Celebration of Ellen Aprill

On March 24, 2023, Loyola Law School hosted Festschrift, Live Symposium, and Celebration to Honor Ellen Aprill. A Festschrift (and I had to look this up) is a volume of writings by different authors presented as a tribute or memorial especially to a scholar.

Professor Aprill is a highly esteemed and beloved scholar in the area of nonprofit and tax-exempt organizations law, the founding director of Loyola Law School’s Tax LLM program, and the long-time chair and co-chair of the Western Conference on Tax-Exempt Organizations (WCTEO), my favorite annual conference. She is also an inspirational and giving leader whose help extends far beyond her students and coworkers. I am personally indebted to Ellen for being so kind to me, opening doors and highlighting some of my work. I was so pleased to join the Symposium and Celebration, which featured some of the top scholars in the area of tax-exempt organizations law. The program is available here.

The following are some brief highlights from the Symposium:

Nonprofits, Taxes, and Speech (draft available here)

Lloyd Hitoshi Mayer (author), Eugene Volokh (discussant)

  • Focus on hate speech and fake news (disinformation)
  • Some groups that are focused on these areas of speech have 501(c)(3) tax-exempt status and claim an “educational” purpose, which is defined very broadly in the regulations
  • See IRS Methodology Test reflecting IRS’s long-standing position that the method an organization uses to advocate its position, rather than the position itself, sets the standard for determining whether an organization has educational purposes (see IRS Audit Technique Guide – Educational Organizations Other than Schools)
  • Can anything be done about such speech? – Probably not, if the speech is protected by the First Amendment. First, such limits would be inconsistent with the broad legal definition of “educational” as a 501(c)(3) tax-exempt purpose absent speech promoting violence or other illegal activity or speech expressing views completely unsupported by facts or only by highly distorted facts . Second, such limits would be constitutionally suspect because of the difficulty of providing a sufficiently clear definition of the prohibited or limited speech.
  • Should anything be done even if constitutional? – No. First, we do not want to give government undue power to pick and choose among speakers based on its, or the public’s, preferences of the day. Second, the IRS is ill-equipped to make these determinations.

Strings are Attached: Placing a Spotlight on the Hidden Subsidy for Perpetual Donor Limits on Gifts (description available here)

Roger Paul Colinvaux (author), Edward McCaffery (discussant)

  • Paper’s fundamental assumption is that unlimited giving is better than limited giving.
  • Donors limit their gifts in many ways, by restricting an asset’s use or purpose, controlling the timing of spending (as in an endowment), securing naming rights, or by retaining effective control over the distribution or investment of the asset by giving to a charitable intermediary (e.g., donor advised fund, private foundation).
  • About 2/3rds of assets of the biggest charities in the U.S. are subject to donor limits.
  • Federal tax rules also favor donor limits by treating most donor-limited gifts the same as unrestricted gifts for purposes of the income and estate tax charitable deductions – so there a substantial tax law subsidy for donor limits on gifts.
  • But donor limits also result in several harms, including to the public interest, charitable autonomy, pluralism (e.g., after 2017 TCJA, much lower percentage of donors get tax benefits from charitable contributions), constraining access to resources, compliance costs, and subsidizing gains to donors (e.g., naming rights).
  • Tax reforms can mitigate these harms.  For example, treating donor limits as retained rights (thus eliminating the charitable deduction for such gifts as we do for incomplete gifts and partial interest gifts, possibly tempered by a time limit of the restriction – see ACE Act) or return benefits (but may be difficult to value such benefits), estate tax reform to discourage giving to intermediaries, encouraging unrestricted gifts from intermediaries, and not subsidizing donor limits in connection with any new giving incentive, such as a nonitemizer deduction or charitable giving credit.

A More Capacious Conception of Church (draft available here)

Samuel Brunson and Philip Hackney (authors), Michael Helfand (discussant)

  • Churches (as defined in the tax law) are entitled to tax benefits and more protections than other charities – Is that a product of Constitutional rights or democracy itself?
  • But these benefits and protections come with a cost to churches (by making them susceptible to misuse as tax shelters and political activity shelters and to fraud) and to our democracy (by elevating churches to a higher status than other organizations). 
  • Does Congress get the balance right from a political justice perspective? 
  • Religion is seen by some as co-sovereign with the state, but there are entanglements with their interrelatationship (e.g., tax laws).
  • The First Amendment places significant limitations on the state’s ability to regulate churches, including on their internal deliberations. This autonomy creates the risk that churches may act in ways that undermine democracy. Churches have no constitutional limitation on their ability to influence the deliberations of government. From an ideal democratic perspective, churches as an associational matter ought not interfere with their members’ cooperation with the general democratic order.
  • Law is only one behavior-regulating constraint that can help ensure pro-democratic behavior. Norms, markets, and architecture are also constraints.

The Unknown Consequences of Place-Based Tax Incentives (description available here)

Michelle Layser (author), Deanna Newton (discussant)

  • Tax incentives are a central part of most place-based policy initiatives and community economic development policies. Studies cast serious doubt about place-based tax incentives’ capacity to benefit low-income communities, but the studies have serious limitations, and our understanding of the consequences of place-based tax incentives remains incomplete.
  • Examples of place-based tax incentives: enterprise zones, opportunity zones, new market tax credits.
  • Nearly 30 years have passed since Professor Aprill warned policymakers not to rely on tax incentives to fight urban poverty. We still don’t know any more now about the effectiveness of these place-based tax incentives on low-income communities.
  • Studies don’t reflect whether low-income groups are benefiting form place-based tax incentives or whether improvements are a product of gentrification of the place in question. Many of these tax incentives lack a clear objective to benefit residents of targeted communities through place-based improvements.
  • Measuring overall social welfare rather than just income level would be part of the solution.
  • Strong social networks may be a key measuring area. Need more qualitative measurements.
  • Need more interdisciplinary work and new voices at the table – e.g., urban planners, members of affected communities.

Nonprofit Law at the Tool to Kill What Remains of Campaign Finance Law: Reluctant Lessons from Ellen Aprill (draft available here)

Richard Hasen (author), Justin Levitt (discussant)

  • “Many of the remaining regulations of money in politics could well be struck down as unconstitutional or rendered wholly ineffective by a Supreme Court increasingly hostile to the goals of campaign finance law and extremely solicitous of religious freedom.”
  • The political activity of nonprofits has been used as a wedge to deregulate politics and the campaign finance system.
  • Future deregulation after Citizens United as foreseen by Prof. Aprill (scary stuff) – constitutionality of limits on campaign activities of 501(c)(3) charities; Johnson Amendment overruling and legal challenges to de minimis exception for campaign activities in the cheap speech era (end of the subsidy rationale); churches as sites for political activities and new organizations formed to take advantage of the new rules, leading to 501(c)(3)s taking tax deductible contributions to pay for political activity (diverting money that is currently going to candidates, parties, Super PACs, and 501(c)(4) organizations) and an end to effective limits on big money in elections
  • Solution – require disclosure, which used to be seen as the more narrowly tailored solution to the money in politics problem, but nonprofits continue to be used as a shield against disclosure rules, and the Supreme Court has become especially protective of claims of the First Amendment rights of religious organizations
  • “The line in Citizens United about how the government may not “suppress political speech on the basis of the speaker’s corporate identity” or “impose limits on the political speech of nonprofit or for-profit corporations” was not lost on Professor Aprill”
  • New conservative (GOP) focus on chill, harassment, anonymous speech (for safety of speakers)
  • Prof. Aprill on post-Bonta “exacting scrutiny” — requirement of providing Schedule B information on donors to 501(c)(4) may be found no longer constitutional, which would pose dire implications for the constitutionality of regular campaign finance disclosure rules

Tribute and Celebration

  • Professor Aprill was honored by her family, her academic colleagues, her tax practitioner colleagues, and her former students.
  • All mentioned her “legendary” generosity and kindness in addition to her brilliance, academic curiosity, humor, and leadership.
  • Ever humble, Professor Aprill talked about her luck and good fortune in having the career she has had.
  • My final thoughts: We should all aspire to be more like Professor Aprill.