Wednesday, January 3, 2024

NRA, Wayne LaPierre go on Trial in New York Jan 8

The NRA, Wayne LaPierre and three other NRA leaders go on trial on Monday January 8 based on the lawsuit filed by New York State Attorney General Letitia James back in August 2020.

A New York state appeals court affirmed a decision by Justice Joel Cohen from June 2022 rejecting the NRA's effort to dismiss the suit on First Amendment retaliation and selective enforcement grounds.

Judge Cohen had previously dismissed the effort by James to dissolve the NRA in a March 2022 ruling.

From the New York Times:

"But now, Mr. LaPierre, 74, faces his gravest challenge, as a legal showdown with New York’s attorney general, Letitia James, goes to trial in a Manhattan courtroom. Ms. James, in a lawsuit filed amid an abrupt effort by the N.R.A. to clean up its practices, seeks to oust him from the group after reports of corruption and mismanagement.

Much has changed since Ms. James began investigating the N.R.A. four years ago. The organization, long a lobbying juggernaut, is a kind of ghost ship. After closing its media arm, NRATV, in 2019, it has largely lost its voice, and Mr. LaPierre rarely makes public pronouncements. Membership has plummeted to 4.2 million from nearly six million five years ago. Revenue is down 44 percent since 2016, according to its internal audits, and legal costs have soared to tens of millions a year.

When the N.R.A. filed for bankruptcy in Texas nearly three years ago, the step was part of a strategy to move to the state amid the New York investigation. But a Texas judge dismissed the case, saying the N.R.A. was using the filing “to address a regulatory enforcement problem, not a financial one.” Now, longtime insiders say, the organization may be reaching a point where a legitimate bankruptcy filing is necessary."

Philip Hackney

January 3, 2024 in In the News, State – Judicial | Permalink | Comments (0)

Thursday, December 21, 2023

$10 Billion Intersection of DAFs, Crypto, NFTs, and the UN's Sustainable Development Goals

DownloadA Chronicle of Philanthropy article titled The $10 billion charity no one has heard of, republished by AP, highlights a large dollar intersection of several modern developments, including donor-advised funds (DAFs), blockchain-enabled assets such as cryptocurrency and nonfungible tokens (NFTs), and the United Nations Sustainable Development Goals. From the story:

The SDG Impact Fund, based in Cartersville, Georgia, grew from $238 million in assets in 2020 to $10 billion in 2021. That eye-popping growth, which seems to have been fueled by the meteoric rise of cryptocurrencies and digital art assets, has prompted some questions from philanthropy and tax experts.

Those questions relate to common concerns about DAFs, including anonymity of donors and the lack of a required payout to operating charities, the connections of board members of the charity (SDG Impact Fund) to the crypto industry, and questions about valuations of donated cryptocurrency and NFTs that likely constitute much of the almost $10 billion in reported 2021 noncash contributions. The payout level is especially low, representing less than 0.1 percent of its asset base in 2022.

Lloyd Mayer

 

December 21, 2023 in In the News | Permalink | Comments (0)

Tuesday, December 19, 2023

Federal Grand Jury Indicts Former Sacramento Goodwill CEO for Allegedly Diverting $1.4 Million

Logo-400x88The Sacramento Bee reports that a federal grand jury indictment unsealed last week charges the former chief executive officer of Goodwill Industries of Sacramento Valley & Northern Nevada for wire fraud and identity theft charges arising from his alleged diversion of $1.4 million in funds from the charity for his own benefit. More specifically, the indictment contains "nine counts of wire fraud, aggravated identity theft and three counts of monetary transactions with proceeds of specified unlawful activity." The article reports that the charity, which is not named in the indictment, fired the CEO in July 2021 after a routine audit discovered a series of questionable transactions, which triggered an internal investigation by the Board of Directors. The DOJ also issued a press release, with a link to the indictment.

While we do not have all the details, it is refreshing to see that a charity's internal controls caught up to the alleged wrongdoing despite the CEO's reported extensive attempts to hide them. And it is reassuring to see a charity's board act promptly and thoroughly to address the discovered irregularities.

Additional coverage: CBS News Sacramento; KCRA.

Lloyd Mayer

December 19, 2023 in Federal – Executive, In the News | Permalink | Comments (0)

Tuesday, December 12, 2023

Pell Grants and Wealthy Universities

This morning, Inside Higher Ed reported on a bipartisan House bill that would allow students in short (8-14- week) career training programs to receive Pell Grants. There has been some controversy over the idea--questioning, for example, whether the short-term training would pay of and whether students at for-profit programs should have access--but support for the move has been growing.

But the House's "Bipartisan Workforce Pell Act" (which honestly, what a disappointing name: "BWPA" doesn't spell anything; I'm old enough to remember when Congress came up with an acronym and then awkwardly stuck in words that would spell that acronym!) included one surprise: its funding mechanism.

See, the expansion is potentially expensive. So the House decided that, to fund it, the bill would remove eligibility for Pell Grants from any student attending a school subject to the excise tax on university endowments (basically, any school that has an endowment of $500,000 or more per student; it applies to an estimated 50 schools). 

I'm not going to give a blow-by-blow of reasons different groups support or oppose the bill--Inside Higher Ed's article does an excellent job with that. I will note, though, that it faces a steep climb when it arrives at the Senate. And also, that it seems to reflect a bipartisan skepticism of the value of elite higher education. Where will this go? We'll have to watch.

Samuel D. Brunson

December 12, 2023 in Current Affairs, Federal – Legislative, In the News | Permalink | Comments (0)

Monday, December 11, 2023

Bellevue Hospital and Bariatric Surgery

Bellevue_Hospital_front_gate_jehLast week, the New York Times published a story on Bellevue Hospital (the one in New York, not the one Google sometimes seems to prefer in Bellevue, Ohio). The short version is this: Bellevue Hospital has ramped up its bariatric surgeries, which has become a financial boon: it gets reimbursed at least $11,000 per surgery and the surgeons who do bariatric surgery get paid at least in part based on the number of surgeries they perform (in contrast to the other doctors at Bellevue, who get paid a salary). These incentives, the Times says, have encouraged the hospital to perform more bariatric surgeries with less lead time on people less likely to meet the standards for receiving such surgeries.

And I'll note here that the hospital denies the bad implications of the story.

Continue reading

December 11, 2023 in Current Affairs, In the News | Permalink | Comments (0)

Wednesday, December 6, 2023

Is the OpenAI Kerfuffle the Nonprofit Law Story of the Decade?

I’ve been stewing over the power struggle at OpenAI for a couple of weeks, not sure what to think about it. It is either the biggest nonprofit law story of the decade, or not. And, unfortunately, we may never know which it is.

For those not in the know, OpenAI is the company that release ChatGPT about a year ago, revolutionizing the public perception of how far advanced AI technology is, and deeply freaking out professors who give open-internet exams. I didn’t know before a couple of weeks ago that OpenAI is a nonprofit/for-profit joint venture, and therefore a subject of academic interest to me, even if it doesn’t end up creating the robot overlords I will one day serve.  OpenAI, Inc. was created as a 501(c)(3) organization in 2015 “to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by the need to generate financial return.” (That’s quoted from OpenAI Inc.’s first Form 990). OpenAI, Inc. raised over $130 million in tax-deductible contributions for that mission. However, according to OpenAI’s website, “[i]t became increasingly clear that donations alone would not scale with the cost of computational power and talent required to push core research forward, jeopardizing our mission.” So, in 2019, OpenAI Inc. formed a joint venture with for-profit providers of equity capital (almost exclusively Microsoft), which is naturally called “OpenAI.” (They then began referring to the original OpenAI Inc. as “Nonprofit OpenAI,” not to be confused with a wholly owned subsidiary of Nonprofit OpenAI that serves as the “manager” of OpenAI called OpenAI GP LLC). A couple of weeks ago, OpenAI’s board fired its founder Sam Altman for undisclosed reasons. Altman was immediately hired by Microsoft, many employees and key figures in OpenAI threatened to leave (possibly to go to Microsoft) unless the board re-hired Altman, which it immediately did as part of an agreement under which most of the board would be replaced by new board members.

If this is the nonprofit law story of the decade, it’s because of the federal law of nonprofit joint ventures. First it is important to distinguish between inurement (the possibility of nonprofit insiders benefiting themselves) and private benefit (the basis of the IRS’s rules about nonprofit joint ventures). My fellow blogger posted some thoughts on the risk of inurement in the OpenAI story, an issue I have worried about in general as well. But the OpenAI story is probably not primarily an inurement story; it is more likely a story about “private benefit.” The law on private benefit deals not primarily with the risk of insiders providing themselves with financial benefits, but rather with the risk that a charity could be diverted from its core charitable mission for other reasons, including benefiting outsiders. The worry is that, even without insiders financially benefiting themselves, the charity might abandon its mission. The law of joint ventures is derived from this doctrine, and at the risk of wild simplification, that doctrine can be summed up in a single word – control. In a string of revenue rulings and court cases in the late 1990s and early 2000s, the defining characteristic of a joint venture was determined to be whether the nonprofit controlled the joint venture. If a nonprofit and a for-profit formed a joint venture to carry out the nonprofit’s charitable mission and also provide profits to other members of the venture, it is permissible so long as the nonprofit effectively controls the venture and impermissible if the for-profit partners effectively control it. There was frustratingly indeterminate litigation about what exactly constitutes effective control on the margin, but it is clear that the nonprofit has sufficient control (as a legal matter) if a majority of the board of the venture is constituted by directors who are “independent,” meaning they have no financial interest in the venture. The control question is even more clear when the day-to-day management of the venture is controlled by a company controlled by the nonprofit rather than a company controlled by the for-profit partners. The embedded assumption is that so long as the venture is controlled by disinterested board members with a fiduciary duty to the charitable mission of the nonprofit, they serve as an adequate check on the nonprofit being diverted from its charitable mission to maximize the financial gains of the partners.

The OpenAI website states proudly that, “[w]hile our partnership with Microsoft includes a multibillion dollar investment, OpenAI remains an entirely independent company governed by the OpenAI Nonprofit. Microsoft has no board seat and no control.” At least formally, OpenAI’s independent board members did not have a financial interest in OpenAI and so were unconflicted in their duty to pursue OpenAI’s charitable mission. If this is the nonprofit story of the decade, it would go like this: OpenAI was created as a nonprofit joint venture, with 130 million dollars of charitable contributions. But, when there was a conflict between the guardians of its charitable mission and Microsoft, Microsoft won. Microsoft's champion, Sam Altman, returned to continue leading the venture, and the nonprofit board members stepped down, leaving the field open to the real goal of maximizing profit. In other words, the joint venture doctrine’s reliance on formal control just doesn’t work. If we care about protecting the integrity of the nonprofit sector, we need to find another legal doctrine to do so.

The key question about the OpenAI kerfuffle then is whether that story is true. I know extremely little about what actually is happening, and the best analysis I’ve found is a podcast by Ezra Klein. The actual best coverage I’ve found is this, but because I have been a fan of Klein and his work for a long time, I care about the fact that Klein says he is not convinced by the depressing nonprofit story I just. For example, he very briefly discusses this issue (at minute 38:18) and takes seriously the idea that Altman’s return is not a concession by the nonprofit board, but instead a victory for the nonprofit in which, after the conflict, “maybe they have a stronger board that is better able to stand up to Altman.” (at 39:20). So, who knows. I assume someone is writing a book about this that will appear in a few minutes and then several minutes after that, we’ll get to watch a pretty exciting movie about it, hopefully starring Jonah Hill (who, by the way, I also think should play Sam Bankman Fried).

In addition to the question of what The Law should do about nonprofit joint ventures in the future, there is an equally intriguing question to me about what for-profit investors will do. We know that Microsoft is the primary for-profit investor in the OpenAI joint venture, and we could be tempted to think about why Microsoft agreed to make a “multibillion dollar investment” in a venture that is expressly devoted to charitable purposes rather than maximizing Microsoft’s profits. I’m guessing Microsoft rarely makes naïve or stupid multibillion dollar investments. Maybe they thought that when push came to shove, their investment gave them sufficient functional control that it would all work out, and maybe their takeaway from the kerfuffle is that they were right. If other investors conclude the same, then I think we may see a significant strain on the credibility of the nonprofit signal. (See my post yesterday if you don’t know what I mean). But what if investors take away the lesson that the kerfuffle was a loss for Microsoft, and they decide to avoid partnerships with nonprofits unless they too deeply value the charitable purpose more than their financial returns? That would be a win for the nonprofit sector.

Then, of course, the most interesting question is why OpenAI was formed as a charitable nonprofit in the first place. I’m hesitant to question Sam Altman’s charitable bona fides, but another founder of OpenAI was Elon Musk, who has very conveniently become an easily recognizable villain in the years since OpenAI’s founding. We don’t know who contributed the 130 million dollars of charitable funds that the OpenAI Nonprofit raised over the years, but one wonders what exactly these contributors were thinking. Why did Elon Musk, for example, think that a charity was a better “investment” in the future of AI technology than a for-profit company, given that he’s had some success with for-profit companies? The media coverage has a lot of speculation on that score, but I’m still unsure which of it is true and which is not. I’m looking to you, Jonah Hill, to get to the bottom of this.

Benjamin Leff

December 6, 2023 in Federal – Executive, In the News, Web/Tech | Permalink | Comments (0)

Wednesday, November 29, 2023

A Follow-Up on Late Night Musings: More on The Charitable Act

Lo and behold, I opened up Tax Notes Today (subscription required) this morning and found an article on the Charitable Giving Coalition’s position on the renewal of the above the line charitable deduction, which I discussed in my post yesterday.

The Tax Notes article notes that the Charitable Giving Coalition sent a letter to the House Ways and Means Committee and Senate Finance Committee in support of The Charitable Act. The Charitable Act reinstates the above the line charitable deduction, increases the limitation from $300 to one-third of the then standard deduction, and permits gifts to donor advised funds.  In support of the need for the Act, the Charitable Giving Coalition noted in its letter (cited in Tax Notes) that

Giving trends from 2020 and 2021, when the temporary non-itemizer charitable deduction was in place, indicate the deduction works. According to the Fundraising Effectiveness Project, charitable gifts of $300 — the cap of the temporary deduction in 2020 — increased by 28 percent on the last day of the year. Furthermore, interim Internal Revenue Service data for tax year 2021 shows 47 million households used the non-itemizer charitable deduction for donations totaling around $18 billion. A higher deduction cap, as included in the Charitable Act, would encourage even more charitable giving in communities across the country.

While I am generally in favor of reviving the above the line deduction, I’m dubious that this thinking holds. The primary beneficiaries of the above the line deduction are lower and middle income tax payers, If the “universal” deduction (which isn’t universal because it’s not available to those who itemized…) is increased, then the question is whether individuals who don’t itemize have the financial ability to make significantly larger contributions.  There is a marked difference in $300 and $4600, the estimate for the higher deduction.  I’d also be curious to know how much of the $300 giving is giving that’s already occurred and is just being captured for the first time in tax statistics – things like the weekly contributions to the church plate and such not.  Maybe the last $25 dollars given on Giving Tuesday, but I’d be curious where the incentive effect of increase in the universal deduction tails off.  Probably an interesting project to look at…

Curiously, eww

November 29, 2023 in Current Affairs, Federal – Legislative, In the News | Permalink | Comments (0)

Tuesday, November 28, 2023

Some Late Night Reflections on Giving Tuesday

If you are like me, your inbox today is filled with emails from nonprofits looking for donations – Giving Tuesday has been in full swing.  I’ll admit to being somewhat cynical about Giving Tuesday.   I support the charities I support during the year and I don’t need a special day to do it.  I suppose one could see it as a day of penance for the twin orgies of commercialism known as Black Friday and Cyber Monday.  I am, however, without shame and feel no need to buy any indulgences on Giving Tuesday for my recent overconsumption.

But it would appear that I’m alone in my cynicism and that’s a good thing – no one needs curmudgeons like me grumbling about such things!   GivingTuesday.org tracks the impact of Giving Tuesday on charitable donations.   There are a number of interesting observations in the information collected in their Data Commons about giving trends, including the impact of Giving Tuesday.   According to one of their reports, Giving Tuesday enhances giving among supporters, grows existing relationships, and importantly, engages younger volunteers.

Givewp.com, citing the 2022 GivingTuesday.com study, states that

  • In 2022, donors in the United States gave $3.1 billion on Giving Tuesday, 15% more than in 2021
  • More than 20 million people gave, with 6% more donors in 2022 than in 2021
  • 82% of nonprofits that participated in Giving Tuesday tried something new
  • #GivingTuesday trends annually on social media
  • More than $1 billion of U.S. Giving Tuesday donations were contributed online

That lead me to think about a potentially tax law significant change that occurred between 2022 and 2021 – that being the sunset of the $300 above the line deduction for cash charitable gifts from the CARES Act.  It seems like that particular deduction would be beneficial to the folks that Giving Tuesday targets – smaller, younger, and online donors.  That deduction hasn’t been in effect for 2022 and 2023, but there is at least some noise about trying to bring it back.  There have been a number of bills trying to revive and maybe even increase the deduction – you can find a summary of them at the Charitable Giving Coalition website here.   The most recent bill would reinstate the deduction for 2023 and 2024 but increase the limit to 1/3 of the standard deduction.

Who knows what the future of the above the line deduction is, given that all of the tax cuts that are facing sunset will be revisited here in due time.   In a world where the increased standard deduction remains and fewer people itemize, the above the line charitable deduction has its merits, especially among younger and less wealthy donors.   That being said, Roll Call reports that the Joint Committee on Taxation estimates that the above the line charitable deduction cost $2.9 billion in 2021, which is a pretty significant chunk of change.

While we wait to see what the tax writers will do… it’s now 11 pm eastern on Giving Tuesday – there’s still time to support your favorite charity, even if you won’t get an above the line deduction for it.

Grumpily guilted into generosity, eww

November 28, 2023 in Current Affairs, Federal – Legislative, In the News, Studies and Reports | Permalink | Comments (1)

Wednesday, November 22, 2023

Founder of Christian Health Care Sharing Ministry Pleads Guilty to $8 Million Wire Fraud Conspiracy

6a00d8341bfae553ef02b751757181200b-320wiFollowing up on an earlier post that reported federal authorities had shut down section 501(c)(3) Medical Cost Sharing Inc., the U.S. Department of Justice has announced that the founder of this charity has pleaded guilty to conspiracy to commit wire fraud and making false statements on a tax return. According to the press release:

[Craig Anthony] Reynolds admitted that he and his co-conspirators used false and fraudulent promises to market Medical Cost Sharing as a “Health Care Sharing Ministry” to defraud hundreds of “ministry members.” Reynolds and his co-conspirators collected more than $8 million in member “contributions,” yet paid only 3.1 percent in health care claims so that they could personally profit and take most of the members’ contributions for themselves

Of course health cost sharing ministries do not automatically qualify for section 501(c)(3) status, for the reasons discussed in the recent IRS ruling discussed by fellow blogger Darryll Jones earlier this week. But this case highlights that even when they do appear to qualify, problems can still arise from their actual operations.

Coverage: KMBC; Medium.

Lloyd

November 22, 2023 in Federal – Judicial, In the News | Permalink | Comments (0)

UCLA Sues Mattel for Allegedly Failing to Make Good on $49 Million Pledge

Download (17)According to the L.A. Times (subscription required), UCLA and related entities have filed a lawsuit against Mattel for failing to make good on a 2017 pledge to donate $49 million to the UCLA children's hospital over 12 years. Mattel had previously given $25 million to support the children's hospital, in exchange for naming rights. While UCLA Health initially agreed to allow the company to suspend payments because of asserted financial issues, the company's profits in recent years and this year's Barbie movie success led to the lawsuit when payments did not resume. In defense, Mattel is asserting that the donation related to a new hospital tower that UCLA Health is no longer committed to building.

UPDATE: Thanks to fellow blogger Darryll Jones, I now have a link to the complaint in this case.

Additional coverage: CBS News; KTLA.

Lloyd Mayer

November 22, 2023 in Federal – Judicial, In the News | Permalink | Comments (0)

Saturday, November 11, 2023

990 Data Repository Goes Live

Download (16)From an email sent by the Aspen Institute Program on Philanthropy and Social Innovation:

A centralized repository of raw 990 data is now freely accessible to the nonprofit sector! Through the GivingTuesday 990 Data Infrastructure Site, this Data Lake provides the sector with timely, consistent, and complete 990 data, supporting much-needed foundational infrastructure for US nonprofits.

As the first stage of our sector-leading collaboration announced in August, the Data Lake is a centralized and regularly updated dataset built to serve the sector's 990 needs. 990 tax form data is a core pillar of knowledge and accountability in the US nonprofit sector and until recently, this information was either difficult to access or unsuitable for the majority of the nonprofit sector.

Although this is just the first iteration of a broader, multi-stage project, it would not have been possible without the generous support of Schwab Charitable and the collaborative efforts of GivingTuesday, the Aspen Institute’s Program on Philanthropy and Social Innovation (PSI), Charity Navigator, CitizenAudit, the Urban Institute, ProPublica’s Nonprofit Explorer, and Candid.

We’re excited about the next steps and opportunities for this project, which will include an automated pipeline that pulls in data as soon as it's released by the IRS, online tools to work with and investigate 990 data, precut datasets for facilitated use, and a relational datastore to facilitate and empower future research. We welcome input as we continue to improve and strengthen the dataset, working towards our goal of making 990 data accessible and useful to the sector at large.

Lloyd Mayer

November 11, 2023 in In the News | Permalink | Comments (0)

Lenkowsky: Universities and anti-Israel groups may find their nonprofit status under scrutiny

Download (14)Leslie Lenkowsky (Indiana University) has published an Opinion piece in the Wall Street Journal (subscription required) titled Terrorism and Tax Advantages: Universities and anti-Israel groups may find their nonprofit status under scrutiny. In this piece, he analyzes the constitutional and practical issues raised by recent calls from members of Congress and others to re-examine the tax-exempt status of universities, student organizations, and other groups that have been critical of Israel's actions in the wake of the terrorist attack by Hamas. He also notes that arguments made in the past to support challenging the tax-exempt status of hate groups may also support today's challenges to the tax-exempt status of anti-Israel organizations.

Lloyd Mayer

November 11, 2023 in In the News | Permalink | Comments (0)

Zelinsky: The Case for Taxing Nonprofit Hospitals

Edward_zelinsky_2019Following up on his 2022 article The Commerciality of Non-Profit Hospitals Requires Them to be Taxed: Bringing the Debate to a Conclusion, 42 Virginia Tax Review 401, Edward A. Zelinsky (Cardozo) has written The Case for Taxing Nonprofit Hospitals, Tax Notes, Oct. 24, 2023. From the Introduction:

Despite the label “nonprofit,” the contemporary nonprofit hospital is an essentially commercial institution, indistinguishable from its taxed, for-profit competitors. To enhance fairness and efficiency, similar institutions should be taxed similarly. Because the profitable operations of nonprofit hospitals today resemble the remunerative activities of for-profit hospitals, the federal income tax and the states’ income, sales, and property taxes should tax all of these hospitals in the same way.

Lloyd Mayer

November 11, 2023 in In the News, Publications – Articles | Permalink | Comments (0)

Thursday, November 9, 2023

A New Way for Nonprofits to Fix Broken Markets?: Civica Rx

Download (21)KSL TV recently reported "Utah nonprofit pharmaceutical company is fixing the market, producing 80 drugs." The company is Civica Rx. Launched five years ago, its stated purpose is "to reduce and prevent drug shortages and the price spikes that can accompany them" by "mak[ing] quality generic medicines accessible and affordable to everyone." As detailed in its Form 990 filings, it is tax-exempt under section 501(c)(4) and was approaching $100 million in gross revenue in 2021. Does its emergence help confirm law and economics theories about the role of nonprofits when there are apparent market failures? It would certainly be an interesting case study to explore. 

Lloyd Mayer

November 9, 2023 in In the News | Permalink | Comments (0)

Wednesday, November 8, 2023

States & Hospitals: Minnesota Law Enhances Charity Care Requirements

Download (13)Several media outlets reported last week that a new Minnesota law designed to increase public access to existing hospital charity care programs has just taken effect.  The provision was part of a lengthy health care bill enacted by the state legislature (picture: Minnesota State Capital) earlier this year.  Article 4, Section 40 of the bill contains the relevant provision, including this subdivision:

Subd. 4. Prohibited actions. A hospital must not initiate one or more of the following actions until the hospital determines that the patient is ineligible for charity care or denies an application for charity care:

(1) offering to enroll or enrolling the patient in a payment plan;

(2) changing the terms of a patient's payment plan;

(3) offering the patient a loan or line of credit, application materials for a loan or line of credit, or assistance with applying for a loan or line of credit, for the payment of medical debt;

(4) referring a patient's debt for collections, including in-house collections, third-party collections, revenue recapture, or any other process for the collection of debt;

(5) denying health care services to the patient or any member of the patient's household because of outstanding medical debt, regardless of whether the services are deemed necessary or may be available from another provider; or

(6) accepting a credit card payment of over $500 for the medical debt owed to the hospital.

Coverage: CBS News Minnesota; Health Care Dive; Star Tribune.

Lloyd Mayer

November 8, 2023 in In the News, State – Legislative | Permalink | Comments (0)

Monday, November 6, 2023

Proposed Class Action for Solicitation Fraud Filed Against LDS Church

Download (12)We previously reported about the August 2023 Ninth Circuit decision reinstating John Huntsman's claim against the Church of Jesus Christ of Latter Day Saints (more on that decision here) and the March 2023 survival in the face of a motion to to dismiss of a civil RICO claim against the LDS Church by another disgruntled donor. Now a different set of unhappy donors have filed a proposed class action against the LDS Church.

The thrust of their complaint is that the Church told them that their donations would be used immediately for charitable purposes, including "humanitarian relief," but instead some or all of their donations became part of a now multi-billion dollar endowment. The specific claims filed in the U.S. District Court in Salt Lake City include breach of fiduciary duty, fraud, and unjust enrichment. The docket is available on Pacer, but I have not been able to find a copy of the actual complaint that is not behind a paywall. 

Coverage: AP; Law360 (subscription required); NY Post.

November 6, 2023 in Federal – Judicial, In the News, Religion | Permalink | Comments (0)

Friday, October 20, 2023

Major DAFs Support Anti-Vax Organizations

Yesterday, Rolling Stone reported that Fidelity Charitable and the Vanguard Charitable Endowment Program had given millions of dollars to organizations that push vaccine misinformation, including RFK Jr.'s Children's Health Defense

And how did two of the largest public charities in the U.S. give money to anti-vaccination groups? As DAF sponsors.

But wait, you might say. DAFs? DAFs are controlled by individual donors who decide where the money goes. The sponsor is basically only the holder of the dollars.

Continue reading

October 20, 2023 in Current Affairs, In the News | Permalink | Comments (0)

Friday, October 13, 2023

Building an Open Form 990 Data Clearinghouse

Download (9)Last last summer, several organizations announced the formation of a collaboration to build a clearinghouse for IRS Form 990 data. Here is the start of the announcement:

Today, a partnership that includes GivingTuesday, the Aspen Institute’s Program on Philanthropy and Social Innovation (PSI), Charity Navigator, CitizenAudit, and the Urban Institute announced that they have kicked off the building of a clearinghouse for raw, clean, and standardized US nonprofit tax data. This collaboration combines the efforts of nonprofits, scholars, charitable giving data platforms, and many others to more widely share essential information captured on the IRS Form 990.

Lloyd Mayer

October 13, 2023 in In the News | Permalink | Comments (0)

Mother Jones: "Chuck Feeney’s Legacy Is a Lesson for America’s Billionaires"

Download (5)Mother Jones reported on the philanthropy of Charles "Chuck" Feeney, who died last week. From that story:

In 2016, Feeney’s charitable foun­dation pledged the last remaining sliver of his staggering wealth to Cornell, cap­ping an epic three-decade giving streak. All told, starting in the early 1980s, Feeney had doled out $8.6 billion, setting aside a scant $2 million for himself and his second wife, Helga, to live on in their old age. For every $100,000 Feeney gave away, he kept about $25.

Other Coverage: Forbes.

Lloyd Mayer

October 13, 2023 in In the News | Permalink | Comments (0)

Forbes: "Charles Koch Has Given More Than $5 Billion Of His Stock To Two Nonprofits"

Download (3)Forbes reported this week that Charles Koch gave $4.3 billion to 501(c)(4) Believe in People last year and another almost $1 billion to 501(c)(4) CCKc4 in 2020. As noted in the story:

Unlike a traditional 501(c)3 nonprofit–which includes the private charitable foundations commonly used by wealthy individuals–a C4 can own an entire for-profit company indefinitely and (so long as these activities support its principal purpose) benefit private individuals; engage in an unlimited amount of issue lobbying; and get directly involved in politics.

Since 2015, when Congress exempted donations to C4s from the 40% federal gift tax, in a move a Koch lobbyist promoted, a number of other billionaires have donated their entire companies to C4s. The most high profile of them: Patagonia founder Yvon Chouinard, who transferred all of his outdoor clothing and gear retailer’s nonvoting stock to the environmentally-focused Holdfast Collective in September 2022; at the time of the gift, Patagonia was reportedly valued around $3 billion. Koch’s $4.3 billion gift to Believe in People is now the largest publicly disclosed donation to a C4.

Lloyd Mayer

October 13, 2023 in In the News | Permalink | Comments (0)