Bill Somerville, President and Founder of Philanthropic Ventures Foundation, was featured in today’s San Francisco Chronicle (“Philanthropist Goes His Own Way to Find Causes“). I reviewed Somerville’s book Grassroots Philanthropy: Field Notes of a Maverick Grantmaker in a post earlier this year. The article identifies Somerville as “uite possibly the Bay Area’s fastest...
Highlights of the 2008 Western Conference on Tax Exempt Organizations (Part One)
I recently returned from Los Angeles, where I attended the 2008 Western Conference on Tax Exempt Organizations co-sponsored by Loyola Law School and the IRS. As usual, the Conference featured great speakers, relevant topics, and an interesting group of attendees. This year, I had the pleasure of meeting, among others,...
San Francisco Considering Cap on Executive Compensation at City Funded Nonprofits
The San Francisco Chronicle (November 13, 2008) reported that Supervisor Jake McGoldrick is seeking to limit salaries and benefits for executives of San Francisco-funded nonprofits to six times the total compensation of their lowest-paid full-time employee. The proposed law would only apply to how the nonprofit uses city dollars. There are about...
Priorities for a New President – Chronicle of Philanthropy
The November 13, 2008 edition of The Chronicle of Philanthropy included a very interesting special report "Priorities for a New President – Nonprofit leaders offer advice on what Barack Obama can do to aid charities and foundation." Offer Extra Tax Benefits for Gifts to Antipoverty Charities Create a Cabinet-Level Philanthropy...
Tax and Employment Issues Affecting Nonprofits – November 14, 2008
Yesterday, I filled in for an IRS speaker at a continuing legal education program on "Tax and Employment Issues Affecting Charitable Nonprofits" at the Bar Association of San Francisco. Rebecca Benhuri, an associate attorney with Jackson Lewis LLP, focused on the employment issues, and I covered the following IRS areas of interest: Governance...
2008 Philanthropy Roundtable Annual Meeting
The Philanthropy Roundtable's 2008 Annual Meeting, Strengthening Our Free Society, was held in Naples, Florida from November 6-8. The Philanthropy Roundtable is a national association of individual donors, foundation trustees and staff, and corporate giving officers, and its annual meeting provides a forum for its members to share ideas,...
Donor Enforcement of Charitable Gift Restrictions: Smithers Case
The court in Smithers v. St. Luke's-Roosevelt Hosp. Ctr., 281 A.D.2d 127 (N.Y. App. Div. 2001) found that beneficiaries have the right to enforce the actual use of a donor's charitable contribution according to his intent, even after his death. In the case, Mr. Smithers left $10 million to...
Nonprofit Executive Compensation
While charitable organizations are permitted to arrange executive compensation agreements, "unreasonable" compensation to a disqualified person will be considered an excess benefit, subjecting the disqualified person and members of management who approved the transaction to penalties under section 4958 of the Internal Revenue Code known as "intermediate sanctions." The...
Purpose Statement – Nonprofit Articles of Incorporation
A charity’s articles of incorporation must limit the corporation’s purposes to one or more of the exempt purposes set forth in Section 501(c)(3) of the Internal Revenue Code: “religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but...
Cy Pres Doctrine
The term "cy pres" originates from old Norman French meaning "as near as possible". The cy pres doctrine found its legal roots in charitable trusts: if a donor's trust document contains an impossible, impracticable, or illegal objective, courts are given the power to amend the trust, keeping as close...