religion.  He notes that it requires states that choose to subsidize private schools not to discriminate against religious ones.  In separate dissents, Justice Sonia Sotomayor and Justice Stephen G. Breyer strongly objected on separation of church and state grounds.  A full copy of the decision may be found here. 

    One of the lawyers for the families who challenged the Maine law summed up the decision as “a major step for religious schools to receive the same kind of government aid as other private schools.”  Even if one agrees that religious private schools should not be treated differently than non-religious private schools, an important and long-standing threshold question remains:  Should taxpayer money be made available for private school tuition at all?  

 

Khrista McCarden

Hoffman Fuller Associate Professor of Tax Law

Tulane Law School

NYU School of Law Hosts 2022 Social Entrepreneurship and Impact Investing Conference

    Earlier this month, the Impact Investing Legal Working Group (“IILWG”) and the Grunin Center for Law and Social Entrepreneurship at NYU Law hosted a conference entitled “Legal Issues in Social Entrepreneurship and Impact Investing in the U.S. and Beyond” at NYU.  The IILWG is a group of lawyers and legal/compliance professionals who work or desire to work in the fields of impact investing and social enterprise.  It is comprised of a impact investors, social enterprises, law firms, nonprofit organizations, foundations, and academic institutions.  The Grunin Center for Law and Social Entrepreneurship was formed in May 2017 by two NYU School of Law alumni.  Its mission is to “enhance the community of lawyers and legal institutions engaged in social entrepreneurship and impact investing and to accelerate their effective participation in these fields.” 

    The 2022 conference focused on the following themes: (1) Inclusive Capitalism and Going the Last Mile; (2) Blending Finance to Advance Climate Adaptation and Resilience; (3) Elevating Beneficiaries: Inclusive Design in Impact Instruments; (4) Climate Regulation and the Long and Winding Road; (5) Legal Implications of Minority Wealth Equity Strategies; and (6) Prepare for Impact: Training Lawyers for ESG, Impact Investing, and Social Enterprise Practices.  The complete Program Agenda may be found here.  The themed panel discussion on minority wealth equity seems particularly relevant in light of recent tragedies involving racially charged violence, and it focused on supporting minority-owned businesses in the United States and abroad.  My former Corporations professor, Professor John Coates, delivered a keynote on the proposed SEC climate regulation in confronting a global concern.  The agenda also included, inter alia, an in-progress case study on MicroBuild, a global impact investing fund with a goal of providing adequate housing for the poor.  The topics from the conference lend credence to the notion that impact investing is an effective vehicle for resolving global challenges in a new era of much needed change.

 

Khrista McCarden

Hoffman Fuller Associate Professor of Tax law

Tulane Law School

Can Religious Freedom Protect Right to Abortion?

Congregation L’Dor Va-Dor, a progressive synagogue in Palm Beach County not affiliated with a broader denomination filed a lawsuit last week challenging Florida legislation banning most abortions after 15 weeks, under the State Constitution’s right to privacy and freedom of religion. 

The Congregation apparently argues that under the Jewish religion “abortion is required if necessary to protect the health, mental or physical well-being of the woman.”

I have not found the complaint but would gladly post if anyone has found it online. I am wondering whether they are bringing a claim under the Religious Freed Restoration Act (presumably that would be Florida's version of that statute). EDIT: Here is the complaint 

Seems like this should be an interesting case to follow for nonprofits given the potential of the public policy requirement to play a role in how we think about nonprofits engaged in the abortion realm after the Dobbs opinion comes out.

Philip Hackney

 

 

Propublica Piece Examines Nonprofits Pushing Anti-CRT Movement

Propublica has a great but tough story that provides insight into the nonprofits engaged in the Anti-Critical Race Theory movement across the country, including the terrifying impact it has on the lives of many people. It's a reminder of how central a role nonprofits play in our collective American life in the political battles in which we engage and that they can have both great positive effect, but also very dark impact at the same time. 

It's a sprawling story and hard to summarize but the lead does about the best job of describing its focus: "Cecelia Lewis was asked to apply for a Georgia school district’s first-ever administrator job devoted to diversity, equity and inclusion. A group of parents — coached by local and national anti-CRT groups — had other plans."

More from the story: "Lewis, a middle school principal, initially applied for a position that would bring her closer to the classroom as a coach for teachers. But district leaders were so impressed by her interview that they encouraged her to apply instead for a new opening they’d created: their first administrator focused on diversity, equity and inclusion initiatives.

DEI-focused positions were becoming more common in districts across the country, following the 2020 protests over the killings of George Floyd, Breonna Taylor and Ahmaud Arbery. The purpose of such jobs typically is to provide a more direct path for addressing disparities stemming from race, economics, disabilities and other factors."

Examples of the role of nonprofits: "dozens of parents from across the county had assembled on a Sunday afternoon for a lesson in an emerging form of warfare. School board meetings would be their battlefield. Their enemy was CRT.

One of several presenters at the meeting was Rhonda Thomas, a frequent guest on conservative podcasts and the founder of the Atlanta-based Truth in Education, a national nonprofit that aims to educate parents and teachers about “radical ideologies being taught in schools.” “So what is critical race theory?” Thomas asked the crowd. “It teaches kids that whites are inherently racist and oppressive, perhaps unconsciously,” and that “all whites are responsible for all historical actions” and “should feel guilty.”

She added: “I cannot be asked for repentance for something my grandparents did or my ancestors did, right?”

Thomas stressed that parents should form their own nonprofit groups and cut ties with their schools’ Parent Teacher Associations. “The PTA supports everything we’re against,” she told them.

Another presenter, a local paralegal named Noelle Kahaian, leads the nonprofit Protect Student Health Georgia, which aims to “educate on harmful indoctrination” including “comprehensive sexuality education” and “gender ideology.”

Kahaian emphasized how to grab attention during upcoming school board meetings. Identify the best speakers in the group, she told them, adding: “It’s OK to be emotional.” Be sure to capture video of them addressing the board — or even consider hiring a professional videographer.

“It’s good in case Tucker Carlson wants to put you on air,” Kahaian said. “It really helps.”

The story gives great depth of understanding of the impact of this collection of nonprofits that work together to organize to push these narratives. It's well worth a read for those interested in the power of nonprofits and how they are being used today.

Philip Hackney

Equal Protection and Title IX Apply to Charter School Appeals Court Holds

In Peltier v. Charter Day School, the United States Court of Appeals for the 4th Circuit, sitting en banc, held a charter school in North Carolina to be a state actor for purposes of Section 1983 (for an Fourtheenth Amendment Equal Protection claim) and for purposes of Title IX. This meant that the charter could not apply its traditional rules and require girls to wear skirts.

Like most charters, Charter Day School is a nonprofit that is recognized by the IRS as a charitable organization exempt from tax under section 501(a) because described in Section 501(c)(3). Charter Day School and its management company argued that as a private entity it was not a state actor.

"CDS, a public charter school in Brunswick County, North Carolina, educates male and female students in kindergarten through the eighth grade. The founder of the school, Baker A. Mitchell, Jr., incorporated defendant Charter Day School, Inc. in 1999. The following year, he obtained a charter from the state of North Carolina, pursuant to the North Carolina Charter Schools Act of 1996, N.C. Gen. Stat. § 115C-218 et seq. CDS’ policies are established by the volunteer members of its Board of Trustees (the Board). Mitchell initially served as the Board’s chairman and now serves as its non-voting secretary."

For those interested in conflict of interest and for profit charter management companies, Charter Day School entered into a charter management contract with Roger A Bacon, Inc. This is a for profit company owned and managed by Mitchell the founder of the Charter Day School who also sits on the board of Charter Day School.

The Court concluded as follows:

"In sum, we hold that CDS, a public school under North Carolina law, is a state actor for purposes of Section 1983 and the Equal Protection Clause. By implementing the skirts requirement based on blatant gender stereotypes about the “proper place” for girls and women in society, CDS has acted in clear violation of the Equal Protection Clause. We further hold that sex-based dress codes like the skirts requirement, when imposed by covered entities, are subject to review under the anti-discrimination provisions of Title IX. We therefore affirm the district court’s award of summary judgment to the plaintiffs on their Equal Protection claim against CDS and affirm the court’s award of summary judgment to RBA on that claim. We vacate the district court’s judgment on the Title IX claim and remand for an evidentiary hearing on that claim asserted against all defendants."

In concluding that Charter Day School is a state actor the Court focused particularly upon the fact that the North Carolina Constitution committed to providing free, universal elementary and secondary schooling to the state’s residents and that charters were ensconced as a part of state law to providing that public education. 

Notably though, the for profit management company was not found to be a state actor. This will continue to be an interesting area to watch given that states allow charters to not have to follow many state laws required of public schools.

Philip Hackney  

AALS Section on Trusts & Estates TWO Calls for Papers: WIP & Pedagogy

The AALS Section on Trusts and Estates Section is seeking papers/presentations for a works in progress panel and a panel on Pedagogy.

Here are the two calls for papers/presentations:

Call 1 WIP: The AALS Section on Trusts and Estates is pleased to announce a Call for Papers: “Works in Progress in Trusts & Estates” 

Selected papers will be presented at the Trusts & Estates Program Session at the 2022 AALS Annual Meeting held in San Diego from January 4-7, 2023. 

Program Description: The Section seeks submissions on a variety of topics and methodological approaches related to Trusts & Estates Law. We are interested in all states of article development.

Eligibility: Full-time faculty of AALS member schools or non-member fee-paid schools as of the submission deadline are eligible to submit papers. For co-authored papers, both authors must satisfy the eligibility criteria. We particularly encourage new voices in the field to submit.

Submissions, due dates and method: Submissions should be of abstracts between 250 and 1,000 words, inclusive of any footnotes. Scholarship may be at any stage of the publication process from work-in-progress to completed article, but if already published, scholarship may not be published any earlier than 2022. We welcome legal scholarship across a wide variety of methodological approaches. Each potential speaker may submit only one abstract for consideration.

There are two submission due dates. The Section seeks detailed abstracts in late summer, with final papers due in late fall.

• The due date for detailed abstractsis August 31, 2022.
• The due date forfinal submission is November 15, 2022.

Abstracts and papers should be submitted electronically in Microsoft Word format to Eric Chaffee at Eric.Chaffee@UToledo.Edu. The subject line should read “AALS Trusts & Estates Section CFP WIP Submission.” By submitting an abstract for consideration, you agree to attend the 2023 AALS Annual Meeting Trusts & Estates Program Session should your paper be selected for presentation.

Submission review, selection, conference attendance: Abstracts and papers will be reviewed by members of the Section’s Executive Committee. Selected presenters will be announced by October 1, 2022. The Call for Paper presenters will be responsible for paying their own AALS registration fee, hotel, and travel expenses.

Inquiries or questions: Any inquiries about the Call for Papers should be directed to Eric Chaffee at the contact information noted above.

 

 

Call 2 Pedagogy: The AALS Section on Trusts and Estates is pleased to announce a Call for Papers: “Post-Pandemic Pedagogy in Trusts & Estates” 

Selected papers will be presented at the Trusts & Estates Program Session at the 2022 AALS Annual Meeting held in San Diego from January 4-7, 2023. 

Program Description: We invite papers and/or presentations that provide insights into educating law students in trusts & estates. These insights might take a variety of forms. For example, papers/presentations might describe classroom techniques and innovations, innovations in course design or structure, or novel courses. They might discuss proposals that show how we might incorporate issues of race, gender, class, sexual orientation, immigration status, and/or disability into our classrooms. They might also explore the lessons learned during the time we have all now spent teaching during the pandemic. Or contributions might be completely forward looking and propose novel ideas or experiments in teaching that you have not yet implemented.

Eligibility: Full-time faculty of AALS member schools or non-member fee-paid schools as of the submission deadline are eligible to submit papers. For co-authored papers/presentations, both authors must satisfy the eligibility criteria.

Submissions, due dates and method: Submissions should be of abstracts between 250 and 1,000 words, inclusive of any footnotes. The submissions for this panel can either describe an intended paper or a presentation that you will provide. Scholarship may be at any stage of the publication process from work-in-progress to completed article, but if already published, scholarship may not be published any earlier than 2022. We welcome legal scholarship across a wide variety of methodological approaches. Each potential speaker may submit only one abstract for consideration.

There are two submission due dates. The Section seeks detailed abstracts in late summer, with final papers due in late fall.

• The due date for detailed abstractsis August 31, 2022.
• The due date forfinal papers/and or presentation materials is November 15, 2022.

Abstracts and papers should be submitted electronically in Microsoft Word format to Philip Hackney at phackney@pitt.edu. The subject line should read “AALS Trusts & Estates Section CFP Pedagogy Submission.” By submitting an abstract for consideration, you agree to attend the 2023 AALS Annual Meeting Trusts & Estates Program Session should your paper be selected for presentation.

Submission review, selection, conference attendance: Abstracts and papers will be reviewed by members of the Section’s Executive Committee. Selected presenters will be announced by October 1, 2022. The Call for Paper presenters will be responsible for paying their own AALS registration fee, hotel, and travel expenses.

Inquiries or questions: Any inquiries about the Call for Papers should be directed to Philip Hackney at the contact information noted above.

 

Philip Hackney

06/13/22

Philanthropy in the Age of Covid

Last week, Candid and the Center for Disaster Philanthropy released Philanthropy and Covid-19: Examining Two Years of Giving. There's a lot of interesting information there, but the topline conclusion is this: Covid-related giving declined significantly between 2020 and 2021, on several metrics.

Survey respondents reported $2.119 billion of Covid support in 2020. The number declined 31% to $1.462 billion in 2021. In that same period, overall grantmaking went up 11%. (Candid does say that, since there is no precise definition of Covid support, respondents used their own judgment to determine whether their giving represented Covid support.)

Anyway, it's an interesting survey and an interesting report, and probably worth taking some time with.

Samuel D. Brunson

Happy June! (And Call for Papers)

Happy June everybody! You know what that means--it's time to submit for the AALS meeting! I've copied the call for papers below. Let's hear all of the hard nonprofit work everybody has been doing!

Call for Papers
AALS Section on Nonprofit and Philanthropy Law
2023 Annual Meeting
January 4-7
San Diego, CA

Nonprofits & Philanthropy

The AALS Section on Nonprofit and Philanthropy Law announces a call for papers to be presented as works-in-progress in our committee session at the 2023 AALS Annual Meeting in San Diego, CA from January 4-7, 2023.

The Section seeks submissions on a variety of topics and methodological approaches related to Nonprofit and Philanthropy Law. Given the recent importance and novelty of state nonprofit law, we are especially interested in scholarship that illuminates, elucidates, and otherwise engages with the work states are doing in the nonprofit world, but are happy to consider any scholarship in the field. We are interested in all states of article development.

Eligibility: Scholars teaching at AALS member or nonmember fee-paid schools. We particularly encourage new voices in the field to submit.

Due Date: June 15, 2022

Form and Content of Submission: Submissions may range from early drafts to articles that have been submitted for publication, but not articles that will have already been published by January 7, 2023.

Submission Method: please submit papers electronically to sbrunson@luc.edu with “AALS Nonprofit and Philanthropy Law Submission” in the email subject line.

Submission Review: Papers will be selected for inclusion in the program after review by members of the AALS Section on Nonprofit and Philanthropy Law.

Additional Information: Presenters are responsible for their own expenses associated with the conference. If you have any questions, please contact the chair, Sam Brunson, at sbrunson@luc.edu.

On Twitter and Charitable Exemption

On Friday, David Herzig (EY) proposed a thought experiment about what Elon Musk could do in his acquisition of Twitter:

So, how could one solve for this problem? Well, what if the take private proposed by Mr. Musk is done through a newly formed true Public Charity. And if one know the charitable rules like I do, then one would know that in the first year, Mr. Musk could do all the funding. 3/

— David Herzig (@professortax) May 27, 2022

His proposal led to some interesting discussion--could Twitter qualify as a 501(c)(3)? After all, newspapers and other journalistic organizations have been doing it for the last couple decades. Most recently, the Chicago Sun-Times converted from a for-profit newspaper into a nonprofit, tax-exempt one.

As I've thought about it, I see two major impediments to the idea of Twitter itself become a tax-exempt organization.

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