APRIL 2016

State News

California

Efforts are being made to impact proposed legislation that would require counter intuitive disclosure on each page of a website maintained by a charitable organization if it receives one or more donations from residents in the state of California.

In additional news, the States’ attempt to require disclosure of donors has been held by a federal judge to be unconstitutional as applied. The controversial plaintiff in the suit presented evidence of threats to supporters in support of the challenge. The State has announced its intention to appeal the case to the Ninth Circuit Court of Appeals.

Florida

A longtime charity regulator, Rudy Hamrick, has been named to the Florida Agricultural Hall of Fame. Way to go Rudy!

Indiana

A federal court in the state upheld Indiana’s automated dialing machine statute as constitutional. A nonprofit organization alleged that it violated the First Amendment and earlier the court ruled that the TCPA preempted Indiana law with regard to interstate calls, but the Seventh Circuit reversed the decision and evaluated the constitutionality based on state law. The court found that it was constitutional because the exceptions to Indiana’s prerecorded ban were based upon “implied consent” from recipients of the calls.

Commentary: This case is contrary to a similar case decided in South Carolina.

Iowa

The Daily Beast reports that the $6 million raised by Donald Trump at his speech (rather than debate) is still unaccounted for by the campaign. The money was raised to support veterans.

Commentary: Where is the Iowa Attorney General?

Massachusetts

As incredible as it is, The Harvard Student Newspaper reports that the school has raised $6.5 billion which exceeded its goal for its five-year campaign. The campaign is only halfway over.

Commentary: One wonders how there is justification for charging anyone tuition who can get into this prestigious school.

This year, the Boston Marathon was expected to raise as much as $16 million for charities.

Nebraska

Attorney General Doug Peterson has announced that he has been appointed to serve as co-chairman of a new Special Charities Committee of the National Association of Attorneys General (See NAAG news below).

New Jersey

The legislature is creating a bill that would limit state income tax deductions only for donations to nonprofits that are located within the state.

Commentary: You can imagine what it would be like if every state adopted such an approach. This kind of legislation, assuming there is an incentive to a state income tax deduction, would discourage anyone from supporting a national organization or even their school if they went to school out of state. In addition, there are a number of constitutional issues that would be violated if such a legislation were passed.

New York

A case we previously reported on regarding a $750,000 embezzlement from a nonprofit organization just keeps getting stranger. The executive director of a New York charity who was doused with lye last year in what authorities allege was an attempt to cover up the $750,000 embezzlement is suing the organization’s board, claiming it negligently failed to prevent the assault. The court complaint further accuses the charity’s board of directors of negligent hiring practices and hiring non-independent auditors.

According to the Wall Street Journal, an investigation being conducted by the Federal Bureau of Investigation is now including a nonprofit tied to the current New York mayor.

Tennessee

Senate Bill 1566 clarifies what constitutes educational institutions which are not subject to charitable registration and further extends registration filing for those organizations that file an extension to file their own 990s with the IRS past the IRS due date. This is needed legislation.

Texas

The question in a recent Texas case is whether volunteers can be guilty and responsible for creating a hostile work environment. In this case, an employee resigned claiming that the volunteers made it impossible for the plaintiff to work at the organization. The volunteers claimed immunity under the Texas Charitable Immunity and Liability Act. The trial court granted summary judgment and the case was affirmed on appeal. In part, the court noted that the only contact between the plaintiff and the defendants occurred when they were actually acting as volunteers and, as a result, the Act fully applied.

Other Matters

NAAG News

A new committee has been formed by the National Association of Attorneys General co-chaired by Nebraska Attorney General Doug Peterson and Connecticut Attorney General George Jepsen. Other members of the Committee include the Attorneys General of Colorado, Kansas, New Hampshire, Utah, and Vermont. The first meeting of the committee was held in April and was formed to promote transparency and accountability in the charitable sector and promote the responsibilities of state Attorneys General and ensure that public interest and charitable funds and purposes are upheld and protected.

U.S. Senate

Legislation entitled “Charities Helping Americans Regularly Throughout the Year Act” (S.2750) has been introduced by Senators John Thuen (R-SD) and Ron Wyden (D-OR). The bill has a number of positive features including, but not limited to, the requirement of electronic filings of IRS form 990s and the expansion of the IRA charitable rollovers to donor advised funds. It would also simplify the private foundation excise tax to a flat 1%, among other items. The future likelihood of passage is not yet known.

USPS

In Announcement 16-12, the Postal Service stated that on April 28, 2016 in Dulles, Virginia they will issue the USA nondenominational nonprofit organization stamp.