Tuesday, January 17, 2023

CHaTGPT and Whole Hospital Joint Ventures, Part I

Here are a few paragraphs from an interesting Axios article entitled,  How a Silicon Valley Nonprofit Became Worth Billions:

There are various different ways to make hundreds of millions of dollars, but historically "starting a nonprofit" has not been one of them. Silicon Valley, however, has managed to find a way, at ChatGPT creator OpenAI.

Why it matters: OpenAI pivoted from nonprofit to for-profit status in 2019, a mere four years after it was founded with $1 billion of donations from Elon Musk and others. It's now reportedly in talks to raise $10 billion from Microsoft, much of which is likely to go straight into shareholders' pockets.

The bottom line: OpenAI is a very valuable for-profit company, expertly using hype cycles to maximize the value of its shares.

It has lost the moral high ground, however — and everybody who who funded it while it was a nonprofit has the right to feel a bit aggrieved that they were unwittingly providing seed capital to make Sam Altman and his colleagues even richer than they already were.

In other words, a nonprofit dedicated to advancing the science of artificial intelligence had an initial valuation (as determined by donors) of at least $1 billion.  It is now projecting "net revenues" in the trillions (though that may be an exaggeration, who knows), thanks really to public funded (via tax exemption and deductible charitable contributions) and owned technology.  The nonprofit has converted to a for-profit -- which means net revenues have evolved into profits and donors into investors. The donors -- now investors -- stand to get rich.  Is this right or wrong? This is Part I of a two part post.  Part II comes tomorrow.  

Let's go back to the future to figure this out.  Remember, during the heyday of "managed care," how nonprofit hospitals felt negative economic impacts from insurance companies.  Insurance companies shifted from a fee for service model to a capitation fee model.  Under the former model, health care providers were compensated for each service or treatment ordered up for the patient.  Obviously, a fee for service model allowed for over-consumption of health services on demand.  The fact that health care provider compensation was based on the number of services provided, that they made more money if they ordered more tests or treatments, and the fear of malpractice liability for missing something meant that health care services would be over-prescribed.  There were no limits on health care demand because doctors and patients were essentially permitted to treat healthcare like an "all you can eat" buffet.  Meanwhile, unchecked demand hiked prices and a significant minority were unable to pay for healthcare.  A capitation fee model, where a healthcare providers get only a flat fee per patient (rather than per service), injects market discipline by putting health care providers at risk of loss for over prescribing.  Insurance companies capped what they would pay on a per patient basis, so health care providers might lose money by ordering all sorts of tests or treatments.  Capitation pays one fee per patient no matter how few or many treatments are provided. 

Nonprofit hospitals -- including medical school hospitals --  felt the pinch most of all because they depended on patient revenues (over and above donations) to "cross subsidize" very expensive research or experimental treatments.  Those hospitals might have even charged their non-indigent patients higher fees than those patients might have paid at a for-profit hospital.  Generally speaking, for profits don't have the imperative to get more money to fund expensive research or experimental treatment. Anyway, all of this lead to an increase in formal partnerships between nonprofit health care and for-profit physician practice groups, for example.  The idea boiled down to giving a for-profit partner (the physician practice group) a cut of the nonprofit hospital's revenue, thereby incentivizing that group to use the hospital services.  By doing so, nonprofit hospitals hoped to increase patient volume and revenue sufficient to fund research and expensive experimental procedures.  EO Heads exploded everywhere and eventually the Service issued rulings on so called "whole-hospital" and "ancillary" joint ventures, both of which imposed requirements intending to ensure that in a partnership between a nonprofit hospital and a for-profit entity (either a for-profit hospital or a physician practice group, typically), the nonprofit would continue operating for public rather than private benefit (by subordinating any profit incentive to the charitable purpose), and that literally allowing a for-profit partner to pocket a variable share of the revenue generated by the nonprofit the nonprofit was not engaging in private inurement or excess benefit.  Note the green lines in the picture below.  It shows that the nonprofit hospital is sharing profits with a physician group that has invested in the exempt hospital's operations.  It was this literal economic reality of private inurement -- the for-profit, in exchange for an investment just like a normal shareholder, was taking a share of subsidized profits, just like a normal shareholder -- that lead the Service to coin the phrase "private inurement, per se," discussed at footnote 178 of this article.  

The fretting and gnashing of teeth has pretty much died down since the Service issued its joint venture rulings, perhaps reflecting the changes in insurance reimbursement and hospital patient care practices since the enactment of Obamacare.  I think pretty much everyone felt like few other nonprofit endeavors generated the vast amount of revenue (and the temptation to line private persons' pockets) that nonprofit hospitals do, so there hasn't been much attention paid to the issue since the early 2000's.  

But the arc of the nonprofit universe is long and apparently bends towards . . . well, astronomical wealth.  OpenAI is not a health care organization.  It is a scientific research corporation whose purpose is to develop open source Artificial General Intelligence (AGI).  It was founded when Elon Musk and other rich people "contributed" over $1 billion to support OpenAI's research towards publicly available AGI.  OpenAI is getting a whole lot of attention these days because it has apparently developed AGI known as CHaTGPT, which is touted as artificial intelligence technology that can think (and learn) like a human who never forgets anything and, on top of that, can store and retrieve unlimited information.  Theoretically, a student, or even a professor for that matter, can order up a paper or dissertation on Rawlsian philosophy and whether tax exemption is consistent with that philosophy, for example.  CHaTGPT can spit out the product in short order and that is one of the relatively benevolent uses.  More heads are exploding now!  Open AI is now worth upwards of $30 billion.  And in an explicit move to harness investor capital, OpenAI has entered into a "capped profit" partnership with an entity known as OpenAI Ltd.   OpenAI is the general partner, and private investors are the limited partners.  Google is one of the limited partners, having put up another $1 Billion in investor capital.  In addition to a profit share, Google will be entitled to exclusive use of the technology developed by the partnership.  Open AI calls the partnership a "capped profit entity" because investors are explicitly limited to returns no greater than 100 times their capital contribution.  Net revenues -- or profits -- beyond investor return (the founders are claiming profits will be in the trillions) are devoted to the nonprofit general partner's charitable mission.  One billion times 100 equals $100 billion, by the way.  

So, let's summarize what happened here:

1.  A nonprofit forms to develop remarkable and potentially very valuable open source technology.  We all help pay for their work via tax exemption and charitable contribution deductions so it makes sense that the technology should be open source.

2.  The nonprofit lands a huge charitable donation, generating tax deductions for the donors.  Ok, so far so good, this is how its supposed to work.

3.  The nonprofit successfully develops incredible, tax subsidized technology generating tremendous investor interest.  Fine.

4.  The nonprofit drops the technology into a subsidiary entity (a limited partnership), and sells shares in that entity to private investors who, like any other private investor, expect and are contractually entitled to profits from the exploitation of the technology.  Wait, what?

5.  And by the way, in exchange for Google's investment, Open AI promises Google an exclusive license to the incredible technology.   Who said you could do this?!

In other words, Open AI has entered into a "whole hospital joint venture" and as part of the deal has promised a major investor exclusive access to its tax subsidized intellectual property.  This post is already pretty long, so in my next post I will provide brief analysis and opinion as to whether this arrangement ought to be carefully examined by the Service.

darryll jones

January 17, 2023 in Current Affairs | Permalink | Comments (0)

Friday, January 13, 2023

SBF on Citizens United and Liberal Reporters "Freaking the Fuck Out"


I got a hearty chuckle from this Insider article (and the YouTube video you can listen to by clicking above) noting that SBF was the second largest contributor to Democrats, after George Soros.  I swear this guy is amazingly chatty, forthright and candid to a fault.  I would like to speak candidly in language this precocious kid can understand:  Sam, bro, shut the fuck up!  He reminds me of my dear old mother, who literally has no filter anymore.  Except he doesn't have the sanctuary old age gives us to say whatever we want, whenever we want and, oh yeah, he is looking at serious jail time.  The stories I could tell you.  Anyway, in the interview SBF pushed back on his portrayal as a big Democratic donor, stating that he gave equally to Republicans thanks to Citizens United vs. FEC:  

"I've been their third-biggest Republican donor this year as well," he said. Bankman-Fried explained that this was "not generally known," because "all my Republican donations were dark." He also referred to the 2010 Citizens United case in the Supreme Court that let corporations and outside groups make unlimited political donations. This created financing loopholes because these groups did not have to disclose their donors, giving rise to "dark money" that are called "disturbingly common" by the non-partisan Brennan Center for Justice.

Bankman-Fried said he did so to avoid media criticism, rather than for regulatory reasons.  "Reporters freak the f*** out if you donate to a Republican," he said. "They're all secretly liberal and I didn't want to have that fight, so I made all the Republican ones dark. Despite Citizens United being the literally the highest-profile Supreme Court case of the decade and the thing everyone talks about with campaign finance, for some reason in practice no-one can possibly fathom the idea that someone actually gave dark."

Full of Fluff? MyPillow Ordered to Pay $1M for Bogus Ads

Ha!  But there is a deeper point in his pithy comments that is worth noting.  Maybe Republicans are generally in favor of Citizens United, and Democrats generally opposed because they know that donors are reluctant to give to conservative causes. This, because of our cancel culture that fairly regularly shames people for supporting conservative causes.  I have to admit that I would never buy even a pillow case from "The Pillow Guy," no matter how cheap his prices, or superior his pillows are because he supports what passes for conservativism these days.  Maybe neither side cares about the integrity of the political process or free speech.  Maybe Dems want to repeal Citizens United because doing so will actually reduce donations to Republicans, Republicans want to keep it because they know the same thing.  Dark money allows closet conservatives to donate to unpopular causes or politicians without whatever public ridicule or shaming comes along with doing so.

Have a great weekend, and try not to freak the fuck out.


darryll jones




January 13, 2023 in Current Affairs | Permalink | Comments (1)

Monday, January 9, 2023

Nonprofits Worry About FTX Charitable Donation Clawbacks

CDCROP: Sam Bankman-Fried The Most Generous Billionaire (Nas Daily/YouTube)

Saturday's WSJ had an interesting story about FTX's continuing efforts to recover SBF's (pictured above) charitable contributions to some pretty heavy hitter nonprofits before FTX imploded.  Organizations like Stanford University and Good Food Institute.  Here are a few snippets:

Future Fund, FTX’s primary charitable arm, pledged more than $160 million to more than 110 nonprofits as of September, according to its now-defunct website. Grantees included biotech startups and university researchers working on Covid-19 vaccines and pandemic preparedness studies; programs that provide online resources and mentoring to STEM students in underdeveloped parts of India and China; and a nonprofit building renewable solar panels in communities ranging from Appalachia to the Brazilian Amazon.

Millions of dollars were doled out just in 2022, per Future Fund’s former site, even as crypto prices were crashing. According to the old website: Future Fund pledged $3.6 million to AVECRIS to build the “next generation genetic vaccine platform,” and $5 million to the Atlas Fellowship to support scholarships and a San Francisco-based summer program for high-school students.

One of the largest pledges, according to the old website, was $10 million to biotech startup HelixNano to run “preclinical and Phase 1 trials of a pan-variant Covid-19 vaccine.” 

The Alignment Research Center, a nonprofit focused on machine learning, announced that it will return its $1.25 million grant from the FTX Foundation, saying the money “morally (if not legally) belongs to FTX customers or creditors.” ProPublica, a nonprofit investigative media outlet, said it would return the $1.6 million it received from Building A Stronger Future, Mr. Bankman-Fried’s family foundation.

Many charities have already spent at least a portion of the money received from FTX. A spokeswoman for the Good Food Institute, a nonprofit think tank supporting plant- and cell-based meat alternatives, said it has already spent all the funds it received from two FTX grants. The spokeswoman said GFI’s legal counsel advised that the odds of having to return grant funds were low, based on their grant agreement.

Stanford Medicine received approximately $4.5 million and was promised another $1 million, a spokeswoman said. She said she couldn’t disclose the amount already spent, but said that the school is holding any remaining funds while it waits for legal clarity. 

A major challenge is figuring out when FTX became insolvent—or whether it was ever solvent in the first place. If a donation was made while FTX was technically unable to pay its creditors, those funds may need to be returned due to bankruptcy laws. 

“This case is all about solvency,” said Dov Kleiner, bankruptcy partner at Kleinberg, Kaplan, Wolff & Cohen PC.





January 9, 2023 in Current Affairs | Permalink | Comments (0)

Thursday, January 5, 2023

Nonprofits and Revolutions

Global wealth and income inequality, 2021

I have always thought of the nonprofit sector as a necessary component of capitalism.  Because capitalism requires economic losers and even poverty.  There can be no "winners" without "losers."  Wall Street and Main Street depend on losers.  And, I was never that good in math, but it seems mathematically obvious that one cannot be rich unless someone else is poor.  Capitalism therefore depends on poverty as much as losers.  And nowadays, it seems that the number of poor people necessary for every rich person is only increasing.   

Nonprofits serve one purpose but they have two effects in a capitalist system, one licit and one illicit perhaps.  The purpose is to rescue people from need, especially but not only material need.  Nonprofits raise people from need.  But nonprofits have a second effect beyond relief of need.  By relieving need, they also invariably perpetuate the socio-economic status quo.  This is all high school taught political science so I am not claiming any great insight.  By relieving revolutionary stress caused by the inevitability of losers and poverty, nonprofits reduce the chance of challenge to the socio-economic status quo.  This is all high school tuaght political science (that I have oversimplified, I am sure) so I don't claim any great insight.  But it does force the question whether nonprofits are complicit in the perpetuation of a system that generates the very thing -- material need -- that nonprofits exist to eliminate. 

"The Politics of Poverty:  Elites, Citizens, and States" discusses the importance of civil organizations to stable, conflict free societies.  The report notes that civil society addresses inequalities that fuel revolution, thereby giving disaffected people -- those who economist refer to with cold amorality as "losers" -- hope to participate in the market without resorting to revolution.  Thinking about nonprofits from a political science standpoint perhaps helps draft laws, tax or otherwise, in a way to preserve or eliminate nonprofits' role in passively preserving the status quo.  We might, for example, severely restrict the extent to which nonprofits participate in the political process because we think that is counter to an unacknowledged view that nonprofits ultimately exist to support government.  Our jurisprudence is not that far from the notion.  Or we might greatly liberalize the extent to which nonprofits may be organized as "action organizations," because while we want nonprofits to address immediate material want, we do not necessarily want them putting more bricks in the government's edifice.  So I am looking at material that describes nonprofit roles in maintaining the social compact.  Here is an excerpt from the source linked above:

The research argues that the political settlement is central to all development; and one that does not exclude powerful players is more likely to prevent conflict. But settlements also need to work at the grass roots level, representing the interests of social groups. Security is a precondition for development; this is a matter of survival and must be prioritised in countries recovering from conflict. Evidence presented here shows that in countries where cultural or ethnic groups feel there is economic, political and social inequality, wars are more likely. The future face of insecurity is not restricted to civil wars – more and more people are dying in social violence, particularly in cities [Chapters 2, 3 and 4].

The research looks at how governments can become more inclusive, and therefore more stable. States that are accountable only to some groups or that do not regard some members of society as ‘citizens’ create inequalities that can fuel conflict. When citizens actively participate in society through local associations and movements outside the state, there are benefits to both state and society [Chapters 5 and 6].

The poor, more than any other group, rely on basic public services. For vulnerable families, access to education and healthcare are important routes out of poverty. The politics matters: services work better for the poor when poor citizens participate in reform of service delivery and the research looks at how this can be most effectively achieved. In conflict affected states the provision of services is very sensitive. Service delivery targeting excluded groups can reduce political tensions and improved security [Chapter 7].

DFID-funded research has made a key contribution in drawing attention to the importance of taxation in building effective states. Taxes, raised in ways that encourage economic growth and promote political accountability, build the political legitimacy of the state and offer the eventual ‘exit strategy from aid’. Tax revenues allow states to provide security and public services while prioritising their own (rather than donor) policy concerns. Tax reforms can encourage interest groups in society to mobilise politically – an important bargaining process between state and citizen-taxpayers who perceive they may have a genuine stake in better government [Chapter 8].

Economic growth allows people to escape cycles of poverty and countries to end dependency on aid. But the findings shown here question some of the blueprints donors recommend for achieving growth. Some of the most successful examples of rapid economic growth in the developing world, such as China and Vietnam, have certainly not followed the ‘investment climate’ prescription. Donors may need to acknowledge the political dynamics of growth, including that some forms of informal relationships between business and state in developing countries can succeed in generating and sustaining high levels of growth [Chapter 9].

The report concludes [Chapter 10] with a proposal to improve how the international community commissions and uses governance research, indicates why further governance research is needed, and how DFID plans to respond.  



January 5, 2023 in Current Affairs | Permalink | Comments (0)

Wednesday, December 28, 2022

VIP Treatment at NYU Hospital

NYU_Langone_Medical_Center_(41246168170)Nonprofit and for-profit hospital differ in very few ways--both generally provide the same services and both can be extremely profitable. One dividing line? Charity care. For a federal tax exemption, a nonprofit hospital is supposed to demonstrate that it provides an emergency room open to all, irrespective of ability to pay, and hospital care for all capable of paying, whether they're paying in cash or with Medicaid. (Some states have additional requirements; in Illinois, for example, to qualify for a property tax exemption, a hospital must provide more free and discounted services to certain communities than they would have paid in property taxes during the year.)

As part of its extensive investigation on nonprofit and tax-exempt hospitals, the New York Times reported last week that NYU's emergency room prioritizes VIPs, especially relatives of trustees, donors, and their families. (Unsurprisingly, NYU denies having a VIP program.)

Continue reading

December 28, 2022 in Current Affairs, In the News | Permalink | Comments (0)

Tuesday, December 27, 2022

Hospitals and Politics

Robert-l-IV6Ge9vzmHE-unsplashAs the distance between nonprofit and for-profit hospitals narrows, peoplee hve begun asking whether hospitals should qualify as tax-exempt, a question I'm going to look at over the next couple days. Before we get there, though: almost 60% of hospitals are nonprofit. I assume that a large portion of those nonprofit hospitals are also tax-exempt and, as such, subject to the rules for tax-exempt organizations. Including the campaigning prohibition.

As a general rule, when I think of tax-exempt organizations violating the campaigning prohibition, I think of churches. In fact, I'd probably generally put hospitals at the bottom of my list of violators.

I'd be wrong, though. WTTW and ProPublica have recently looked at Roseland Community Hospital, a nonprofit hospital on the South Side of Chicago. Their investigations focused primarily on patient care and funding issues, but in the course of their investigations, the reporters came across an unexpected issue: Tim Egan, the CEO, has endorsed at least one candidate in his capacity as hospital CEO.

As we spend much of the rest of the week looking at whether hospitals should qualify for tax exemption, it's worth starting out asking whether those that are exempt follow the rules that govern tax-exempt organizations. At least one, it appears, does not.

Samuel D. Brunson 

Photo by Robert L. on Unsplash

December 27, 2022 in Current Affairs, In the News | Permalink | Comments (0)

Thursday, December 22, 2022

Hurry up and Wait: The IRS is Two Years and Half a Million 990s Behind

ProPublica reports that the IRS is about two years and half million 990s behind in its record release:

According to a ProPublica review of public IRS data, which powers our Nonprofit Explorer database, the agency is behind on releasing nearly half a million tax records, known as Form 990s, for tax-exempt organizations. The delays, which began two years ago, are stymying access to key financial information that governments, the public and grantmakers use to evaluate the nation’s tax-exempt companies. The gap in reporting has become so profound that state charitable enforcement officers are sounding the alarm. In November, the National Association of State Charity Officials sent a letter urging the IRS to address backlogged 990 data releases . . .

“For charity regulators, the Form 990 series not only helps ensure transparency and accountability, but also provides vital information for state investigations into potential fraud and misuse of charitable resources,” the organization wrote. “It is critical that the availability of that data be timely.”

Here is an excerpt from the letter from state charity regulators:

The NASCO board strongly supports the public availability of information nonprofits report through the Form 990 series and urges the IRS to address delays in the timely availability of these forms.

The Form 990 series is a critical tool for charity regulators, donors, grantors, and the public. For charity regulators, the Form 990 series not only helps ensure transparency and accountability, but also provides vital information for state investigations into potential fraud and misuse of charitable resources. For discerning donors, the Form 990 is an important source of information to support wise giving practices. For responsible grantors, the Form 990 can be an important tool to examine the financial health of potential grantees and ensure they are in compliance with regulatory obligations.

Lags in the availability of the critical data contained in the Form 990 adversely affect regulators, the public, and most importantly, the nonprofit. Because many NASCO member offices rely on the publicly available versions of Forms 990 submitted to the IRS rather than requiring submission of the Forms 990 to their state offices, it is critical that the availability of that data be timely. We are aware of and have observed significant lags in the amount of time between when charities submit Forms 990 to the IRS and when the IRS posts them. This creates an incomplete picture of a charitable organization when a NASCO office undertakes an investigation of a charity and can lead to confusion for potential charitable donors and others.

Now I know why its hard to find the 2022 return for the Musk Foundation (I rant and rave about Musk's legitimate but unjustifiable tax avoidance via the charitable contribution deduction tomorrow).   



December 22, 2022 in Current Affairs | Permalink | Comments (0)

Monday, December 12, 2022

Can Capitalism and Altruism Ever Co-exist?

After the $32 billion dollar collapse of FTX, the offshore crypto exchange, one has to wonder whether capitalism and altruism can ever co-exist.  Must they be pursued separately lest one corrupt the other?  Vox, the online magazine, has what appears a good looking series of articles on "effective altruism," the feel good movement that partly motivated SBF (Sam Bankman-Fried) to pursue great wealth only to crash and burn in a Delaware bankruptcy court.  Long before that,  Milton Friedman condemned corporate social responsibility (CSR) as a socialist plot.  ESG and woke corporations are the contemporary labels, but the debate is the same (except the R. DeSantis-led attack on Woke corporations is grounded in racism, not just preserving the American way, unless of course racism is the American way).  Occurrences like FTX lend support to efforts to label altruism and concern for social justice as somehow dangerous to capitalism.  But I have not read enough about EA or ESG yet to intelligently comment on the extent to which the morality of charity impacts capitalism.  I teach tax and business, and this past semester I was dragooned into teaching Securities Regulation so I have started thinking again about whether the mad pursuit of profit is still the best way to provide the most stuff for the most people.  I even wrote a short op/ed on the topic.  My local newspaper declined to print it; the editor wanted me to be more strident and angry about racial strife when really I was only trying to make the point that profit-making and altruism need not be mutually exclusive.  SBF has not made that mission easier.    


Recently, and at considerable risk of violating the law, my Business Law students and I debated “corporate social responsibility” (CSR).  CSR is pretty much standard fare in most business law books but it makes for especially lively discussion after Florida adopted Governor DeSantis’ “Stop Woke Act.”  It’s hard to say whether I was violating the law because instead of focusing on slavery, segregation, or DEI, we discussed Ford Inc.’s 1913 decision to cut car prices from $900 to $360 even though Ford was selling cars faster than it could produce them even at the higher price.  “No matter,” thought Henry Ford.  “We pay dividends well over $300 million dollars per year (in today’s dollars), we can be rich and still reduce the price of cars so that every family can afford one.”  Wokeness is not just about Black Lives Matter.  Anyway, Ford envisioned the transformation of an agrarian society into one that, through transportation and logistics, would become the world’s center of industry and wealth. Ford was sued for being woke and lost.  The judge said corporations exist to make profits, not to be concerned with charity and social welfare.  In the mid-1960’s shareholders sued PK Wrigley because he would not install lights around the “Friendly Confines.” Back then the Cubs lost money and games.  Installing lights would surely have increased profits, though maybe not wins, because more people could attend games after work.  But PK worried about tradition and ruining the north side neighborhood ambiance.  PK won because the judge gave a wink and a nod to his wokeness.  During the height of the Vietnam War, Business Executives Move for Peace in Vietnam (BEM) took out full page ads against the war even as the military industrial complex generated skyrocketing profits.  BEM was a nationwide group of highly placed woke CEOs and business leaders.  One ad stated, “we have killed, wounded or burned more than one million children” in Vietnam.  A nonprofit group purchased shares in Dow Chemical, Inc. and began agitating from within to stop Dow’s manufacture of napalm.  Napalm was a legal product generating incredible profit, but it had horrendously indiscriminate effects on Vietnamese women, children, and old folk.  The famed economist Milton Friedman wrote a passionate condemnation of CSR that year.  Like DeSantis today, Friedman argued that CSR was mere ruse to convert America to socialism.  His argument was crudely articulated but his defense of amoral capitalism was not without validity.  I assigned Friedman’s essay so that my students would better debate the costs and benefits of corporate capitalism, with its pursuit of profit as the best way to lift all boats.  I tend to believe JFK’s mantra, that the legal pursuit of profit provides the most benefit for the most people.  This despite the left’s ability to pejoratize “trickle down economics” as effectively, if not more, than the right’s continuing efforts to pejoratize “woke” today.  In the 80’s corporations began divesting from South Africa in protest of apartheid, though doing so cost shareholders huge profits from cheap black labor.  Today, corporations face pressure from all sides regarding ESG – business policies that consider corporations’ impact on environment, social justice, and [democratic] governance (ESG).  DeSantis even attacked Disney for daring to say something about social justice when all Disney really did was "tsk-tsk" about DeSantis' "Don't Say Gay" law.  My class vigorously debated CSR as it relates to a variety of topics, including corporations’ use of slave labor in Nazi Germany, profits from legal but lethal products like cigarettes and opioids, and yes even diversity training in the workplace.   The CSR – now Woke or ESG – debate is both legitimate and nothing new.  Whether corporations should stay in their profit-making lanes, pursue social justice, or engage in culture wars is a valid but old debate.  




December 12, 2022 in Current Affairs | Permalink | Comments (0)

Wednesday, November 30, 2022

Rev. Jim Wallis: How Congress Can Bring Good News to the Poor This Advent

In an opinion piece in today's Religion News Service, the Rev. Jim Wallis, Director of Georgetown University’s Center on Faith and Justice and the Chair in Faith and Justice at the McCourt School of Public Policy, calls on Congress to bring good news to America's children this Advent by expanding the child tax credit.

Rev. Wallis begins his article by noting that as the season of Advent begins, millions of Christians around the world prepare to mark the birth of a child born on the margins of a great empire. He continues:

As it happens, Advent runs alongside another season of sorts in the nation’s capital: a lame-duck congressional session. Lawmakers aren’t expected to pass much legislation during this time — hence the fowl nickname — but they will likely consider extending Trump-era tax cuts for corporations.

This provides an opportunity — even a moral obligation — to bring good news to American children as well. Congress should not approve any year-end corporate tax breaks without expanding the child tax credit.

In the throes of the pandemic, in 2021, Congress expanded the child tax credit, raising the amount available to the poorest American families up to $3,600 a year per child and allowing the credit to be distributed across the tax year in monthly installments. The measure produced historic results. Even during a global pandemic and economic recession, the expanded credit helped drive the child poverty rate to a record low of 5.2%, according to the Center on Budget and Policy Priorities.

The current Congress allowed the expanded credit to expire at the end of 2021, leading to dire consequences: 3.7 million children, including 2.5 million Black and Latino kids, fell back into poverty. Some believe that number will rise to 4.1 million because of the still-rising costs of food, gas and housing.

According to Rev. Wallis, these numbers represent a deep — and totally unnecessary — moral failure. He laments the fact that

In a nation where millions claim to follow the teachings of Christ, this is strangely un-Christian behavior. In the Gospels, Jesus makes his concern for children crystal clear. In the Gospel of Matthew, he explicitly says that caring about God entails caring for children. “Whoever welcomes a child in my name welcomes me,” he says. 

Yet, says the Rev. Wallis,

In this country, we have constructed safety nets for corporations (in the form of financial bailouts), for farms (federal subsidies) and for retirees (Social Security.) Why haven’t we produced a social safety net for children, our most vulnerable members?

He recounts stories of how the poor have benefited from the expanded child tax credit:

I’ve heard stories about parents who used the tax credit to pay overdue doctor bills, buy new school clothes, fix the family car and pay for internet connections so their children don’t fall behind in school.

One study found that more than half of families that received the child tax credit used the money to put food on the table. Think about that: The politicians who ended this program literally took food from the mouths of children. We know that taking this money away will hurt children, who did nothing to deserve such harm. Research shows that children who live in a family with income below the poverty line display lower levels of educational attainment, poorer health and lower earnings.

Moreover, says the Rev. Wallis, expanding the child tax credit is more than moral; it is also economically sound:

A report from the Joint Economic Committee found that every dollar of CTC payments generates $8 in social and economic benefits, as families spend this money back into the local community. Despite fears that the credit would deter employment, research proved otherwise, with nearly 94% of parents saying they plan to continue working at the same rate or even more.

Reviving the expanded child tax credit isn’t political — it’s about staying true to our moral obligations by giving families the means to survive and thrive.

The line between faith and politics is not always direct, but caring for children should not be a political matter. We have a generational opportunity to alleviate the scourge of child poverty in this country. According to researchers, the child tax credit lifted millions of families above the poverty line, decreased food insecurity by nearly a third and cut child poverty by 40%.

We do not all have to agree on how to fight poverty in this country, but when we see something that works, such as the child tax credit, it makes little sense to stop merely because Congress can’t summon the political will. We have a moral obligation to ensure that every child — each made in the image of God — has the chance to grow and thrive. That is what it means to be “pro-family.”

As he concludes his opinion piece, Rev. Wallis reiterates his theme -- that it would be excellent policy implementation this Advent Season for Congress to expand the child tax credit:

When Jesus began his public ministry, he did so with a simple but profound message. He came, as the prophet said, to “bring good news to the poor.” This Advent, the expansion of the child tax credit would be welcome news for millions of American families.

I agree wholeheartedly with the Rev. Jim Wallis.

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





November 30, 2022 in Church and State, Current Affairs, In the News, Religion | Permalink | Comments (0)

Tuesday, November 29, 2022

Something to Think About on Giving Tuesday...

"Giving Tuesday" is drawing to a close. My iPhone has been sounding off frequently all day as several non-profits have sent me word to "remember them" on this special day. Now that this day is drawing to a close, this report caught my ears (I am visually impaired; nothing catches my eyes anymore).

Monday's NonProfit Times reported that according to a new report from the New York state Attorney General’s office, commercial fundraising firms turn over an average of 73% of funds raised to the nonprofits that retain them. However, the report states, “there is a minority of [fundraising firms that] collect fees so large that charities receive only a small fraction of the total amount donated through a campaign.”    

According to the Times,

The authors analyzed data from 658 fundraising campaigns conducted either entirely or partially during 2021 by for-profit fundraisers in New York. That’s a dip from the 718 campaigns conducted the previous year, a drop attributed to COVID-19-related restrictions. “With vaccine eligibility limited until the second quarter of the year, live fundraising events remained difficult,” report authors wrote. “Charities and fundraisers had to pivot as the pandemic ebbed and flowed.”

The Times goes on to state that the report does not break out whether potential funders were from prospect databases or lists provided by the individual nonprofit. The two types of lists often have different remittance rates. Representatives for the New York state Attorney General’s office did not return messages at deadline seeking clarification regarding whether remittance rates on these types of lists differed.

Here is some more of what the Times had to say:

On the whole, the campaigns analyzed raised more than $1.71 billion, around $248 million more than was generated in 2020, despite the drop in the number of campaigns, according to Pennies for Charity: Funding by Professional Fundraisers, the new report from New York state Attorney General Letitia James’s office. Of that, the nonprofits received just less than $1.25 billion. More than half (60%) of the money raised was generated by two donor-advised funds – Network for Good, which coordinates Facebook-based campaigns, and Eaton Vance Distributors.

The $464 million retained by fundraisers made up 27% of all gross receipts, a percentage that has held more or less steady since 2018. But remittance rates to individual nonprofits varied widely: In 42% of the campaigns analyzed, charities received less than 50% of the funds raised. And in 15%, the expenses generated by the fundraisers exceeded the revenue generated, costing these charities an aggregated $10 million.

The report included at least three other interesting findings:

  • Online funding, which had jumped 21% during 2020, continued its rise, growing an additional 9% during 2021.
  • Millennials, the generation coming into its own as funders, are responsive to peer-to-peer fundraising efforts. Nearly four in 10 (39%) have made donations via social media in support of someone they know.
  • Telemarketing use as a fundraising channel has been dropping. During 2020, 410 campaigns employed telemarketing, a figure that slipped to 401 in 2021. Part of the reason for telemarketing fundraising’s decline might be rooted in its efficacy – for the fundraisers. In 2019, 195 fundraisers retained more than 50% of the dollars collected via these campaigns. By 2021, that number had dropped to 158 fundraisers.

The report is based on the New York state database of charities and fundraising activity records. Individual campaign records include the name of the charity, name of the professional fundraiser, filing year, gross receipts, net remitted to charity, percentage remitted to charity and the amounts of uncollected pledges reported.

This might be something you want to look through as you reflect on all the money you gave away on Giving Tuesday.

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



November 29, 2022 in Current Affairs, In the News, Other, State – Executive, Studies and Reports | Permalink | Comments (0)

Thursday, November 10, 2022

IRS Commissioner Nominee Evokes Memories of Alleged IRS Bias Against Conservative Nonprofits

The Washington Post reports that the White House announced on Thursday that President Biden will nominate Daniel Werfel to lead the Internal Revenue Service, tapping a former budget official to spearhead implementation of key parts of the administration’s economic agenda. 

Mr. Werfel served in the George W. Bush and Obama administrations, working at senior levels of the White House Office of Management and Budget and at the IRS. He was acting IRS commissioner in 2013, taking over after top officials resigned over a controversy involving the agency’s scrutiny of nonprofit groups.

What was the controversy about? 

NPR provides the answer. In an October 5, 2017, report, NPR revealed that in 2013, IRS official Lois Lerner revealed that conservative groups seeking tax-exempt status had been getting extra scrutiny, based on words such as "tea party" or "patriots" in their names. For conservatives, Ms. Lerner's statement confirmed their darkest suspicions: in the Tea Party heyday years of 2009 and 2010, hundreds of groups affiliated with the party had sought tax-exempt status as 501(c)(4) "social welfare" organizations. IRS demands for documents left many of them in bureaucratic limbo for a year or more.

The NPR report revealed that an audit by the Treasury Inspector General overseeing the IRS had found that the agency had targeted not just conservatives but also scores of groups with words like "progressive" in their names. The Treasury Inspector General for Tax Administration, or TIGTA, did the report at the request of a bipartisan group of senators.

The report did not satisfy everyone, particularly supporters of the conservative groups who had sought tax-exempt status during that period. Conservative lawyer Cleta Mitchell, who represented eight groups that were given the extra scrutiny, said at the time that the approval process took far too long. In one case, she said, "the IRS wanted every communication that this organization had made about Obamacare," as the Affordable Care Act is commonly called. 

Mitchell opined that even if progressive groups were targeted, "they didn't get subjected to the kinds of follow-up the Tea Party groups did." Meanwhile, in June 2013, Rep. Hal Rogers, R-Ky., told Fox News the IRS had an "enemies list out of the White House." Also, at a Tea Party rally on Capitol Hill, Sen. Rand Paul said an out-of-control government was "persecuting people for their religious and their political beliefs."

According to the NPR report, 

Then-President Obama quickly cleaned house in the upper echelons of the IRS, but congressional hearings ran more than three years before they spun off into secondary issues, which inevitably included missing emails. Lerner became a target for conservative attacks when she took the Fifth Amendment at a House investigative hearing.

In cleaning house, President Obama appointed Mr. Werfel acting IRS Commissioner. According to the Washington Post, current Treasury Secretary Janet Yellen reacted positively to Mr. Werfel's pending nomination:

Danny’s prior service under both Democratic and Republican administrations, his deep management experience, and his work directing significant transformation efforts, make him uniquely qualified to lead the agency at this critical juncture. Danny’s deep commitment to fairness and making sure government works for all will also be invaluable as we improve the taxpayer experience and eliminate a two-tiered tax system.

John Koskinen, who served as IRS commissioner after being nominated by President Obama, also had words of praise for Mr. Werfel. According to Mr. Koskinen, Mr. Werfel worked effectively with the GOP at the height of the anger over accusations that the tax agency had targeted tea party groups for additional scrutiny. He continued: "Werfel was dropped into the middle of a maelstrom [yet] did a good job of responding positively to congressional inquiries.”

But not everyone is sold on the idea that Mr. Werfel is the best person for the job. The Post reports that at least one leading House Republican on Thursday criticized Mr. Werfel’s performance during that period. According to Rep. Kevin Brady (R-Tex.), the top Republican on the House Ways and Means Committee, "Daniel Werfel was named acting IRS commissioner in 2013 with the goal of restoring credibility and confidence in the IRS after the agency’s shameful targeting of conservative groups. He didn’t succeed in 2013 and I’m concerned about whether he can succeed in 2023 and beyond."

We shall have to wait to find out. If the Senate confirms Mr. Werfel's appointment as IRS Commissioner, he will face many challenges, including the challenge of improving IRS customer service, which struggled amid the pandemic after years of budget cuts. The IRS taxpayer watchdog reported over this summer that the agency had a backlog of 21.3 million returns, and call response rates have plummeted. Only 1 in 10 of the 73 million taxpayer calls for help reached an employee in the last filing season. 

Whatever he does, though, it would be wise for Mr. Werfel to ensure that the IRS does not unnecessarily target nonprofit organizations for extra scrutiny. 

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



November 10, 2022 in Current Affairs, Federal – Executive, In the News | Permalink | Comments (1)

IRS to Hire Over 700 Employees to Help Taxpayers in Person

In an statement issued on its website yesterday, the IRS announced that it is now seeking over 700 new employees to help taxpayers at Taxpayer Assistance Centers across the country. In making the announcement,  Ken Corbin, the Service's Taxpayer Experience Officer and Wage and Investment Commissioner, stated: "This is an important priority to provide more service at the IRS for the upcoming filing season." According to Mr. Corbin, the IRS is "working to have more than 270 walk-in sites properly staffed to provide the help taxpayers need and deserve. This will be the first time in a decade our walk-in sites will be fully staffed." 

The Service's announcement goes on to state that the "increase in staffing is part of much wider IRS improvements enabled by the Inflation Reduction Act funding approved in August 2022, and additional updates on the implementation of the landmark 10-year legislation will be provided soon."

According to the IRS, these 700 new positions will include technical positions such as Individual Taxpayer Advisory Specialists who provide face-to-face assistance in IRS TAC offices and Initial Assistance Representatives, responsible for greeting and determining the needs of taxpayers visiting TAC offices. In addition to the face-to-face representatives and phone assistors, the IRS is also working to hire additional people throughout the agency, not just in taxpayer service areas but in Information Technology and compliance positions – all with a goal of improving the work the IRS does.

The announcement concludes by stating that

All employees must be U.S. citizens and pass an FBI fingerprint check and tax compliance verification. Federal experience is not required. The applicant may have gained experience in the public sector, private sector or volunteer service.

Prospective employees are encouraged to attend an upcoming IRS Careers information session to learn more about the position and requirements, how to apply, and all the benefits of federal service.

The public will undoubtedly welcome the upcoming assistance from the IRS.

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

November 10, 2022 in Current Affairs, In the News | Permalink | Comments (0)

Tuesday, November 1, 2022

Texas Tribune & ProPublica Investigate Churches Politicking

The Texas Tribune and Propublica published an investigation into churches, politicking and lack of IRS enforcement and quote a couple members, including myself, of this blog. From the article:

"At one point, churches fretted over losing their tax-exempt status for even unintentional missteps. But the IRS has largely abdicated its enforcement responsibilities as churches have become more brazen. In fact, the number of apparent violations found by ProPublica and the Tribune, and confirmed by three nonprofit tax law experts, are greater than the total number of churches the federal agency has investigated for intervening in political campaigns over the past decade, according to records obtained by the news organizations." . . . 

"Among the violations the newsrooms identified: In January, an Alaska pastor told his congregation that he was voting for a GOP candidate who is aiming to unseat Republican U.S. Sen. Lisa Murkowski, saying the challenger was the “only candidate for Senate that can flat-out preach.” During a May 15 sermon, a pastor in Rocklin, California, asked voters to get behind “a Christian conservative candidate” challenging Gov. Gavin Newsom. And in July, a New Mexico pastor called Democratic Gov. Michelle Lujan Grisham “beyond evil” and “demonic” for supporting abortion access. He urged congregants to “vote her behind right out of office” and challenged the media to call him out for violating the Johnson Amendment."

Though the story is perhaps not news to those who follow this topic closely, it's a good piece, documenting pretty clear violations of the prohibition on charities from intervening in a political campaign. It has some nice history on the adoption of the amendment that I found useful alone. It also gives nice context for the PACI project where the IRS actually began actively looking at political activities in general, where many of the charities were indeed churches.

Though it is true that the IRS has barely enforced this provision over the years, the fact that there is a large effort among some churches to vigorously move into the politicking space today that is documented in this story is of concern. The biggest policy reason to focus in on this issue is summarized pretty well by the following quote by Andrew Seidel, vice president of strategic communications for the advocacy group Americans United for Separation of Church and State: “If you pair the ability to wade into partisan politics with a total absence of financial oversight and transparency, you’re essentially creating super PACs that are black holes.” 

Philip Hackney


November 1, 2022 in Church and State, Current Affairs, Federal – Executive, Federal – Legislative | Permalink | Comments (0)

Friday, October 28, 2022

S Corporations and Charitable Contributions

In light of the recent changes to the AGI limitations for charitable contributions, it is interesting to explore charitable giving in the S Corporation context.  In 2019, a CPA Journal article noted that unique planning opportunities exist for charitably minded S corporation shareholders.  For example, the rule that limits the pass-through deduction to the shareholder’s basis in S corporation stock and debt is not applicable when the S corporation donates appreciated property to a charity.  Thus, even if a shareholder has a zero basis in his/her S corporation stock, appreciated property donated to a charity would pass through as a charitable contribution.  In effect, the deduction becomes the portion limited by (and reducing) basis, plus the appreciation in the donated property. This interesting article addresses the incentives Congress has provided since 2006, which are still applicable under the TCJA.


Khrista McCarden

Hoffman Fuller Associate Professor of Tax Law

Tulane Law School 

October 28, 2022 in Current Affairs, Federal – Legislative, In the News | Permalink | Comments (0)

Thursday, October 27, 2022

Millennials and Impact Investing

According to an impact investing article from earlier this year, millennials are driving an increasing trend toward impact investment and away from traditional charitable giving.  The article addressees a 2021 study by Fidelity Charitable that revealed millennials are much more likely to engage in impact investing than older investors.  The study examined impact investing and charitable giving among 1,216 US investors, who have at least 25,000 in investable assets from sources other than an employer retirement plan.  Approximately 61% of millennials reported that they had participated in impact investing.  Tellingly, 62% of millennials reported that they believed impact investing has a greater potential than traditional philanthropy to “create long-term positive change.”  In sharp contrast, 72% of baby boomers reported that charitable giving rather than impact investing was the better course to create meaningful change.

Scott Nance, Vice President of Impact Investing at Fidelity Charitable, has remarked, “The trend toward values-based investing will only grow as millennials come to control a larger share of wealth.”  Millennials are focused on having their broader values and social good align with their investments.    The study also revealed that only one third of all investors engage in impact investing.  However, 40% of those surveyed responded that they would consider making their first impact investment in 2022. Of those investors who already participate in impact investing, 41% plan to dedicate an even greater amount to impact investments.

Among the participants, the most cited barrier to participation in impact investing is a lack of knowledge.  Interestingly, of those already participating in impact investing, 42% learned about it from a financial advisor and 30% from an investment firm. The most common vehicles for investment among those surveyed are mutual funds or individual publicly traded companies that meet criteria along environmental, social, or governance themes.  Of these three themes, environmental was at the top with half of impact investors polled citing it as their top concern.   Social themes garnered the second spot with 27% whereas governance themes came in last with 16%.

As discussed in yesterday’s post, it is interesting to note the ways that impact investing may work in tandem with traditional philanthropy.  Fidelity commented upon its Giving Accounts, which allows donors to combine philanthropy with impact investing.  Its Giving Accounts saw a 67% increase in assets allocated to impact investments, raising the total to $3 billion in 2021.  


Khrista McCarden

Hoffman Fuller Associate Professor of Tax Law

Tulane Law School

October 27, 2022 in Current Affairs, Studies and Reports | Permalink | Comments (0)

Wednesday, October 26, 2022

Private Foundations and Impact Investing - Social Issuance Bonds

The U.S. Impact Investing Alliance is an organization dedicated to raising awareness of impact investing in the United States, increasing deployment of impact capital, and collaborating with stakeholders to help build the impact investing ecosystem.  Recently, the Alliance released a study regarding impact investing tools and private foundations.

The authors conclude that foundations can and should more effectively use their balance sheets, even if the tools they are using have different degrees of mission alignment.

For example, the authors argue for greater use of guarantees by foundations.  At the same time, they note that a recent innovation is to combine an investment grade credit rating with a guarantee project. RWJF is one example of a foundation securing a AAA credit rating from S&P and Moody’s in 2021 that in turn allowed it to provide investment grade guarantees.

They also the address social bond issuances. This tool was used to increase several foundations’ programmatic activity in the face of COVID-19, the economic crisis, and increasing racial unrest in the United States. While use of a bond is not new, use of bonds by foundations is new, especially in terms of grantmaking activity.  For example, the Ford Foundation was an early user of bonds, having a $273 million bond issuance in 2017 that was used to finance renovations of its New York City headquarters.  Since 2020, even more foundations have issued social bonds, which include some of the most notable ones, such as the MacArthur Foundation, the W. K. Kellogg Foundation, the Andrew W. Mellon Foundation and others.

The set of three crises--- COVID-19 pandemic, economic downturn, and racial injustice--- was a catalyst for many foundations to utilize social bonds in order to quickly provide a response. However, some foundations specifically issued longer-term bonds, such as the Ford Foundation, and acknowledged this was a “once in a lifetime” event. Others, such as the MacArthur Foundation, issued only ten-year bonds, which suggests they may use bonds as a funding source again in the near future.

Also, the authors note the effect of stock market performance on endowment annual giving. They note that during troubling times, endowments decrease in value as the stock market plummets, which in turn decreases payouts at a time of crisis when they are needed most. This was apparent in early 2020 even though the stock market rebounded relatively soon. Foundation executives anticipated a tightening of their grant budgets in early 2020, so they searched for other ways to increase giving while leaving their endowments untouched.

Finally, the authors address the importance of a strong credit rating. They note that a precondition to fully utilizing the capital market is a strong credit rating which allows an issuer to attract low-cost debt. Notably, the Ford Foundation, Rockefeller Foundation, and W. K. Kellogg Foundation all received AAA ratings from S&P and Moody’s. Because their balance sheets were so strong and given the low levels of leverage and social bond designation, their bond issuances were oversubscribed by both impact and traditional investors. As of now, foundations ranging from 1.6 billion to 17.8 billion have been have issued investment-grade bonds.

Also, interestingly social bond issuance was combined with a decision to hire minority-led underwriting firms in addition to more traditional actors. Some foundations, such as the MacArthur Foundation, engaged minority-led firms like Loop Capital and Seibert Williams Shank. This was an outstanding example of extending the impact of social bond issuance from serving as a mere tool to the social processes as well.

The authors urge foundations to do more with more. By this, they mean to implement new strategies that increase the use of balance sheets for mission as well as to modify existing tools to promote risk-taking, innovation, and field building. They provide examples of many foundations that are already engaging in these steps as a way of encouraging other foundations to expand their breath and for foundations as a whole to more greatly utilize these tools on a regular basis and on a greater scale in the future.


Khrista McCarden

Hoffman Fuller Associate Professor of Tax

Tulane Law School

October 26, 2022 in Current Affairs | Permalink | Comments (0)

Saturday, October 15, 2022

Newman’s Own Billboard

B301B6CE-703C-4B55-A419-98C3CE9306B9This morning, driving back from taking my daughter to school for a cross-country meet, I passed this billboard. And, while it doesn't have any particular legal significance, it struck me as an apropos way to follow up Wednesday's post and my general interest in the interfamilial drama arising out of the Newman's Own Foundation.

The billboard's a little hard to read--the sun was rising in a terrible place for the picture, but it says: "We're not in the food business to get rich. We're in it to enrich kids' lives. Newman's Own: Radically good. 100% Profits to Help Kids."

Have a happy weekend!

Samuel D. Brunson

October 15, 2022 in Current Affairs | Permalink | Comments (0)

Friday, October 14, 2022

Nonprofit News and New Streams of Revenue

Bank-phrom-Tzm3Oyu_6sk-unsplashSomething I've been following for a while is the shift of news reporting from for- to nonprofit. I've even blogged here about it, most recently last October when WBEZ acquired the Chicago Sun-Times.

The deal closed in January, making the Sun-Times the newest entrant in Chicago's nonprofit news constellation. And just last week, the Sun-Times made another announcement: given the critical nature of local journalism, it was dropping its paywall and making all of its online content entirely free.

Since the advent of the internet, newspapers have gone between paywalled and non-paywalled content. Could advertising alone fund journalism?

Continue reading

October 14, 2022 in Current Affairs, In the News | Permalink | Comments (0)

Wednesday, October 12, 2022

F̶a̶m̶i̶l̶y̶ Radio Drama Network

Service-pnp-anrc-15200-15260vLast time I blogged here, I spent several days talking about the family drama surrounding the Newman's Own Foundation. (Here, here, here, and here to be precise.)

Yesterday, the New York Times dropped a story about another family nonprofit drama, this one concerning the Himan Brown Charitable Trust and the aptly named Radio Drama Network (which is also a tax-exempt organization).

Himan Brown created, produced, wrote, and directed radio dramas, starting in roughly the golden age of radio dramas and continuing throughout his long life. While he passed away in 2010 (just shy of his 100th birthday), he, like many, established a legacy: a charitable foundation. That foundation, organized as a trust, provides funds to charitable organizations that further Mr. Brown's legacy.

Continue reading

October 12, 2022 in Current Affairs, State – Judicial | Permalink | Comments (0)

Thursday, September 22, 2022

King Charles III: Britain's New Defender of the Faith

Today's Religious News Service presents an interesting analysis of the new British monarch's task of making the country's rapidly expanding numbers of nonbelievers feel included. The analysis begins by noting that the recently deceased Queen Elizabeth II's funeral was not entirely representative of Britain’s increasingly secular population. The funeral service was held in Westminster Abbey. According to RNS, the "medieval abbey, the sublime music and military processions were all a visual and aural feast, but the event was at its heart a Christian ceremony, with the coffin placed in front of the altar and presided over by robed clergymen."

With this in mind, RNS continues, the Queen's funeral "was not entirely representative of Britain’s increasingly secular population. Even its believers are less likely to be Christian than at the start of Elizabeth’s reign, with 2.7 million Muslims, 800,000 Hindus and a half-million Sikhs, among many other faiths. Christians, who once consisted mostly of various Protestants — chiefly members of the Church of England, the Church of Scotland and the Church in Wales — and Roman Catholics, have been joined by a growing Pentecostal movement and other evangelical churches, according to the BBC."

In Britain, though, the Church of England remains the official, established church, with the monarch as its Supreme Governor, and since Elizabeth’s death on Sept. 8, we have seen it in the ascendant. Yet, there are also signs that the late monarch, now-King Charles III and the Church of England have recognized that the time has come to adjust.

RNS continues its analysis:

In a landmark speech in 2012 at Lambeth Palace, the London home of the Archbishop of Canterbury, the queen said of the Church of England that “Its role is not to defend Anglicanism to the exclusion of other religions. Instead, the Church has a duty to protect the free practice of all faiths in this country.”

She credited the established church with having done so already. “Gently and assuredly, the Church of England has created an environment for other faith communities and indeed people of no faith to live freely,” she said.

The new king has endorsed those words as recently as Sept. 9, the night after his mother died, in his first televised address to the British nation as its king. “The role and the duties of Monarchy also remain,” he said, “as does the Sovereign’s particular relationship and responsibility towards the Church of England — the Church in which my own faith is so deeply rooted.”

But he continued, ”In the course of the last 70 years we have seen our society become one of many cultures and many faiths.”

Nearly 30 years ago, as prince of Wales, Charles articulated concern about other faiths and Christian denominations in modern Britain not feeling included, and controversially suggested that when he became king he should be called Defender of Faiths — plural— rather than the title Defender of the Faith bestowed on Henry VIII by the pope in 1521 and used by England’s monarchs since.

Anglicans reacted harshly to Charles’ gambit, fearing he would not be fully wedded to assuming his role of Supreme Governor of the Church of England when the time came. Even after he rescinded his statement in 2014, the moment haunted Charles. His statement on Sept. 9 came in part to reassure doubters, who then heard him proclaimed king and Defender of the Faith the next day before the Accession Council, who proclaimed him the new monarch.

Then, bit by bit, we saw more evidence of how the king and his advisers, as well as the late queen, through her funeral plans, tried to embrace other traditions.

The Sept. 12 service of thanksgiving for the queen’s life was held at Edinburgh’s St Giles Cathedral, the main church of the Church of Scotland. Representatives of other faiths were in attendance, and the Gospel was read by Mark Strange, primus of the Scottish Episcopal Church, the other main Protestant church in Scotland besides the Church of Scotland.

More surprising, a passage from Paul’s Letter to the Romans was read by Leo Cushley, the Catholic archbishop of St. Andrews and Edinburgh, and included lines often interpreted as encouraging ecumenical dialogue: “We know that all things work together for good for those who love God, who are called according to his purpose.”

When Charles then paid a visit to Northern Ireland, more efforts were made to include the Catholic population, for whom the monarchy has long been a sensitive issue. At St. Anne’s Cathedral in Belfast — where the president of Ireland, Michael Higgins, and Taoiseach (as Ireland calls its prime minister) Micheál Martin were in attendance — Eamon Martin, the Catholic archbishop of Armagh and Primate of All Ireland, offered a prayer; others were said by Methodist and Presbyterian church leaders. At a service during Charles’ stop in Wales, prayers were said by Muslim and Jewish representatives as well as representatives of several Christian denominations.

But a reception at Buckingham Palace for 30 faith leaders on Friday (Sept. 16) — before the new king met any world leaders in London for the funeral, and even before he took part in a vigil with his siblings at the lying-in-state of his mother — spoke volumes about the importance Charles assigns religion in Britain.

Charles welcomed not only the Catholic archbishop of Westminster but Bishop Kenneth Nowakowski of the Ukrainian Catholic Eparchy and Imam Asim Yusuf, telling them that Britain’s sovereign has an “additional” duty — presumably in addition to being Supreme Governor of the Church of England — to protect “the space for faith itself” in Britain. This duty, he said, is “less formally recognized but to be no less diligently discharged.”

He added: “It is the duty to protect the diversity of our country, including by protecting the space for faith itself and its practice through the religions, cultures, traditions and beliefs to which our hearts and minds direct us as individuals. This diversity is not just enshrined in the laws of our country, it is enjoined by my own faith.”

That Charles’ words were backed up by his mother was evident in the state funeral Monday. The specialness of the Church of England and of multifaith, diverse Britain was acknowledged as a procession of religious representatives entered Westminster Abbey in advance of the main funeral party: Jews, Baha’is, Jains, Zoroastrians, Buddhists, Sikhs and Hindus, as well as Chief Rabbi Ephraim Mirvis; Pope Francis was represented by Archbishop Paul Gallagher, the Vatican’s secretary for relations with states.

Reading prayers during the service were the Rev. Iain Greenshields, moderator of the General Assembly of the Church of Scotland; Shermara Fletcher, principal officer for Pentecostal and charismatic relations for Churches Together in England; the Rev. Helen Cameron, moderator of the Free Churches; and Roman Catholic Cardinal Vincent Nichols.

The questions that remain are: "What happens now?" "What shall we see at Charles's coronation?" "Will it be all-inclusive affair, or will it be limited to clergy of the Church of England?" Of great importance also, is whether King Charles III, whose titles include "Defender of the Faith," be a defender of both believers and nonbelievers. After all, in the last British census (2011), a quarter of the population said they had no religion.

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


September 22, 2022 in Church and State, Current Affairs, In the News, International, Religion | Permalink | Comments (0)