Lead Stories

May a 501(c)(3) organization devoted to strengthening African-American communities fire its executive director after she has endorsed a white Jew for mayor without violating antidiscrimination laws?

That’s the question facing a trial court in New York City in a suit brought by Joyce Johnson, the CEO of Black Equity Alliance, who was fired after she endorsed Mayor Michael Bloomberg for a third term as mayor. She sued both the organization and its individual directors for damages.

A trial court in New York has ruled that voting privileges of members of a nonprofit corporation cannot be suspended automatically for failure to pay required dues, despite a bylaw provision it interpreted as providing suspension without notice.  It said the state’s Not-for-Profit Corporation Law required “reasonable notice” to enforce collection efforts.  (Abraham v. Diamond Dealers Club, Supreme Court of NY, NY County, No. 10263/2009, 3/1/10.)

When Katherine Hagan wrote a will in 1994, she provided two specific bequests for friends and left the “residue” of her estate to a trust for the benefit of 13 charities.  She listed specific gifts to each in separate dollar amounts totaling $40,000 and provided that if any of the organizations should not be in existence, the applicable bequest should go to the others equally.  At the time she wrote the will, her residue was expected to be about $40,000.

In 2001, however, a relative passed away and left her a bequest of approximately $830,000.  Because Hagan was not mentally competent to modify her will or execute a new one, she died in 2005 with the same will in effect.  Her residuary estate was then valued at $1.48 million.

A federal District Court in Texas has stricken major portions of a new state law that sought to require for-profit companies that collect clothing and household goods in the name of charities to disclose the amounts actually paid to the charitable organizations they say benefit from the program.  The Court said it was constitutional to require the companies to disclose their for-profit status, but was unconstitutional to require them to disclose how they paid the charities.  (National Federation of the Blind of Texas v. Abbott, N.D. TX, Dallas Div., No. 3:09-CV-1567, 2/1/10.)

We regularly feature answers to questions from readers in our “To the Point” column. The full list can be viewed here. Here are a few questions recently received from readers.

Who determines the value of in-kind contributions? 

Our 501(c)(3) opera company has received donations of items for a fund-raising auction and food and wine for the event.  We have also received meals and costumes for out-of-town performers.  Do we set the values or do the donors? –From the Website.

A charitable foundation that had been dissolved for more than a decade has no standing to challenge the use of a grant made during the 1980s, an appellate court in Florida has held.  The Court has also ruled that the grant did not create either a constructive trust or a resulting trust that was violated when the recipient of the grant modified its use.  (The Foundation for the Developmentally Disabled v. Step by Step Early Childhood Education and Therapy Center, Ct. of App., FL, Second Dist., No. 2D09-686, 3/26/10.)