Thursday, February 2, 2023
A story in the Nonprofit Times highlights a book I had not previously heard about entitled "Uncharitable: How Restraints on Nonprofits Undermine Their Potential." Has anybody read this book? So the book has now turned into a documentary, the slick trailer for which is below. The author, Dan Pallotta, apparently believes (I don't want to speak for him, especially since I have neither read the book nor seen the upcoming documentary) nonprofits should be allowed to harness the profit-seeking motivations and practices prevalent in the capitalist market, presumably without fear of losing tax exempt status. Here is a portion of the Nonprofit Times summary.
Uncharitable, a documentary that argues nonprofits operate under excessively prohibitive constraints, is set to be released in late March. The movie is based on Dan Pallotta’s 2008 book, Uncharitable – How Restraints on Nonprofits Undermine Their Potential. Uncharitable was initially published by Tufts University Press. A new paperback edition was released by Brandeis University Press last year. The book offers a series of arguments against some of the primary complaints perennially levied against nonprofits. Within its first chapter, Pallotta cautions against:
- Constraints on compensation, stating that the impulse for leadership to act charitably does not automatically require self-deprivation;
- Prohibitions on risk which punish bold actions by nonprofits while rewarding timidity;
- A focus on short-term vision spurred by a perceived need for immediate gratification;
- Discouragement of paid advertising, which potentially allows nonprofits to cede attention and other results to competitors; and,
- Discouragement of investment returns, which potentially reduce or eliminate non-donation funding sources.
By the way, Kathleen Man Gyllenhaal is a Yale Graduate with a degree in Film Studies; she married the father of Jake, of Brokeback Mountain fame, and adopted the Swedish name pronounced "Yeelenhall." Uncharitable's author has also delivered a TED Talk entitled, "The Way We Think About Charity is Dead Wrong." This guy is kinda fixated on nonprofits and tax exemption obviously. Must be some kind of nut or something. Listen to his TED Talk below.
Thursday, January 26, 2023
A reminder that Brooklyn Law School will be hosting a conversation with Dana Brakman Reiser and Steven A. Dean on Tuesday, February 7th to discuss their new book For-Profit Philanthropy: Elite Power & the Threat of Limited Liability Companies, Donor-Advised Funds, & Strategic Corporate Giving. Attending by Zoom is available, but RSVPs are due by February 2nd. Here is the abstract:
In For-Profit Philanthropy, the authors reveal that philanthropy law has long operated as strategic compromise, binding ordinary Americans and elites together in a common purpose. At its center stands the private foundation. Prophylactic restrictions separate foundations from their funders' business and political interests. And foundations must disclose more about the sources and uses of their assets than any other business or charity. The philanthropic innovations increasingly espoused by America's most privileged individuals and powerful companies prioritize donor autonomy and privacy, casting aside the foundation and the tools it provides elites to demonstrate their good faith. By threatening to displace impactful charity with hollow virtue signaling, these actions also jeopardize the public's faith in the generosity of those at the top.
Private ordering, targeted regulation, or a new strategic bargain could strike a modern balance, preserving the benefits of the compromise between the modest and the mighty. For-Profit Philanthropy offers a detailed roadmap to show how it can be accomplished.
Friday, December 16, 2022
Dana Brakman Reiser and Steven A. Dean (both Brooklyn Law School) have written For-Profit Philanthropy: Elite Power and the Threat of Limited Liability Companies, Donor-Advised Funds, and Strategic Corporate Giving, to be published by Oxford University Press and scheduled to be available in January 2023. Brooklyn Law School will host a hybrid launch event on February 7, 2023, at 6:00 to 7:30 p.m. Here is the description:
This book exposes a migration of business practices, players, and norms into philanthropy that strains the regulatory regime sustaining public trust in elite generosity through accountability and transparency and proposes legal reforms and private solutions to restore it.
Practices, players, and norms native to the business sector have migrated into philanthropy, shattering longstanding barriers between commerce and charity. Philanthropies organized as limited liability companies, donor-advised funds sponsored by investment company giants, and strategic corporate philanthropy programs aligning charitable giving by multinationals with their business objectives paint a startling new picture of elite giving.
In For-Profit Philanthropy, Dana Brakman Reiser and Steven A. Dean reveal that philanthropy law has long operated as strategic compromise, binding ordinary Americans and elites together in a common purpose. At its center stands the private foundation. The authors show how the foundation neatly combines donor autonomy with a regulatory framework to elevate the public's voice. This framework compels foundations to spend a small but meaningful portion of the assets their elite donors have pledged to the public each year. Prophylactic restrictions separate foundations from their funders' business and political interests. And foundations must disclose more about the sources and uses of their assets than any other business or charity. The philanthropic innovations increasingly espoused by America's most privileged individuals and powerful companies prioritize donor autonomy and privacy, casting aside the foundation and the tools it provides elites to demonstrate their good faith. By threatening to displace impactful charity with hollow virtue signaling, these actions also jeopardize the public's faith in the generosity of those at the top.
Private ordering, targeted regulation, or a new strategic bargain could strike a modern balance, preserving the benefits of the compromise between the modest and the mighty. For-Profit Philanthropy offers a detailed roadmap to show how it can be accomplished.
Michael E. Hartmann at American Affairs has already published a review of the book, titled Big Philanthropy and the Benefits—and Limits—of the Bygone “Grand Bargain” (hat tip: EO Tax Journal).
Tuesday, November 22, 2022
Broad Overviews of Civil Society Research, Form 990 Data, Nonprofit Studies, Political Activities, and Scandals
There have been a series of recent publications either pulling together past nonprofit research, looking forward to future nonprofit research, or both, including articles in the special issue of the Nonprofit & Voluntary Sector Quarterly marking that publication's 50th anniversary. These include:
- A Research Agenda for Civil Society (Kees Biekart & Alan Fowler, editors; Edward Elgar Publishing): "Mapping a wide range of civil society research perspectives, this pioneering Research Agenda offers a rich and clear insight for academics and practitioners hoping to embark on future civil society research. Kees Biekart and Alan Fowler bring together over 20 expert contributions from researchers across the globe who are actively engaged in testing the old and generating new knowledge about civil society."
- Unlocking the Potential of Open 990 Data (Cinthia Schuman Ottinger & Jeff Williams; Stanford Social Innovation Review): "As the movement to expand public use of nonprofit data collected by the Internal Revenue Service advances, it’s a good time to review how far the social sector has come and how much work remains to reach the full potential of this treasure trove."
- Disciplinary Contributions to Nonprofit Studies: A 20-Year Empirical Mapping of Journals Publishing Nonprofit Research and Journal Citations by Nonprofit Scholars (Megan LePere-Schloop & Rebecca Nesbit; Nonprofit & Voluntary Sector Quarterly)): "In celebration of Nonprofit and Voluntary Sector Quarterly’s 50th anniversary, we present a bibliometric analysis of nonprofit research published between 1999 and 2019, within and outside of three core nonprofit journals—NVSQ, NML, and Voluntas. We seek to understand which journals, across scientific domains and social science disciplines, inform nonprofit research in one of three ways, by (a) publishing articles, (b) citing the three core journals, or being cited in these core journals. We found that nonprofit research published in economics and social sciences journals has kept pace with a large increase in indexed research. Meanwhile, though the core nonprofit journals robustly cite and are increasingly cited by business and management and public administration journals, they are less engaged with other social science disciplines. We discuss ways that the core journals could increase their visibility and penetration into these other disciplines and highlight perspectives potentially missing from the core journals."
- Government Regulation and the Political Activities of Nonprofits (Deborah A. Carroll, Suzette Myser & Seongho An; Nonprofit & Voluntary Sector Quarterly): "We propose a conceptual model of the political activities of nonprofits that qualify for exemption under subsections of the Internal Revenue Code other than 501(c)(3), including social welfare organizations, civic leagues, social clubs, and so on, which considers three categories of explanatory factors: organizational capacity, financial strategy, and operating environment. Using a Heckman selection model with longitudinal IRS 990 data, we find government regulation to be an obstacle for nonprofits to engage in the policy process. Political activities of non-501(c)(3) organizations are also negatively associated with government support, suggesting these organizations perceive government intervention differently from 501(c)(3) organizations when engaging in political activities."
- Nonprofit Scandals: A Systematic Review and Conceptual Framework (Cassandra M. Chapman, Matthew J. Hornsey, Nicole Gillespie & Steve Lockey; Nonprofit and Voluntary Sector Quarterly): "High-profile charity scandals have always represented a threat to the nonprofit sector, which relies on public trust and funding to operate. We systematically review 30 years of empirical research on scandals involving nonprofits and present both quantitative and qualitative syntheses of the 71 articles identified. Informed by this review, we generate a conceptual model theorizing the causes and consequences of scandals, as well as how nonprofits can best prevent and respond to organizational transgressions. We then put forward a research agenda that elaborates five key factors that are especially important for understanding nonprofit scandals but remain understudied: (a) integrity versus competence violations, (b) moral licensing, (c) the multilevel nature of organizational transgressions, (d) sectoral causes of scandal, and (e) effective responses. We close the article with recommendations for nonprofit managers about how to conceptualize, prevent, plan for, and respond to transgressions occurring within their organizations, and any resulting scandals."
Monday, November 21, 2022
Three new publications by Ofer Eldar (Duke), Dana Brakman Reiser & Steven Dean (Brooklyn), and Rasheda L. Weaver (Rutgers) highlight the myriad of possible forms for pursuing philanthropy currently, as well as their pros and cons. Here are summaries:
- Are Enterprise Foundations Possible in the United States? (Eldar): "This book chapter discusses the ability of entrepreneurs to form enterprise foundations in the US and the hurdles for forming them. The US regime for tax-exempt private foundations is very restrictive and does not practically allow them to have substantial ownership of for-profit firms. As a result, there is a perception that enterprise foundations are not feasible in the US. However, enterprise foundations, broadly defined as industrial firms controlled by any nonprofit firm, need not involve ownership by a private foundation (as it is defined in the US Tax Code) and could also be owned by other types of nonprofits. Such enterprise foundations are unlikely to benefit from key tax exemptions (such as tax-deductible donations or income tax exemptions), which probably explains their unpopularity. The chapter evaluates recent developments to liberalize the law of enterprise foundations, including (1) the "Newman's Own" exception that permits private foundations to own business firms under certain restrictive conditions, and (2) the perpetual purpose trust, which was recently utilized to transfer the ownership of Patagonia from the founder to a trust and a non-exempt nonprofit."
- For-Profit Philanthropy: Elite Power and the Threat of Limited Liability Companies, Donor-Advised Funds, and Strategic Corporate Giving (Reiser & Dean): "This book exposes a migration of business practices, players, and norms into philanthropy that strains the regulatory regime sustaining public trust in elite generosity through accountability and transparency and proposes legal reforms and private solutions to restore it."
- Social Entrepreneurship: A Practical Introduction (Weaver): "[This book] equips aspiring entrepreneurs with the tools needed to design and launch businesses to create positive social change in their communities. This accessible textbook aims to educate and motivate people interested in social entrepreneurship, showing that such businesses are a valuable part of the community development toolbox. Each chapter focuses on a key aspect of social entrepreneurship, from value creation and business planning to impact measurement and scaling up. Different social business models are presented, with analysis of their strengths and weaknesses. Cases and examples are included throughout the book and showcase real-life social enterprises in North America, South America, Europe, Australia, Africa, and the Caribbean. Discussion questions also support reflection and learning. A downloadable workbook offers support with checklists, social impact measurement, and other areas. An instructor manual containing test questions and experiential exercises is also available as a digital supplement for adopters. This book is ideal for introductory courses in social entrepreneurship and community development. It will also be valuable for those involved in social enterprises on the ground."
Friday, August 19, 2022
Miranda Perry Fleischer (San Diego) has a chapter titled The morality of charitable bequests in a the new book Inheritance and the Right to Bequeath: Legal and Philosophical Perspectives (Routledge 2022). Here is the abstract for the chapter:
Although discussions of inheritance law and policy focus on private bequests to family members, decedents also bequeath large sums to charity – roughly $42 billion in 2020 in the United States alone. The place of charitable bequests has largely been overlooked in the philosophical literature, which tends to approach inheritance as the transfer of wealth between generations of the same family. Most theorists simply assume, with little discussion, that charitable bequests raise different policy concerns and should be given favourable treatment. This chapter explores the interaction of charitable bequest-giving and two common concerns of inheritance law and policy, namely equality of opportunity and the hereditary transmission of political and economic power over others. It argues that charitable bequests are not equal when it comes to alleviating such concerns, and in fact, some charitable bequests exacerbate them. To that end, priority should be given to charitable bequests that further the head start of the least-advantaged and that do not perpetuate family control over assets.
Thursday, January 20, 2022
Think readers will be interested in the report. It is described as follows: "Philanthropy and Digital Civil Society: Blueprint is an annual industry forecast about the ways we use private resources for public benefit in the digital age. Each year, the Blueprint provides an overview of the current landscape, points to big ideas that matter, and directs your attention to horizons where you can expect some important breakthroughs in the coming year."
‘This year’s Blueprint asks us to consider that many perceived “impossibilities” – think of the major transformations we need to solve our biggest challenges – are indeed possible, and how digital civil society and independent philanthropy can help make them a reality,’ said Bernholz, Senior Research Scholar at the Stanford Center on Philanthropy and Civil Society (Stanford PACS) and Director of its Digital Civil Society Lab.
‘We are in a threshold moment, and civil society, rooted in collective purpose and shared values, has clear opportunities to lead in creating new and better pathways forward.’
Friday, November 12, 2021
Three Books on Giving and Philanthropy: Bernholz on How We Give Now, Breeze In Defense of Philanthropy, and Lechterman on The Tyranny of Generosity
At least three books on giving and philanthropy are coming out this month:
Lucy Bernholz (Stanford) has written How We Give Now: A Philanthropic Guide for the Rest of Us (MIT Press). Here is the summary:
From Go Fund Me to philanthropy: the everyday ways that we can give our money, our time, and even our data to help our communities and seek justice.
In How We Give Now, Lucy Bernholz shows that philanthropy is more than writing a check and claiming a tax deduction. For most of us—the non-wealthy givers—philanthropy can be a way of living our values and fully participating in society. We give in all kinds of ways—shopping at certain businesses, canvassing for candidates, donating money, and making conscious choices with our retirement funds. We give our cash, our time, and even our data to make the world a better place. Bernholz takes readers on a tour of the often-overlooked worlds of participatory philanthropy, learning from a diverse group of forty resourceful givers.
Donating our digitized personal data is an emerging form of philanthropy, and Bernholz describes safe, equitable, and effective ways of doing so—giving genetic data for medical research through a nonprofit genetics organization rather than a commercial one, for example, or contributing photographs to an online archive like the Densho Digital Repository, which documents America's internment of 120,000 Americans of Japanese descent. Bernholz tells us to “follow the money,” however, when we're asked to “add a dollar” to our total at the cash register, or when we buy a charity-branded product; it's more effective to give directly than to give while shopping.
Giving is a form of participation. Philanthropy by the rest of us—across geographies and cultural traditions—begins with and builds on active commitment to our communities.
Running down "do-gooders" has become a popular pastime in recent years. Journalists and academics alike have lampooned and criticized philanthropists and big donors for their charitable activities, which are often characterized as a means of self-aggrandisement or tax evasion. Yet, it is widely acknowledged that philanthropy - from the establishment of Carnegie libraries in the nineteenth century to the recent global health interventions of the Gates Foundation - has played a critical role in both developed and developing societies. In an impassioned defence of the role of philanthropy in society, Beth Breeze tackles the main critiques levelled at philanthropy and questions the rationale for undermining and disparaging philanthropic acts. She contends that although it might be flawed, philanthropy is a sector that ought to be celebrated and championed so that an abundance of causes and interests can flourish.
And Theodore M. Lechterman (University of Oxford) has written The Tyranny of Generosity: Why Philanthropy Corrupts Our Politics and How We Can Fix It (Oxford University Press). Here is the summary:
The practice of philanthropy, which releases private property for public purposes, represents in many ways the best angels of our nature. But this practice's noteworthy virtues often obscure the fact that philanthropy also represents the exercise of private power.
In The Tyranny of Generosity, Theodore Lechterman shows how this private power can threaten the foundations of a democratic society. The deployment of private wealth for public ends may rival the authority of communities to determine their own affairs. And, in societies characterized by wide disparities in wealth, philanthropy often combines with background inequalities to make public decisions overwhelmingly sensitive to the preferences of the rich. Allowing private wealth to dictate social outcomes collides with core commitments of a democratic society, a society in which people are supposed to determine their common affairs together, on equal terms.
But why exactly is democracy valuable? How should these values be weighed against the liberty of donors and the many social benefits that philanthropy promises? Lechterman explores these questions by examining various topics in the practice of philanthropy: the respective roles of philanthropy and government, public subsidies for private giving, the use of donations for political speech, instruments of perpetual giving, the rise in giving by commercial corporations, and "effective altruism" as a guide for individual giving. These studies build to a surprising conclusion: realizing the democratic ideal may be impossible without philanthropy--but making philanthropy safe for democracy also requires fundamental changes to policy and practice.
Monday, December 14, 2020
Current Link to Updates for Nonprofit Organizations: Cases and Materials (Fishman, Schwarz, Mayer 5th Edition)
I have received a couple of messages from adopters of the above casebook asking for access to the most recent student and teacher's manual updates, so here is a current link to those updates: https://faculty.westacademic.
My co-authors and I prepared the updates last summer, but they still contain almost all recent developments. The one major exception is the September 2020 final Code section 4968 regulations (the college and university investment tax). A brief summary of those final regulations that I prepared is available here, and a number of law and accounting firms have also prepared more detailed, publicly available summaries that can be found with a Google search.
Monday, December 7, 2020
The OECD recently issued a report on Taxation and Philanthropy that will likely be of interest to our readers.
The summary provides: "This report provides a detailed review of the tax treatment of philanthropic entities and philanthropic giving in 40 OECD member and participating countries. The report first examines the various arguments for and against the provision of preferential tax treatment for philanthropy. It then reviews the tax treatment of philanthropic entities and giving in the 40 participating countries, in both a domestic and cross-border context. Drawing on this analysis, the report then highlights a range of potential tax policy options for countries to consider."
Saturday, April 18, 2020
In existing news for nonprofit academics, Stanford University Press has published the third edition of the widely respected The Nonprofit Sector: A Research Handbook, edited by Walter W. Powell and Patricia Bromley. Here is the description:
The nonprofit sector has changed in fundamental ways in recent decades. As the sector has grown in scope and size, both domestically and internationally, the boundaries between for-profit, governmental, and charitable organizations have become intertwined. Nonprofits are increasingly challenged on their roles in mitigating or exacerbating inequality. And debates flare over the role of voluntary organizations in democratic and autocratic societies alike. The Nonprofit Sector takes up these concerns and offers a cutting-edge empirical and theoretical assessment of the state of the field.
This book, now in its third edition, brings together leading researchers—economists, historians, philosophers, political scientists, and sociologists along with scholars from communication, education, law, management, and policy schools—to investigate the impact of associational life. Chapters consider the history of the nonprofit sector and of philanthropy; the politics of the public sphere; governance, mission, and engagement; access and inclusion; and global perspectives on nonprofit organizations. Across this comprehensive range of topics, The Nonprofit Sector makes an essential contribution to the study of civil society.
Wednesday, September 4, 2019
In an article entitled "He Ran an Empire of Soap, and Mayonnaise. Now He Wants to Reinvent Capitalism", today's New York Times profiles Paul Polman, the current CEO of Unilever. Under Mr. Polman's tenure, Unilever has stopped issuing quarterly guidance, which is an interesting turn for those of you who follow corporate finance and securities law. The interesting part for this blog, however, is that Polman stopped focusing on short term results and started looking at long term changes, including "a very bold objective to decouple [Unilever's] growth from our environmental impact." In the article, he says "we need to decarbonize this global economy if we want to keep it livable. We need to find an economic system that is more inclusive." To that end, part of the reason Unilever turned down a bid from Kraft Heinz was the significant difference between the two companies on these types of issues of corporate social responsibility and double bottom line thinking.
A few issues came to mind for me as I read this. First, with regard to benefit corporation status, I said to myself, "Interesting that Unilever was able to go there without being a benefit corporation and under, presumably, standard fiduciary duty rules of engagement." The answer to that is that Unilever is apparently two different organizations: Unilever NV is organized in the Netherlands and Unilever PLC is organized under the laws of England and Wales, according to their website , so they may in fact be working under different rules - I'd be curious if anyone knows what fiduciary duty standards apply in these jurisdictions.
Of course, not all benefit corporations are B Corps, and vice versa, so just for fun, I then hit the Google with "Unilever B Corp." My first hit was "Unilever, Multinationals, and the B Corp Movement," featuring a video from none other than .. Paul Polman. Apparently, Unilever will be working with B Lab to look at barriers to B Corp status for mulinationals as part of a new Multinationals and Public Markets Advisory Council. Unilever owns a number of B Corp certified subsidiaries, including Ben & Jerry's and Sir Kensington's, an "upstart condiments maker" according to one industry blog (I'm not really sure what an upstart condiment is ... anyone had Sir Kensington's? Looks pretty good though....)
The other connection I made harkens back to my post from yesterday, and specifically the book Winner Take All that I mentioned yesterday. One of the themes of Winner Take All was that business elites like to talk about CSR, impact investing, double bottom lines, and all of the jargon that accompanies philanthro-capitalism because it is safe and familiar. Everyone around them comes from a similar business background, so a lack of diversity of thought and training is reinforced. This leads to the singular thinking that business methods can solve social problems, and there are no countervailing voices to say, "Hey, wait a minute..." In the best case scenario, this is myopia. In the worst case scenario, business solutions to social issues are "win-win" - at least to the business - and forestall efforts to reallocate resources away from the business sector to governments in order to address these issues. My problem with Winner Take All is that it was extraordinarily dismissive of those who were involved in philantho-capitalism as being entitled, self-indulgent, or greedy. I think the picture is far more nuanced then that, and it was interesting to read the profile of Mr. Polman through that lens.
Tuesday, September 3, 2019
I found this helpful list of recommended nonprofit readings on the Chronicle of Philanthropy website:
I have read a few of them, have a couple of others on my Nook awaiting my attention (with summer reading time coming to an end and the new semester ... they may be waiting a while), and others that I'm about to add to the stack. I read Winner Take All - I think the central point was important, but found the author's approach to be so judgmental as to overwhelm his argument. I just started Just Giving, and am looking forward to finishing that as part of an article I'm writing (slowly...) on endowments. I think the next up will be Uncharitable.
I'd love to hear any thoughts others might have on these books, and if there are any that you all might add to the list.
Wednesday, May 29, 2019
With summer here and the day-to-day craziness mostly (!) under control, I have the luxury of a few moments of just … thinking. It’s easy to get wrapped up in the text of the Code, the most recent case law, or the scandal du jour (I’m looking at you, NRA). But I rarely have the time to step back and take a wider scope on things.
At this particular moment, it is courtesy of Twitter, which seems somewhat antithetical to big thoughts (literally, given the word count), but one never knows from whence inspiration may come. In the matter of just a few days, a number of Twitter posts came across my feed that connect indirectly in my mind to a larger questions of the role of charity in a democracy.
Twitter post number 1. Nonprofit Quarterly posted an article on its website entitled “The Road Less Traveled: Establishing the Link between Nonprofit Governance and Democracy.”
This article discusses how best practices in nonprofit board governance increase the representation of the various communities served by a nonprofit. The failure to follow these best practices results in a “’democratic deficit’ in board governance- that is, an absence of democratic structures and processes.” Addressing the democratic deficit doesn’t just benefit the charity – it benefits our democracy writ large: “Wider constituent participation in nonprofit governance will not only help citizens develop civic skills and democratic values … .”
Twitter post number 2. The second Twitter post links to a Nonprofit Quarterly podcast that discusses “No White Saviors,” a movement that discusses the impact of race on hierarchy and power in the international charitable economic development space.
This links a Nonprofit Quarterly podcast that discusses “No White Saviors,” a movement that discusses the impact of race on hierarchy and power in the international charitable economic development space. “Those with power hav[e] the resources and capability to make decisions on what should the outcome should be for vulnerable populations.” Podcast at 6:42.
Twitter post number 3. The third post is an interview with Phil Buchanan of The Center for Effective Philanthropy, posted on vox.com, where he responds to criticism of that wealthy philanthropy is undemocratic (set for the more fully in his book, Giving Done Right).
In the interview, Buchanan is quoted as saying:
The structural critiques are important and they play out in our democratic politics. But in the meantime, here we are. We have significant wealth that’s been accumulated in this country. We have endowed private foundations that don’t even have a connection on the board to the original donor. These are institutions that are focused on a mission. They’re focused on the public good. I like working in the day to day, in the practical reality, where there are people with decision-making power to allocate these resources. I want to help them to do it effectively.
I think all of these pieces raise interesting views on the role of power and money and the role of the charitable sector in a democracy. At the end of the Buchanan interview, he specifically asks if we should be subsidizing all of this through the tax code, and specifically the Section 170 charitable deduction (spoiler alert: he says yes, and expand it to non-itemizers).
I’m more interested, however, in the Section 501(c)(3) implications on all of this. Since Section 501(c)(3) is the section that creates the boundaries between that which is charitable (at least, charitable in tax terms) and that which is not, does it make sense for those rules to play a role in policing this issue. One could view the 1969 passage of the private foundation excise taxes as the historical pre-cursor for this discussion, as at least part of the background of that legislation was to minimize the benefit to and the influence of the most wealthy through charitable vehicles. My thoughts aren’t fully formed on this, but I found it an interesting crossing of the Twitter streams in a very short 48 hour period. Any musings and other big thoughts are, of course, most welcome.
Friday, February 15, 2019
Ellen Aprill's Review of Hamburger's "Liberal Suppression: Section 501(c)(3) and the Taxation of Speech"
Ellen Aprill (Loyola-LA) recently posted a review of Professor Philip Hamburger's (Columbia) "Liberal Suppression: Section 501(c)(3) and the Taxation of Speech" at HistPhil.org. HistPhil, which is "a web publication on the history of the philanthropic and nonprofit sectors, with a particular emphasis on how history can shed light on contemporary philanthropic issues and practice." Prof. Hamburger's book argues that, as a constitutional law matter,
... theopolitical fears about the political speech of churches and related organizations underlay the adoption, in 1934 and 1954, of section 501(c)(3)’s speech limits. He thereby shows that the speech restrictions have been part of a broad majority assault on minority rights and that they are grossly unconstitutional.
Friday, February 8, 2019
This Research Handbook provides a comprehensive overview of scholarship on not-for-profit law. The chapters, written by world leading experts, explore key ideas and debates in relation to: theories of the not-for-profit sector, the composition and scope of that sector, not-for-profit organisations and the constitution, the legal conception of charity, the tax treatment of not-for-profit organisations and the regulation of not-for-profits. The book serves to represent not-for-profit law as a field of academic inquiry, and to point the way to future research in that field.
And here is the table of contents:
Part I Theories of the Not-for-Profit Sector
1. A Law and Economics Perspective on Nonprofit Organizations
Richard Steinberg and Brian Galle
2. A Primer on the Neo-Classical Republican Theory of the Non-Profit Sector (And the Other Three Sectors Too)
3. A Charity Law Perspective on a Liberal Perspective on Charity Law
4. The Not-for-Profit Sector: A Roman Catholic View
Fr Brian Lucas
Part II The Composition and Scope of the Not-for-Profit Sector
5. An Overview of the Not-for-Profit Sector
Myles McGregor-Lowndes OAM
6. The Boundary between Not-for-Profits and Government
7. The Boundary between the Not-for-Profit and Business Sectors: Social Enterprise and Hybrid Models
Benjamin M Leff
8. Donor Intention and Dialectic Legal Policy Frames
Part III Not-for-Profit Organisations and the Constitution
9. Not-for-Profit Organisations, Public Law and Private Law
10. Not-for-Profit Organisations and Equality Law
François du Toit
11. Charity Law and Freedom of Political Communication: the Australian Experience
12. Not-for-Profit Law and Freedom of Religion
Part IV The Legal Conception of Charity
13. The History and Future of the Law of Charity
G E Dal Pont
14. Charity in Common Law and Civilian Jurisdictions
Michael H Lubetsky
15. The Heads of Charity in Comparative Perspective
16. Public Benefit Post-Pemsel
Part V The Tax Treatment of Not-for-Profit Organisations
17. Taxation and the Not-for-Profit Sector Globally: Common Issues, Different Solutions
18. Subsidizing Charity Liberally
Miranda Perry Fleischer
19. Ways the Charitable Deduction Has Shaped the US Charitable Sector
20. The Major Tax Concessions Granted to Charities in Australia, New Zealand, England, the United States of America and Hong Kong: What Lessons Can We Learn?’
21. Reforming Tax Policy with Respect to Non-Profit Organisations
Part VI The Regulation of Not-for-Profit Organisations
22. Principles of Regulation of Not-for-Profits
23. Design and Implementation of a Charitable Regulation Regime
24. Redefining the Measure of Success: A Historical and Comparative Look at Charity Regulation
Oonagh B Breen
25. A Regulator’s View
Susan Pascoe AM
Monday, May 7, 2018
Samuel D. Brunson (Loyola University Chicago) has published God and the IRS: Accomodating Religious Practice in United States Tax Law. Here is a brief description:
Seventy-five percent of Americans claim religious affiliation, which can impact their taxpaying responsibilities. In this illuminating book, Samuel D. Brunson describes the many problems and breakdowns that can occur when tax meets religion in the United States, and shows how the US government has too often responded to these issues in an unprincipled, ad hoc manner. God and the IRS offers a better framework to understand tax and religion. It should be read by scholars of religion and the law, policymakers, and individuals interested in understanding the implications of taxation on their religious practices.
Tuesday, January 2, 2018
James Fishman, Stephen Schwarz, and I have written supplemental update memos for our Nonprofit Organizations casebook reflecting the recently passed federal tax legislation. One update is for students and the other is for teachers. Foundation Press should make them available shortly, but for those of you who need them urgently please email any of us and we can send them directly to you.
Sunday, November 19, 2017
Dana Brakman Reiser and Steven A. Dean (both Brooklyn) have written Social Enterprise Law: Trust, Public Benefit and Capital Markets. Here is an overview:
- Controversial thesis: law can make corporations better citizens and make it easier for start-ups to raise capital by preventing insiders from selling out a social mission for increased profit
- Timely analysis: explores potential impact of new crowdfunding rules and increasingly popular hybrid legal forms such as the benefit corporation on the ability of start-ups to raise capital
- Provocative solutions: several chapters show how corporate governance, contract and even tax law can be harnessed to balance public good against private greed
Edward A. Zelinsky (Cardozo) has written Taxing the Church: Religion, Exemptions, Entanglement,and the Constitution (Oxford University Press). Here is an overview:
- Explores the taxation and exemption of churches and other religious institutions, both empirically and normatively
- Reveals that churches and other religious institutions are treated diversely by the federal and state tax systems
- Focuses on church-state entanglements with respect to taxing or exempting churches and other sectarian entities
- Discusses improvements that can be made in legal and tax policy trade-offs, such as the protection of internal church communications and the expansion of the churches' sales tax liabilities
- A clear, balanced, and comprehensive treatment of the topic that is broadly accessible to tax policymakers, lawyers, nonlawyers, judges, tax specialists, and even those with no background in the subject
For a review, see Peter J. Reilly on Forbes.