The Law of Fundraising. Bruce R. Hopkins

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СКАЧАТЬ target="_blank" rel="nofollow" href="#ulink_8c31ce14-f4a1-5dc4-87cc-df8ddf6dfd32">50. Foundations functioning on behalf of educational institutions that are operated by state governments are expressly recognized by the federal tax law, as concerns public charity and charitable donee classifications (IRC § 170(b)(1)(A)(iv)). See Tax-Exempt Organizations, § 12.3(b)(v). Foundations functioning on behalf of other educational institutions are also public charities, often publicly supported ones (IRC §§ 170(b)(1)(A)(vi) (IRC § 509(a)(1)) and 509(a)(2)). See Tax-Exempt Organizations, § 12.3(b)(i), (iv). Some of these foundations in the second category are supporting organizations (IRC § 509(a)(3)), although they may meet a test as to public support. See Tax-Exempt Organizations, § 12.3(c).

      51 51. As to this point, an analogy may be made to the federal securities laws, which differentiate between regulated sales of securities to the public and somewhat unregulated private offerings of securities.

      52 52. One court held that a state's charitable solicitation act was inapplicable to private foundations, for the reason that the “obvious intent” of the statute is “to regulate those charitable organizations, who solicit or accept contributions from persons or corporations outside the charitable entity” (Estate of Campbell v. Lepley, 532 P.2d 1374, 1375 (Okla. 1975)) (emphasis added).

      53 53. This type of provision has been applied in the courts (e.g., Salvation Mission Army Workers Holy Orthodox Christian Church v. Commonwealth, 383 A.2d 995 (Pa. 1978); Blenski v. State, 245 N.W.2d 906 (Wis. 1976)).

      54 54. See § 6.15.

      55 55. These provisions are of dubious legality (see § 4.5).

      56 56. Principally, the federal annual information return (Form 990). In general, see § 5.9, Chapter 7.

      57 57. This exemption, which of course exempts all or nearly all charitable entities, is available for all organizations that are tax exempt by reason of IRC § 501(c)(3).

      58 58. See § 4.2(g).

      59 59. A state may have an alternative to the use of bonds, in that a certificate of deposit, letter of credit, or U.S. obligation can be filed in lieu of a bond. This approach allows investment assets to be pledged while not disturbing the underlying investment. It eliminates the expense of premiums, and reduces the time and expense associated with renewals of bonds.

      60 60. See § 3.2(h).

      61 61. See § 4.1.

      62 62. See § 4.3.

      63 63. Kentucky State Police Professional Association v. Gorman, 870 F. Supp. 166 (E.D. Ky. 1994).

      64 64. National Federation of Nonprofits v. Lungren (N.D. Cal., order issued Mar. 29, 1995).

      65 65. See § 4.15.

      66 66. See § 3.2(h).

      67 67. These requirements are discussed in § 8.6.

      68 68. This is because this type of charitable solicitation is not usually regarded as doing business within a state (see infra note 78).

      69 69. This type of rule has been upheld in the courts (e.g., Lewis v. Congress of Racial Equality, 274 S.E.2d 287 (S.C. 1981); Blenski v. State, 245 N.W. 2d 906 (Wis. 1976); People v. Caldwell, 290 N.E.2d 279 (Ill. 1982)). In Blenski, the court stated that the “crime of unauthorized use of names is directed at protecting the public against being misled and not protecting the person whose name is used. This purpose does not require that liability for this crime be imposed for each individual person whose name is used, particularly where … the unauthorized uses are simultaneously committed” (at 911).

      70 70. This type of provision has been upheld in the courts (e.g., American Gold Star Mothers, Inc. v. Gold Star Mothers, Inc., 191 F.2d 488 (D.C. Cir. 1951); People ex rel. Brown v. Illinois State Troopers Lodge No. 41, 286 N.E.2d 524 (Ill. 1972)). An illustration of the misapplication of this type of rule by regulatory authorities appears in City of Evanston v. Evanston Fire Fighters Association, Local 742, International Association of Fire Fighters, AFL-CIO-CLC, 545 N.E.2d 252, 262–266 (Ill. 1989).

      71 71. In general, see § 9.5.

      72 72. This proposed multistate legend was prepared by Robert S. Tigner, General Counsel, Association of Direct Response Fundraising Counsel. His contribution is gratefully acknowledged.

      73 73. A fiduciary is a person who has special responsibilities in connection with the administration, investment, and distribution of property that belongs to someone else; this range of duties is termed fiduciary responsibility.

      74 74. An excellent discussion of the role of an attorney general in overseeing charitable organizations appears in City of Evanston v. Evanston Fire Fighters Association, Local 742, International Association of Fire Fighters, AFL-CIO-CLC, 545 N.E. 2d 252, 256–262 (Ill. 1989).

      75 75. This type of restriction, however, is unconstitutional (see § 4.5).

      76 76. E.g., Commonwealth v. Events International, Inc., 585 A.2d 1146 (Pa. 1991); People ex rel. Scott v. Gorman, 421 N.E.2d 228 (Ill. 1981); People ex rel. Scott v. Police Hall of Fame, Inc., 376 N.E.2d 665 (Ill. 1978). In general, Suhrke, “What Can Be Done about Fund Raising ‘Fraud’?,” XXVI Phil. Monthly (No. 6) 5 (1993).

      77 77. Details about this project and the forms are available at www.nonprofits.org/library/gov/urs.

      78 78. One court observed that “[i]t is doubtful … whether the solicitation of funds for a charitable СКАЧАТЬ