Supporting Organizations Under Attack

ABC News ("Wealthy Cash In on Charity Tax Loophole," March 24, 2005) reported that Senate Finance Committee Chairman Chuck Grassley, R-Iowa, stated that supporting organizations are increasingly misused by the wealthy.  Reportedly, Grassley said, "Quite frankly, [it’s] nothing more than a parking place for billions of dollars of assets that are not used for charitable purpose that they were intended to use for."

The article labels the supporting organization a loophole that allows the wealthy to donate expensive assets to such organizations while retaining control of the assets and getting a big tax break while nothing necessarily goes to the needy.  Unfortunately, but not unexpectedly, the article does not adress at all the benefits of a properly structured supporting organization and whether the problem lies in the structure or enforcement of rules governing the structure.