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NOTES
Оглавление1 1. Throughout this book, the Internal Revenue Service is referred to as the IRS.
2 2. These are the organizations described in section (§) 501(c)(3) of the Internal Revenue Code of 1986, as amended, Title 26, United States Code (IRC).
3 3. These are the organizations described in IRC § 501(c)(4).
4 4. 38 Stat. 166. The income tax exemption for charitable organizations originated in the 1894 statute (28 Stat. 556, § 32), which was declared unconstitutional in Pollock v. Farmers' Loan and Trust Co., 157 U.S. 429 (1895). In general, see McGovern, “The Exemption Provisions of Subchapter F,” 29 Tax Law 523 (1976); Bittker and Rahdert, “The Exemption of Nonprofit Organizations from Federal Income Taxation,” 85 Yale L. J. 299 (1976).A companion book by Bruce R. Hopkins describes the federal tax law as it applies to nonprofit organizations. Tax-Exempt Organizations, Chapter 1, contains a fuller analysis of this aspect of public policy and of the independent sector.
5 5. Income Tax Regulations (Reg.) § 1.501(c)(3)-1(d)(2).
6 6. Cobb, The Rise of Religious Liberty in America, 482–528 (1902); Lecky, History of European Morals (1868).
7 7. Torpey, Judicial Doctrines of Religious Rights in America, 171 (1948).
8 8. E.g., Trustees of the First Methodist Episcopal Church v. City of Atlanta, 76 Ga. 181 (1886); Trinity Church v. City of Boston, 118 Mass. 164 (1875).
9 9. Walz v. Tax Commissioner, 397 U.S. 664, 673 (1970).
10 10. Trinidad v. Sagrada Orden de Predicadores, 263 U.S. 578, 581 (1924).
11 11. St. Louis Union Trust Company v. United States, 374 F.2d 427, 432 (8th Cir. 1967). Also Duffy v. Birmingham, 190 F.2d 738, 740 (8th Cir. 1951).
12 12. H. R. Rep. No. 1860, 75th Cong., 3d Sess. 19 (1939).
13 13. McGlotten v. Connally, 338 F. Supp. 448, 456 (D.D.C. 1972).
14 14. Green v. Connally, 330 F. Supp. 1150, 1162 (D.D.C. 1971), aff'd sub nom. Coit v. Green, 404 U.S. 997 (1971).
15 15. Rabin, “Charitable Trusts and Charitable Deductions,” 41 N.Y.U. L. Rev. 912, 920–925 (1966).
16 16. Saks, “The Role of Philanthropy: An Institutional View,” 46 Va. L. Rev. 516 (1960).
17 17. “Proposals for Tax Change,” Department of the Treasury, Apr. 30, 1973, at 72.
18 18. Fink, “Taxation and Philanthropy—A 1976 Perspective,” 3 J. C. & U. L. 1, 6–7 (1975).
19 19. Friendly, “The Dartmouth College Case and the Public–Private Penumbra,” 12 Tex. Q. (2d Supp.) 141, 171 (1969).
20 20. Giving in America—Toward a Stronger Voluntary Sector (1975). All quotations herein from the Commission's report are by permission.
21 21. Id. at 9–10.
22 22. Rockefeller 3d, “America's Threatened Third Sector,” Reader's Digest, Apr. 1978, at 105, 108.
23 23. These quotations in fuller form, and others, are collected in O'Connell, America's Voluntary Spirit (New York: The Foundation Center, 1983).A companion book by Bruce R. Hopkins, Starting and Managing a Nonprofit Organization (7th ed.), addresses this point in additional detail and traces the origins and development of a hypothetical charitable organization to illustrate applicability of the various laws, including fundraising regulation requirements.
24 24. These data are from Giving USA 2021: The Annual Report on Philanthropy for the Year 2020, published by the Giving USA Foundation and researched and written by the Indiana University Lilly Family School of Philanthropy. One set of commentators observed that the “story of philanthropic giving in 2020 was as complex as the year itself,” noting that “[g]iving rose 3.8 percent despite a global pandemic that upturned daily life, prolonged but uneven economic fallout, and renewed attention to civil rights and racial justice” (Stiffman and Theis, “Giving Grew in a Tumultuous Year but Not for All. What's Ahead in 2021?,” 33 Chron. of Phil. (No. 9) 28 (July 2021)).
25 25. IRS, Statistics of Income Bulletin (Spring 2021).
26 26. Hopkins, The Nonprofits' Guide to Internet Communication Law (Hoboken, NJ: John Wiley & Sons, 2003), Chapter 4.
27 27. Daniels and Narayanswamy, “Digital Giving Goes Mainstream,” 26 Chron. of Phil. (No. 13) F-1 (May 22, 2014).
28 28. Daniels and Narayanswamy, “Online Giving Grows More Sophisticated,” 26 Chron. of Phil. (No. 13) F-3 (May 22, 2014).
29 29. 26 Chron. of Phil. (No. 13) F-4 (May 22, 2014).
30 30. “Click, Click, Cash?,” 27 Chron. of Phil. (No. 9) 10 (May 2015).
31 31. Id. at 11, 12, 14, 16, 19. In general, “The Best of Online Fundraising,” articles beginning on pp. 9, 10, 12, 14, 16, 18, 20, and 22, 28 Chron. of Phil. (No. 7) (May 2016). Also, Haynes, “Not Just for Dancing Teens,” 33 Chron. of Phil. (No. 7) 16 (May 2021) (describing TikTok as a fundraising tool).
32 32. Wash. Post, Feb. 7, 1980, at A1. Also see “Correction,” Wash. Post, May 11, 1980, at 2.
33 33. One commentator, reflecting a concern that lingers, observed that many states “are beginning to reexamine laws regulating charitable solicitations in the wake of recent disclosures revealing the actual expenditure patterns of many organizations” and concluded: “Of primary concern have been the revelations that in many instances only a small percentage of the money given to further a charitable cause is expended on that cause.” Quandt, “The Regulation of Charitable Fundraising and Spending Activities,” 1975 Wis. L. Rev. 1158, 1159 (1975).
34 34. Wash. Post, Nov. 3, 1977, at C1.
35 35. Wash. Post, Mar. 23, 1993, at A1. The reference to the “Neuharth Foundation” (not its formal name) reflects the fact that the chairman of the board of the foundation is Allen H. Neuharth, formerly the chief executive of the Gannett Co.; the foundation was established in 1935 by New York newspaper publisher Frank E. Gannett.
36 36. Id. at A6.
37 37. Id. The three-year investigation of the spending practices of the Forum culminated in an agreement by its trustees to pay to the organization about $174,000 in settlement of claims as to lavish spending; the specifics of the settlement are detailed in XII Nonprofit Counsel (No. 2) 1 (Feb. 1995).
38 38. Wash. Post, Oct. 2, 1993, at A1.
39 39. Id. at A8. According to this account, some states are investigating this practice, either on the basis of fraud, to force the marketers and vendors to register as professional fundraisers (see § 3.31), or to cause the charities to disclose the percentage of their receipts from this source (see § 3.40).
40 40. Wash. Post, Feb. 10, 1994, at A1.
41 41. Id.
42 42. Id. at A16. Deep into the article is this statement: “Part of the problem, according to the foundation, is that it is very expensive to initiate a direct-mail campaign” (id.).
43 43. Kane, “Where Are Your Charity Dollars Going?,” CNBC.com, December 9, 2010.
44 44. Id.
45 45. Fitzpatrick and Griffin, “Little of Charity's Money Going to Help Animals,” CNN.com, June 15, 2012.
46 46. Id.
47 47. Id.
48 48. Evans, “Charities Deceive Donors Unaware Money Goes to a Telemarketer,” Bloomberg.com, Sept. 11, 2012.
49 49. Id.
50 50. Winter, “N.Y. Woman Arrested over Newtown Massacre Scam,” USA Today, December 29, 2012.
51 51. Id.
52 52. “Idaho Couple Arrested for Cancer Fundraiser Fraud,” The Seattle Times, August 29, 2012.
53 53. Id.
54 54. Sheeran, “John Donald Cody, Harvard Law Grad, Suspected of Running $100 Million Cross-Country Scam,” Huffington Post, October 2, 2012.
55 55. Also, “Charity Fund-Raiser, Client Target of Md. Grand Jury Probe,” Wash. Post, Dec. 12, 1991, at D1; “Solicitors Cash In on Budget Pinch Felt by Nonprofit Groups,” Wash. Post, Oct. 18, 1982 (Washington Business), at 19; “Many Charity Shows Benefit Mostly the Fundraiser,” Charlotte Observer, Mar. 22, 1981, at 1.
56 56. “Radix Malorum Est Cupiditas?” Time, Jan. 23, 1978, at 75.
57 57. “Wrist Tap,” Time, May 22, 1978, at 64.
58 58. In this matter, the Circuit Court of Cook County, Illinois, ordered fundraisers to pay $528,231.52 (including $150,000 in punitive damages) into a trust fund for widows and children of slain law enforcement officers, as the result of a fundraising effort that generated $785,731, of which the fundraisers received $622,000 for costs and compensation. One contract allowed up to 75 percent of total contributions to be consumed in fundraising expenses; the court characterized this and other contracts as authorizing “illegitimate commissions and expenses and were outrageous, unconscionable and an assault upon the public conscience in violation of public policy and Illinois law relating to charitable solicitations.” People of the State of Illinois v. Police Hall of Fame, Inc., No. 74 CH 5015 (order dated Oct. 19, 1976).
59 59. In one instance, the Attorney General of the State of New York charged the Foundation with raising $1,508,256 and expending only $95,674 (6.3 percent) for charitable purposes, and characterized the Foundation as “perpetrating a fraud upon the contributing public” (news release dated Feb. 16, 1977).
60 60. For a litany of fundraising “abuses,” see Hearing on Children's Charities Before the Subcommittee on Children and Youth of the Senate Committee on Labor and Public Welfare, 93d Cong., 2d Sess. (1974), chaired by then-Senator Walter F. Mondale. Also Hearings on Fund Raising By or in Behalf of Veterans Before the House Committee on Veterans' Affairs, 85th Cong., 2d Sess. (1958); Hearings on Federal Agencies and Philanthropies Before a Subcommittee of the House Committee on Government Operations, 85th Cong., 2d Sess. (1958).
61 61. E.g., Baldwin, “Ideology by Mail,” New Republic, July 7 and 14, 1979, at 19.
62 62. These developments have spawned articles in the popular media, such as Smith, “New Guidelines for Giving” (subtitled “Our 10 commandments help you separate top charities from wastrels”), Money, Dec. 1989, at 141.
63 63. Bogert, “Proposed Legislation Regarding State Supervision of Charities,” 52 Mich. L. Rev. 633 (1954).
64 64. Karst, “The Efficiency of the Charitable Dollar: An Unfulfilled State Responsibility,” 73 Harv. L. Rev. 433–434 (1960).
65 65. Quandt, supra note 33, at 1187.
66 66. “For Many, There Are Big Profits in ‘Nonprofits,’” U.S. News & World Rep., Nov. 6, 1978, at 45.
67 67. E.g., Gose, “The Trust Crisis,” 32 Chron. of Phil. (No. 3) 12 (Jan. 2020) (stating that the “public's declining regard for nonprofits may hurt fundraising”).
69 69. See Tax-Exempt Organizations § 28.11.
70 70. See § 5.7.
71 71. See § 6.4.
72 72. See § 10.14.
73 73. IRC ch. 42.
74 74. In early 1989, a task force at the IRS recommended that many of the federal tax rules that are presently applicable only to private foundations be extended to apply to some or all public charities (Report of the IRS Commissioner's Executive Task Force on Civil Penalties).
75 75. Harris, Holley, and McCaffrey, Fundraising into the 1990's: State Regulation of Charitable Solicitation after Riley, 90 (New York: NYU School of Law, 1989).
