Last week, I had the privilege of attending the Conference on Charitable Giving at Stanford University, organized by the Silicon Valley Community Foundation and Stanford University’s Office of Planned Giving. The conference focused on developments and emerging practices in philanthropic advising, with breakout sessions for all levels of practitioners and advisors in the field of charitable giving.
Below are some highlights from the interesting sessions I attended:
Martin Hall, Partner at Ropes and Gray, provided an annual update of developments, pending legislation, and cases impacting the sector. Among the many updates, he noted:
- The PATH Act. Signed into law on December 18, 2015, the PATH Act clarified that contributions (of cash or property) to 501(c)(4), (c)(5), and (c)(6) organizations are not subject to federal gift tax. Additionally, the PATH Act imposed new requirements on 501(c)(4) organizations to clarify their tax-exempt classification (within 60 days of formation or by June 16, 2016 if already a pre-existing self-declared 501(c)(4)). However, despite the impending notice deadline, the IRS has yet to publish a notice form and it is unclear how this new requirement will be enforcement by the IRS.
- Substantiation Developments. On September 15, 2016, the Department of Treasury and the IRS issued proposed regulations that would have permitted charities to file an additional return with the IRS to substantiate donor contributions of more than $250 in value. The return would have required the nonprofit to collect the donor’s name, social security number, or other taxpayer ID number. After receiving more than 35,000 opposition letters, the proposed regulations were withdrawn in January 2016.
Breakout Session I: What to Know Before Accepting a Seat on a Nonprofit Board
Barbara Anne Murphy, Partner at Farella Braun + Martel, discussed the duties and responsibilities of board membership.
- When a court considers a claim for a breach of the duty of care, it will generally first look to whether the directors were prepared for the board meetings and whether they were reasonably informed. Barbara stressed the importance of reviewing board materials prior to meetings, attendance (by phone or in person) at those meetings, and taking individual notes to check against the Secretary’s minutes.
- In addition to reviewing the organization’s articles of incorporation, bylaws, governance policies, Form 990s, recent meeting minutes, and other documents related to the organization’s legal status and structure, the individual should consider whether they, personally, have the time and resources to effectively serve the organization before joining the board. Questions to ask may include: When, where, and how often are board meetings held? How long do they last and what is the typical agenda? Is there a formal orientation or board training for new board members? What is the monthly time commitment? What is the financial commitment, if any? What are the standing committees and what do they do? Will I be expected or able to serve on a committee?
Breakout Session II: Doing Well By Doing Good: Exploring Models of Corporate Philanthropy in Silicon Valley
Gisela Bushey, Director of SanDisk Foundation, Patty Nation, Director of Global Corporate and Community Engagement at Xilinx, and Joe Speicher, Executive Director of Autodesk Foundation, participated in an engaging panel that illustrated various models of corporate giving within their respective organizations. Xilinx, for example, has developed a model called “K to Corporate Public-Private Partnership” that provides funding and services to schools near the company’s headquarters, by building partnerships with local nonprofits to strengthen arts, science, and health education within those schools. One theme among all three panelists was employee-centered philanthropy, where employee volunteerism and charitable work is encouraged and supported by the company through matched donations and/or matched employee volunteer time. Gisela’s closing remarks noted the importance of examining a corporation’s philanthropic efforts—looking at what the corporation does and which causes it supports—to understand the corporation’s core values.
Dan Klein, Lecturer of Management at Stanford’s Graduate School of Business, presented a fascinating keynote on how one’s habitual “status” (e.g, whether dominant or deferential) can affect one’s connections and power within professional, or personal, relationships. Through a series of simulations and games, we learned how certain behaviors and mannerisms can increase or decrease our “status” and connection. For example, to maintain high status and high connection within a situation, one might try to maintain eye contact, take up space, breathe fully, keep one’s head still, use smooth movements, and initiate physical and psychological contact.
Breakout Session III: Charity Supervision and Enforcement by the California Attorney General (AG)
Elizabeth Kim, the Supervising Deputy Attorney General, provided a brief overview of the AG’s oversight responsibilities and enforcement programs. Some notable points from her presentation include:
- The AG’s authority is set in the government code, or the “Uniform Supervision of Trustees for Charitable Purposes Act”, and gives broad authority to allege, and enforce against, violations in the corporations code, the penal code, the tax code, the probate code, and common law, against charitable corporations, unincorporated associations, and charitable trusts, including foreign corporations (corporation formed under the laws of another state) transacting business in California. We have previously discussed this application of laws to foreign corporations on the blog.
- By June or July of this year, the AG will have e-filing capabilities for registering and reporting of organizations with 25,000 or less in gross annual revenue. The AG’s office hopes to have e-filing for larger organizations by the fall of 2016.
- Remarking that online solicitation is a hot issue in the AG’s office, Elizabeth pointed to the new AG Guide for Crowdfunding Sites, Charities, and Donors as a helpful resource. She also mentioned that while the AG Guide for Charities is outdated, a new version is being reviewed and revised with the help of local practitioners (including NEO’s Erin Bradrick).
William Meehan III, Lecturer of Management at Stanford’s Graduate School of Business, closed out the conference by discussing strategic philanthropy. He summarized the history of U.S. philanthropy in four eras—industrial, independence, information, and now, impact. He noted that impact investing is growing within even investment firms and private banks, and the need for impact evaluation to improve beyond simply looking to Form 990.
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