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Court Allows Member of Church To Sue for Misrepresentation in Solicitation of Tithes

Divided 9th Circuit Court of Appeals permits member to contest use of tithes for shopping mall
In an unusual case involving the donation of charitable contributions to a church, a divided 9th Circuit Court of Appeals has permitted a member of the Mormon Church to sue for allegedly false and misleading statements by the Church about its use of tithing money. James Huntsman, whose father and grandfather served in high-ranking positions in Mormon Church leadership, annually fulfilled his church obligation to tithe until 2015. Church doctrine teaches that tithing is a commandment from God and members are asked to contribute 10% of their income or profits annually to the Church. Huntsman gave more than $1.4 million in cash between 2003 and 2011 and additional shares of corporate stock...

Director Does Not Lose Standing to Sue For Breach of Duty When Not Re-elected to Board

California Supreme Court reverses appellate court decision, and holds that “continuous relationship” is not required
The California Supreme Court has overruled an appellate court decision that said that a director of a charitable corporation suing other directors for breach of fiduciary duty lost her standing to sue when she was not re-elected to the board during the litigation. ( See Nonprofit Issues® Vol. XXXI, No. 3 .). The Supreme Court has unanimously held that “continuous relationship” is not required to continue the litigation under the state’s Nonprofit Corporation Law. The dispute arose when Debra Turner, one of the directors of the $1.3 billion Conrad Prebys Foundation, objected to the amount of a settlement made by the Foundation with Prebys’ son who was complaining that he had been improperly...

“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rules for “special interest” standing to intervene in a proceeding to change the purpose of a charitable gift are no longer applicable to a completed charitable gift for which a change in purpose is being requested under the Uniform Prudent Management of Institutional Funds Act.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...

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