Lead Stories

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rules for “special interest” standing to intervene in a proceeding to change the purpose of a charitable gift are no longer applicable to a completed charitable gift for which a change in purpose is being requested under the Uniform Prudent Management of Institutional Funds Act.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

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.

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.”

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.

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.