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“Special Interest” Standing Doctrine To Contest Gifts Abrogated Under UPMIFA

New Hampshire Supreme Court says donor’s estate may not intervene in proceeding to modify use of bequest
The Supreme Court of New Hampshire has held that the traditional rules for “special interest” standing to intervene in a proceeding to change the purpose of a charitable gift are no longer applicable to a completed charitable gift for which a change in purpose is being requested under the Uniform Prudent Management of Institutional Funds Act. It has denied the executor of an estate the right to intervene in a contest seeking to modify the use of a charitable bequest. The case arose out of a 2002 bequest from the estate of Robert T. Keeler to Dartmouth College. He left half of his estate to the College to upgrade and maintain its golf course, but said that his executor could transfer any...

Howard University Alumni Lack Standing To Contest Violation of University Bylaws

Court says school is not a charitable trust and amendment of complaint would be futile
When Howard University amended its corporate bylaws during the Covid-19 pandemic, various alumni of the University filed suit to stop the changes. After 18 months of litigation, the U.S. District Court for the District of Columbia has dismissed the complaint without leave to amend. Howard was incorporated in the District of Columbia by act of Congress in 1867, vesting the governance of the school in its board of trustees. The statute gave the board “all powers and authorities” conferred on the University, including the power to adopt bylaws not inconsistent with the laws of the United States. In 2021, the trustees amended the bylaws dealing with the election and removal of directors,...

Coalition Asks IRS to Require Disclosure Of Charity Board Demographics

More than 140 leaders and organizations submit Open Letter, ask others to support proposal to ask question on Form 990
A Coalition of leaders from the fields of higher education, healthcare, philanthropy, law and nonprofit governance has asked the Internal Revenue Service to require large public charities to make public the composition of their governing boards. In an Open Letter, the Coalition for Nonprofit Board Diversity Disclosure specifically asks the IRS to include on the annual Form 990 tax return a question about “the gender and racial/ethnic demographics of their boards, based on how board members self-identify.” It further supports “including LGBTQ+ and disability disclosure.” More than 140 organizations and individuals interested in the governance and operation of nonprofit organizations and...

Why Is It Important to Have Diversity on Boards?

When Jane Scaccetti, one of the signors of the Open Letter asking the IRS to require large public charities to disclose the composition of their governing boards, was the only woman on the board of a for-profit business, the board was considering the features it could provide and promote for a 24-hour towing service for stranded motorists. The men talked about their towing capabilities and the company’s ability to repair the cars towed in. Scaccetti reminded them that a woman stranded in a broken-down car at 2 a.m. in the morning is probably concerned more about her immediate personal safety than whether the towing company could fix the car the next day. A woman might be more concerned that...

Tax Court Declines Chance to Define Boundary of 501(c)(4) Exemption

Group denied exemption because primary and substantial purpose is to benefit commercial insurers and health care providers
The Tax Court has declined to take the opportunity to decide whether a “substantial” non-qualifying purpose is sufficient to deny exemption as a 501(c)(4) social welfare organization or whether the non-qualifying activity must be the “primary” activity of the organization. In affirming an Internal Revenue Service denial of exemption to an Accountable Care Organization in Texas, the Court said that its activities “primarily benefit commercial [health insurance] payors and healthcare providers and thereby constitute a substantial nonexempt purpose precluding [the organization] from qualifying as an organization described by section 501(c)(4).” Memorial Hermann Accountable Care Organization (...

Court Lacks Jurisdiction To Expunge Criminal Record

Large donor argued he had lost ability to participate in many philanthropic efforts because of conviction
James Batmasian, a self-described person of extraordinary wealth with a history of substantial charitable giving, claimed that his 2008 conviction for failure to pay federal withholding taxes has caused “exceptional difficulties and hardships” to his “pioneering philanthropic endeavors” and his “desire to be proactive” with charity. Despite the fact that then-Florida Governor Rick Scott restored his civil rights in 2017 after he had served his time and that then-President Donald Trump pardoned him in 2020, he claimed that the conviction on his record impaired his First Amendment rights to give away his wealth and participate in charitable activities. The Florida real estate developer...

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