MARCH 2018

STATE LAW

California

The Attorney General has issued Cease and Desist orders against several major organizations that provide medicine to those in need in under-developed countries. The essence of the claim is that the organizations are using improper valuations. The complaints assert that U.S. values are being used instead of the value of the drug in the market where it is used. The organizations have the right to request a hearing. The State contends that the valuation overstates the proper value and as a result donors are being misled.

Commentary: This is an interesting accounting issue, and one that will hopefully be resolved by fair and impartial hearings.

Source: http://www.thenonprofittimes.com/news-articles/charities-get-cease-desist-california-ag/

Florida

In its hay day, the state’s workplace campaign for state employees brought in over $5 million for state-based charitable organizations. Donations declined significantly after the state dropped the United Way as its fiscal agent and brought in an outside New Jersey vendor. As donations continued to drop, the vendor received an increasing share of the money and by 2014 was netting more than half of all the state employee donations. As a result, the legislature has voted nearly unanimously to terminate the program. The governor is expected to sign the bill.

Source: https://www.tallahassee.com/story/news/2018/03/07/lawmakers-kill-state-worker-charity-effort/398750002/

Maryland

To address the crisis of “food deserts” in the inner cities, the Salvation Army is opening a grocery store in northeast Baltimore. The organization has branded this store DMG Foods (Doing the Most Good) and will provide fresh and affordable produce in an underserved area.

Source: https://salvationarmycm.org/2016/07/06/dmg-foods/

Minnesota

A state-based nonprofit organization has filed a lawsuit against the state for unfairly withholding $1.7 million for minority employment services. Apparently, the grant money was withheld when a financial review found problems with the nonprofit’s recordkeeping practices.

Source: http://www.startribune.com/minneapolis-nonprofit-sues-state-after-grant-money-is-frozen/475607603/

Missouri

As in many states, politics in Missouri can be quite entertaining. In this case, the Attorney General has launched an inquiry into Governor Eric Greitens’ veteran charity which places the Republican Party’s top senate recruit in Missouri on a potential collision course with the state’s Republican governor. The governor is currently facing a felony indictment in St. Louis over an alleged black mailing. A press release from the Missouri Attorney General’s office says “the Attorney General’s Office has an open inquiry into the charitable activities of The Mission Continues, pursuant to the AGO’s enforcement responsibilities under the consumer protection and charitable registration and reporting laws.”

Commentary: The issue in the veterans’ organization is the improper use by Greitens, the candidate, of the charity’s donor file to raise money for his political campaign.

Source: http://www.stltoday.com/news/local/crime-and-courts/missouri-attorney-general-announces-probe-into-greitens-former-charity/article_39eb2cbd-5476-50a6-880e-105a0995fcfa.html

Nevada

Following the tragedy in Las Vegas, a GoFundMe account was established that raised $31.5 million. The administrator of the fund has announced plans to pay $275,000 to the families of each of the 58 people killed in the tragedy. In addition, the fund will pay a maximum amount of $275,000 to another 10 people who were paralyzed or suffered permanent brain damage in the October shooting. A number of people who were not seriously injured also made claims. A total of 532 people will receive some form of compensation.

Source: https://apnews.com/f86f8f9cb1574c3e980b80360d62548e

New Hampshire

An interesting situation concerns the state’s winner of the record Powerball jackpot. In this case, the winner wishes to remain anonymous and signed the ticket in the name of a trust. Most importantly, agents of the winner have announced that she plans to donate as much as $50 million of the amount she received (more than $276 million in a lump sum) to children’s charities over the next several years. The State maintains that the law is clear on the requirement of releasing her name, and failing to publicize her identity could erode trust in the lottery. A court battle is on the horizon.

Source: http://nhpr.org/post/nh-officials-powerball-winner-sorry-rules-are-rules#stream/0

New York

On March 1st, the Metropolitan Museum of Art began charging $25 admission to anyone from outside the state with the exception of students from New York, Connecticut, or New Jersey.

Commentary: Given the challenge of financial stability that museums face, you can expect that other museums of art, not only in New York, but around the country, will be considering a similar approach.

Source: https://www.nytimes.com/2018/03/01/arts/design/metropolitan-museum-of-art-starts-charging-non-new-yorkers.html

Texas

The Houston chapter of 100 Men Who Give a Damn has adopted a “Shark Tank” approach to charitable giving. The group meets quarterly and invites charities to come to the meetings and make only an oral presentation concerning their need and worthiness of support. Members who attend the meeting put up $100 each with the monies being allocated to those charities deemed the most deserving.

Source: http://www.khou.com/article/news/local/houston-philanthropists-use-shark-tank-concept-to-help-local-charities/285-523511468

OTHER MATTERS

Congress

A bipartisan bill has been introduced in Congress to request an appeal of the excised tax on college endowments that could affect more than 30 schools including Harvard, Yale, and Princeton. The tax was created under the tax reform bill in December. There is bipartisan support to undo it.

Source: https://www.wsj.com/articles/which-colleges-will-have-to-pay-taxes-on-their-endowment-your-guess-might-not-be-right-1516271400

IRS

The IRS has issued a notice reminding potential applicants that they must use the current form, dated January 2018, if applying for tax-exempt status. Under Revenue Procedure 2815-5, the user fees for application for a form 1023 or 1024 have been reduced and are now $600.

Source: https://www.irs.gov/forms-pubs/new-fees-with-form-8718-user-fee-for-exempt-organization-determination-letter-request