You are here

Home

Lead Stories

Lead Stories

Fiscal Sponsor Has No Fiduciary Duty To Sponsored Organization

Court says relationship is limited to terms of agreement, denies claim for breach of contract or fiduciary duty
A fiscal sponsor is not liable for breach of contract with its sponsored organization and has no fiduciary duty to the organization when the sponsored program goes bad, the District of Columbia Court of Appeals has affirmed. It has denied claims of the sponsored organization and granted summary judgment to the community foundation that had reluctantly agreed to take on the project. MobilizeGreen was “an upstart charitable organization” when it asked the Community Foundation for the Capital Region to serve as its fiscal sponsor in 2011. It had sought to create a national diversity internship program using funds from the U.S. Forest Service although it had not been recognized as a 501(c)(3)...

Harvard Prof Denied Advance Legal Fees Under University Indemnification Policy

World-renowned chemist accused of falsifying statements about research projects in China was deemed unlikely to be entitled
A world-renowned Harvard chemist has been denied advanced payment of legal fees to defend against charges of making false statements to a governmental agency and failing to report all of his income for tax purposes under the indemnification policy of Harvard University. The advance was originally denied to Charles M. Lieber, former head of the Harvard Chemistry department, by the executive vice president of the University after Lieber had been indicted in 2020 for making false statements to the Department of Defense during an investigation of possible Chinese scientific espionage. He was subsequently indicted for additional tax offenses. The denial was affirmed by a trial court in Boston...

Build Back Better Bill Provides Help For Nonprofit Journalism, Endowments

Tax credits available to support local journalism, universities could eliminate tax on investment income
The Build Back Better Act recently passed by the House of Representatives and sent to the Senate contains innumerable highly publicized programs that will provide billions of dollars in grants for nonprofit organizations. But it included two unheralded provisions that would specifically aid nonprofit local journalism and allow colleges and universities to reduce or eliminate the special excise tax on endowment earnings. Section 138517 of the Bill creates a new payroll tax credit for compensation of local news journalists employed by an “eligible local newspaper publisher,” part of an agenda being pushed by supporters of nonprofit news outlets. Because the credit is applied against...

Named Beneficiary Has Standing To Contest Actions of Trustee

Pa. Supreme Court reverses ruling that denied standing when beneficiary’s payment would not be affected
The Pennsylvania Supreme Court has reversed an appellate court decision and has held that a named beneficiary of a trust has standing to contest the actions of a trustee even where a decision would not affect the beneficiary’s annual payout from the trust. It has held that a violation of the trustee’s duty which affects the beneficiary’s equitable interest in the trust property makes relief available that is equitable in nature, even where the beneficiary cannot demonstrate that she suffered, or will suffer, a monetary loss. Augustus Ashton died in October 1951. In his will, he created a trust to provide fixed annuities to eight family members, with the remainder for certain charitable...

California to Regulate ‘Charitable Fundraising Platforms’

Beginning 2023, state will require registration before enabling solicitation of charitable contributions
After years of uncertainty about the registration requirements for GoFundMe pages, Facebook solicitations, or other internet-based crowd-fundraising methods, California has passed amendments to its charitable solicitation registration act to cover what it calls “charitable fundraising platforms” and “platform charities” and to bring them under regulation by the state Attorney General. As the first of its kind in the nation, even though many of the details are still to be worked out, the new California law is likely to set standards for other states to follow in getting a grip on these types of fundraising that regulators have not known how to deal with before. Like charitable organizations...

Court enjoins provisions regulating professional solicitor

A federal District Court in Connecticut has enjoined the state from enforcing some of the charitable solicitation act provisions regulating professional solicitors pending trial on the constitutionality of the rules. The Court has limited the scope of a preliminary injunction solely to enforcement against the plaintiff in the case, but the ultimate decision could impact the regulation of solicitors generally under state charitable solicitation registration acts. Plaintiff Adam Kissel claimed that the state’s charitable solicitation registration law violates his First Amendment right to engage in speech involving charitable fundraising. He claimed that the state’s definition of “solicitation...

Pages

Subscribe to Lead Stories

Sign-up for our weekly Q&A; get a free report on electioneering

Sign up to receive our regular free content.