Comments for The Nonprofiteer

Comment on Existing forever versus doing some good by Martin Morse Wooster

Martin Morse Wooster — Sun, 28 Apr 2013 23:23:41 +0000

I came across a 2012 post you wrote about why foundations should spend down. I thought it was thoughtful and I am responding to it.

Let me say at the outset: I’m not only a conservative who believes in donor intent, I wrote the only book on the subject. It has gone through three editions and I am working on the fourth. As part of the fourth edition, I am condensing and updating a monograph I wrote in 1998 called SHOULD FOUNDATIONS LIVE FOREVER? THE PROBLEM OF PERPETUITY. If you would like a copy of this, I would be delighted to send it to you.

I think what you want and what I want are not far apart. I would like donors to spend their fortunes in their lifetimes or no later than 30 years after their deaths. I would like donors to do so voluntarily because it is the right thing to do. I am opposed to any mandated increases in the payout rate.

I frequently go to philanthropy seminars at the Hudson Institute and what I find is that in terms of philanthropic practice (as opposed to what donors should spend their money on), liberals and conservatives agree about 85 percent of the time. I think what we are both opposed to is the flabby old foundation who pays out as little as they can legally.

I think the left and the right should learn from each other rather than fight each other, so in that spirit I have written this email.

Comment on Racism, Social Welfare and Government Intervention by Jones sabo and some other

Jones sabo and some other — Fri, 12 Apr 2013 11:29:38 +0000

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Comment on Are you a tax-exempt charity? Sure about that? by Property taxes on nonprofits: the never-ending story | The Nonprofiteer

Property taxes on nonprofits: the never-ending story | The Nonprofiteer — Wed, 27 Mar 2013 17:15:18 +0000

[...] on a poorly-kept secret: often those "charities" are for-profit businesses in sheep's clothing. As the Nonprofiteer pointed out at the time of the Illinois Supreme Court decision requiring Provena…, there's no inherent reason why an exemption for charities need apply to all nonprofits. If [...]

Comment on The ongoing question of what’s really a charity by Property taxes on nonprofits: the never-ending story | The Nonprofiteer

Property taxes on nonprofits: the never-ending story | The Nonprofiteer — Wed, 27 Mar 2013 16:40:16 +0000

[...] Once again, Pittsburgh seems to be leading the way in challenging the property tax exemptions of nonprofits, particularly nonprofit hospitals. While the hospitals and other nonprofits complain that this means municipal officials are so desperate for revenue they'll ignore the good things charities accomplish, in fact the city officials have put their fingers on a poorly-kept secret: often those "charities" are for-profit businesses in sheep's clothing. As the Nonprofiteer pointed out at the time of the Illinois Supreme Court decision requiring Provena Hospital to pay property taxes, there's no inherent reason why an exemption for charities need apply to all nonprofits. If agencies provide charitable services, fine; if they don't, their entitlement to tax exemption is not self-evident. [...]

Comment on Dear Nonprofiteer, Is the banquet deductible? by Nonprofiteer

Nonprofiteer — Wed, 06 Mar 2013 20:18:30 +0000

Sandy, Thanks so much for elaborating on the specifics of the tax laws. The donor-advised fund piece was one I wasn’t clear on, and I’m sure your explanation will be helpful to many people.

Comment on Dear Nonprofiteer, Is the banquet deductible? by Sandy Macnab

Sandy Macnab — Wed, 06 Mar 2013 20:14:28 +0000

As we approach the Spring Gala season, thanks for very clearly describing the IRS prohibition against using a Donor Advised Fund payment for quid pro quo situations, and also for suggesting that the board president should be the one to explain the rules. The IRS also prohibits making campaign pledge payments from a Donor Advised Fund. Payments from Donor Advised Funds are just that – payments – not charitable contributions. The contribution occurred when the donor established the fund. Some donors and board members are surprised and upset to learn this and persist in attempting to get charities to violate the law by providing written acknowledgement as though it were a gift. Some of them very aggressively seek to be credited as having made “gifts” from their fund to purchase raffle tickets, tables at galas, and tickets to golf outings. Donor Advised Fund managers don’t want to run into the IRS problems outlined in code section 4967 which can include a 10% excise tax if they knowingly approve the transaction and that can also subject their donors to an excise tax equal to 125% of the benefit. Fund managers generally make the rules very clear to charities in a letter that accompanies the payment. Sadly, some of them don’t make those rules clear to their donors, leaving the charity to explain what are IRS and Donor Advised Fund rules.

Comment on Dear Nonprofiteer, When is a Board member not a Board member? by Nonprofiteer

Nonprofiteer — Thu, 28 Feb 2013 17:21:56 +0000

Excellent points all, especially the first one: if people are clear about what’s expected of them before they agree to serve, they’ll be less likely to ignore or misconstrue their obligations once they’re serving.

Comment on Dear Nonprofiteer, When is a Board member not a Board member? by Jevan

Jevan — Thu, 28 Feb 2013 15:57:32 +0000

Generally I agree with your reply…including: “The reason you can’t find any relevant policies is that this isn’t an occasion for policies…”

However, I’d add: As Executive Director you might want to reflect on how recruitment of board members happens, do they get a clear job description? Do they sign off on expectations?
Once they become a member of the board do they get a through board member handbook/manual? What training do they receive?

I’m guessing that in this case we could do a better job, and if I were the ED, I’d make it a priority going forward. I’d also try to put in place some method for board continuing education and if you don’t already have one, set up a system where the board as a whole and the members individually evaluate performance. We as professionals need to make better efforts to ensure board member excellence.

Comment on The ongoing question of what’s really a charity by Nonprofiteer

Nonprofiteer — Mon, 25 Feb 2013 20:49:16 +0000

You’re absolutely right, of course–filing a 990 is pretty much the least one can do to fulfill a nonprofit’s legal responsibilities. But I doubt that it genuinely bears on the question of whether the agency is a “charity” and therefore entitled to property tax exemption–seems more like a “gotcha” rule.

Comment on The ongoing question of what’s really a charity by Laura J

Laura J — Mon, 25 Feb 2013 17:36:11 +0000

I know many, many small nonprofits that manage to file their 990s and are otherwise smartly managed. While the ongoing battle between Pittsburgh and its nonprofit community–and the issues it raises–is one worth following, I don’t have much sympathy for any nonprofit that loses its exemption because it can’t manage to file a 990 for three years running.