Lead Stories

A booster club fundraising program that allowed parents to meet the mandatory assessment for their children’s participation by raising funds from others has cost the club its 501(c)(3) charitable exemption.  The Tax Court has upheld the IRS’s revocation of exemption.  The Court ruled that the club “operated in a manner that allowed substantial private inurement and promoted private, non-public interests.” The Court concluded that the club did not operate exclusively for charitable purposes.

The Pennsylvania Commonwealth Court has held that communications between Penn State University and the state Secretary of Education, who serves on the University’s board ex officio, are public records subject to disclosure under the state’s Right to Know Law.  But because the Office of Open Records did not determine whether any of the Department’s arguments that statutory exceptions to disclosure applied, the Court remanded the case for further determination of what, if any, records must actually be disclosed.  (Bagwell v Pennsylvania Department of Education, Commonwealth Ct., PA, No. 1916 C.D. 2012, 7/19/13.)

A bankruptcy trustee seeking to recover a $62,500 contribution from a Ponzi scheme cannot recover from the church to which the funds were given when the church was merely a conduit for the gift to a third-party charity.  A Bankruptcy Court in Florida has dismissed the trustee’s claim when the church acted in good faith and passed the funds on as required.  (In Re: Engler, Tardif v. St. John the Evangelist Catholic Church, No. 9:08-bk-04360, 7/17/13.)

An animal shelter that decided not to build a new and expanded facility has been ordered to return a $50,000 contribution from donors who made the gift expressly for the construction of new rooms for large dogs and older cats.  An appellate court in New Jersey, in a harshly worded opinion it said was a case of first impression, said that the penalty was possibly the “most lenient sanction” in a case that could include breach of fiduciary duty and civil fraud.  (

When Kohl’s Department Store initiated a $10 million grant program for schools in the United States in 2010, the Jewish Educational Movement in Beverly Hills, CA, became interested.  Because JEM did not meet the criteria Kohl’s had established for obtaining the award, a rabbi from JEM approached the Netan Eli Hebrew Academy, a nearby school that met the criteria, offering help to Netan Eli in applying for the award that JEM wanted for itself.

A federal District Court in Michigan has granted a preliminary injunction to the St. Vincent de Paul Society and two other charities who have claimed that a for-profit company interfered with their relationships with landowners who had allowed them to place collection bins for used clothing on their property, removed the bins without adequate notice, and destroyed the bins and their contents without adequate opportunity to get them back.  The Court said that the charities showed a likelihood of succeeding on the merits of the case.