Thursday, July 28, 2016
A recent post by Benjamin Leff on The Surly Subgroup highlights the 50+ year ban on 501(c)(3) organizations (here, specifically churches) “intervening” in a campaign for public office. Arguments for and against the ban range from an infringement of free speech, to churches using their power to distort the electoral process. However, the main issue discussed is that although churches want to get in to court to challenge the ban, they believe the IRS won’t let them. For a compelling read on how these organizations may be granted their “day in court” and some possible reform suggestions, read the above linked post.
Thursday, July 7, 2016
The Guardian reports that under a proposal in San Francisco: “large tech employers in the city, potentially including Google, Twitter, Uber, Airbnb and Salesforce, would be required to pay a 1.5% payroll tax. The estimated $120m in annual revenue would be used to fund affordable housing and services for the city’s large homeless population." The effort is intended to help address that San Francisco is “one of the most unequal places in the US.”
The Nonprofit Times Reports that trust in charities in the UK has fallen to its lowest level, declining 10% over the past two years. The article cites concerns about aggressive fundraising practices, charities more concerned in sustaining themselves than in their mission, scandal, high compensation levels, and low expenditures all as leading to public revolt. The government is contemplating setting up a new fundraising regulatory body. The article notes that the crisis in confidence comes at a terrible time, because after the Brexit vote it is likely that British charities will have fewer resources (loss of EU funding) and face greater need. RC
Wednesday, June 29, 2016
Dept of Labor: Volunteers who Provide a Benefit to Organization Are Employees, Must Be Paid Minimum Wage
A church encourages its parishioners to volunteer for a fundraiser. More than 100 individuals heed the call and volunteer their time: some a few hours, some much more. The Department of Labor then sues for violations of federal labor law for failing to pay the workers—who DOL considers “employees”—a minimum wage as required by the Federal Labor Standards Act (FLSA).
Sound unlikely? Well, this exact scenario is playing out in Ohio in the case of Perez v. Cathedral Buffet. Ernest Angley, of televangelism infamy, runs a church and a buffet restaurant. According to court papers, the restaurant is organized as a for-profit organization owned entirely by the church, although the restaurant does not make and has not made a profit. Parishioners volunteer for the buffet—sometimes sporadically, sometimes regularly. 105 of the would-be employees signed affidavits indicating that they did not receive any economic advantage from volunteering, and they volunteered for the sense of community the opportunity provided. Department of Labor has sued Cathedral Buffet and the Ernest Angley for years of failing to pay volunteers.
In response to the argument that the volunteers do not need to be paid a minimum wage, the Department of Labor has taken the following position:
But even if the volunteers did not expect compensation, they certainly did not work solely for their own purpose or pleasure, without immediate benefit to the Buffet. Former Church member Roadman declared that she felt pressure to volunteer. (Roadman Decl. ¶6.) And although the Employers claim the volunteers received a “sense of community” or “satisfaction,” the benefit to them was vastly outweighed by the benefit received by the Buffet. The Buffet actively sought out volunteers to help staff the Buffet, and Angley even admitted that the use of volunteers was a cost-saving measure. (Angley Dep. 35:7-36:11, 50:21-25.) And unlike in Portland Terminal, the Buffet’s workers are not being trained or otherwise working under the close scrutiny of paid employees.
The Buffet cannot rely on the goodwill of the Church members to provide labor that would otherwise be done by paid employees and be compensable under the Act. And the Buffet cannot pressure individuals into providing free labor, then shield itself from FLSA liability under the guise of the Church’s religious mission.
In other words, DOL’s legal position seems to be that an organization MUST pay minimum wage to volunteers as employees if it 1) asked the individual to volunteer and 2) it receives a benefit from those volunteers. If this is the standard, then a lot of organizations are in trouble. After all, a lot of organizations depend on appeals to religious or moral duty to convince people to volunteer. And while some charities likely tolerate volunteers even if they don’t add value, many organizations depend on volunteers to make their operations successful. (Earlier in the case, DOL took the position that it was impossible to "volunteer" for a for-profit enterprise, although its latest briefing appears to have abandoned this position, which had been rejected by several other courts.)
Can Labor’s position possibly be right? Well… probably not, but maybe:
Thursday, June 23, 2016
With the election season coming up (errr, well underway), the ban on 501(c)(3) tax-exempt organizations supporting or opposing a candidate for political office will no doubt be cited, critiqued, and misunderstood by countless pundits and nonprofits. For Purpose Law Group has a blog post tracing its interesting history:
First, the total ban on political campaigning for 501(c)(3) charities was offered as a last-minute, “non-germane” amendment to the massive new Internal Revenue Code; and, second, Senator Johnson’s rationale was based on a significantly incorrect characterization of the 1934 lobbying restriction.
Monday, June 20, 2016
- Evaluate charities using information from AG offices, IRS filings, and other resources such as Charity Navigator* (UPDATE: see below) or Guidestar
- Beware of sham charities & look-alike sites: some appeals will use similar names to well-established nonprofits
- Be cautious of newly-formed charities: may lack the experience to properly or effectively handle donations
- Investigate how your donation will be used: look for destination of funds and what percentage will benefit specific charitable purpose
- Stay away from crowdfunding or peer-to-peer fundraising: state law typically prohibits soliciting donations on behalf of a charity without charity's prior consent
It is good to be prudent, but do these consumer alerts discourage charitable giving? Are there any tips that you would add or eliminate to the list? (Note that these "tips" go beyond law and offer the Attorney Generals' views on best practices for charity, without distinguishing between law and opinion, the latter of which might not be shared by everyone.)
Editor’s note: A national organization with broad knowledge about local operations of charitable organizations privately shared that Charity Navigator only rates a small number of nonprofits but many people don’t realize this and assume that if a nonprofit is not listed, it is not recommended. Additionally, Charity Navigator has itself acknowledged the downsides of analyzing overhead ratios as a method of rating a charity’s effectiveness, but continues to use a methodology that places emphasis on administrative costs. Consequently, the national organization recommends that donors ideally should get to know the nonprofit first-hand, and learn more by reading about the nonprofit on GuideStar.org.
Friday, June 17, 2016
The IRS has released over one million Form 990 series returns spanning a six year time period in machine-readable format, using Amazon Web Services (AWS) as the host site for this data. From the AWS website:
Machine-readable data from certain electronic 990 forms filed with the IRS from 2011 to present are available for anyone to use via Amazon S3.
Form 990 is the form used by the United States Internal Revenue Service to gather financial information about nonprofit organizations. Data for each 990 filing is provided in an XML file that contains structured information that represents the main 990 form, any filed forms and schedules, and other control information describing how the document was filed. Some non-disclosable information is not included in the files.
This data set includes Forms 990, 990-EZ and 990-PF which have been electronically filed with the IRS and is updated monthly in an XML format. The data can be used to perform research and analysis of organizations that have electronically filed Forms 990, 990-EZ and 990-PF. Forms 990-N (e-Postcard) are not available withing this data set. Forms 990-N can be viewed and downloaded from the IRS website.
The related IRS News Release provides:
“The publicly available information on the Form 990 series is vital to those interested in the tax-exempt community,” said IRS Commissioner John Koskinen. “The IRS appreciates the feedback we’ve received from a variety of outside partners as we’ve worked together to explore improvements to make this data more easily accessible.”
The data includes Form 990, Form 990-EZ and Form 990-PF and related schedules with the exception of certain donor information. The IRS also redacts certain personally identifiable tax-identification numbers to prevent the data’s misuse. Data from Form 990-N (e-postcard) used by certain smaller exempt organizations is not available with this data, but it can be accessed through IRS.gov.
Over 60 percent of all Form 990 returns are electronically filed with the IRS. Both paper and electronically filed 990 returns will continue to have image files made and these files will continue to be available by DVD.
. . .
Form 990 is the IRS' primary tool for gathering information about tax-exempt organizations, educating organizations about tax law requirements and promoting compliance. Organizations also use the Form 990 to share information with the public about their programs. Additionally, most states rely on the Form 990 to perform charitable and other regulatory oversight and to satisfy state income tax filing requirements for organizations claiming exemption from state income tax.
With filed Forms 990 now available in machine-readable format, it will be easier for interested persons, including charity watchdog groups and state regulators, to search for information regarding an organization's revenues and expenditures, compensation practices, lobbying activities, related party transactions, officers and directors, and other activities required to be disclosed on Form 990. Previously, the IRS released filed Forms 990 only in image format as PDF documents, even when the organization filed its Form 990 electronically.
Friday, June 10, 2016
So this is off topic, I'll admit, but it gave me a laugh this morning so I thought I'd share. There's some law in there, somewhere. From fellow Law Prof Blog blogger Anne Tucker at the Business Law Prof Blog, her blog post entitled Your Daily Funny Courtesy of the FEC:
Keep reading only if you have 3 minutes that you don't care about being productive or relating to business law, at least not directly.
The Federal Election Committee issued a proposed draft of an advisory opinion on a question brought by Huckabee for President, Inc.--the committee responsible for the 2016 presidential campaign of former Arkansas Governor Mike Huckabee. The Committee wanted to know if it can use part of a legal defense fund to pay a settlement. The FEC says yes. This isn't an election law blog, so I won't go into the details. The litigation arose over the campaign's use of the song "Eye of the Tiger". The FEC, feeling quite cheeky writes the following:
The complaint, seeking injunctive relief and monetary damages, alleged that 21 the Committee had violated federal copyright law by playing the song “Eye of the Tiger” at a campaign event on September 8, 2015. The Committee,rising up to the challenge of its rival, incurred attorneys’ fees and other expenses in defending itself in that litigation. After briefly relishing the thrill of the fight, the parties settled the lawsuit for an undisclosed amount.
Has the political circus of the 2016 election warped the sense of decorum at the FEC or should we all want to be friends with the lawyers there? I can't decide. But I do know that you should (a) click on the link to the song, and (b) jam away in your office for the next 4 minutes.
You are welcome.
Wednesday, June 8, 2016
Eric C. Chaffee, Professor and Associate Dean of Faculty Research & Development at the Univerity of Toledo College of Law, presented his paper entitled "Collaboration Theory: A Theory of the Charitable Tax Exempt Nonprofit Corporation" on June 2 at the most recent Law & Society conference (Program Link here). The current draft of the paper, which is forthcoming 2016 in the U.C. Davis Law Review, is available on SSRN here - the SSRN abstract follows:
Legal scholarship regarding tax exempt nonprofit entities is meager at best. Although some excellent treatises, book chapters, and journal articles have been written, the body of scholarship relating to these entities is not nearly as healthy and robust as the scholarship relating to their for-profit companions. This is especially troubling considering that nonprofit entities help to improve our society in a myriad of different ways.
This Article seeks to fill a void in the existing scholarship by offering an essentialist theory for charitable tax exempt nonprofit corporations that helps to explain the essence of these entities. Beyond the purely academic metaphysical inquiry into what is a corporation, understanding the essential nature of these corporations is important because it helps to determine how they should interact with society, what rights they should have, and how they should be governed by the law. This discussion is especially timely because the recent opinions by the Supreme Court of the United States in Citizens United and Hobby Lobby have reinvigorated the debate over the essence of the corporation.
This Article breaks new ground by offering a new essentialist theory of the corporation, which shall be termed “collaboration theory.” The decades of debate over the essence of for-profit corporations has coalesced into three prevailing theories of the corporation, i.e., the artificial entity theory, the real entity theory, and the aggregate theory. The problem is that none of these prevailing theories fully answers the question of what is a corporation.
Collaboration theory suggests that charitable tax exempt nonprofit corporations are collaborations among the state governments, federal government, and individuals to promote the public good. Unlike the prevailing theories of the corporation, collaboration theory explains both how and why charitable tax exempt nonprofit corporations exist, which provides a fuller and more robust understanding of these corporations. Collaboration theory advances the existing scholarship by finally offering an essentialist theory for nonprofit corporations, and it shows remarkable promise for understanding the essential nature of for-profit corporations as well.
Monday, June 6, 2016
According to this Chronicle of Philanthropy article (citing arts newsletter Hyperallergic), Senate Finance Committee Chair is continuing his scrutiny of private museums, now by requesting clarification from the IRS regarding its stance on private museums. You may recall that last fall, Senator Hatch sent a letter of inquiry to a number of private museums, requesting details regarding the museum's operation - fellow blogger Nickolas Mirkay detailed those letters here. Hyperallergic indicated that one of Hatch's primary concerns was the public availability of collections (including limited hours and advance reservations) and the continuing role of donor of the art collection in the management of the museums. Much of this scrutiny may stem from a series of New York Times articles regarding private museums, including here and here.
Inquiries of this type bother me somewhat. It seems to me that current law regarding private benefit is probably sufficient to handle many of the perceived abuses (maybe it's an enforcement issue - just throwin' it out there). The drumbeat of the articles and the Senate inquiry may lead to additional regulation - and I suspect they will use a mallet rather than a surgical instrument to deal with the issue, if history is any guide.
Friday, June 3, 2016
Melvin A Lamboy-Ruiz, James N. Cannon, and Olena Watanabe have posted The Influence of Ownership and Regulatory Scrutiny on Earnings Management in U. S. Hospitals on SSRN with the following abstract:
We examine accrual and real earnings manipulations in U.S. hospitals, where we expect differences in hospital ownership (nonprofit vs. for-profit) will result in varying incentives to manage earnings. First, we document that nonprofit hospitals have lower levels of income-increasing and income-decreasing earnings manipulations than for-profit hospitals. Second, when we partition nonprofit hospitals by states with community benefits laws, we find that this greater regulatory scrutiny is associated with lower income-decreasing and income-increasing earnings management. Further, under regulatory scrutiny, nonprofit hospitals provide a greater proportion of uncompensated (charity) care with respect to net revenue. By examining differences in regulatory scrutiny types (i.e. reporting only vs. provision only), we find that either requirement is associated with less severe earnings management. Turning to actual patient care provided, we document that hospitals under regulatory scrutiny provide more uncompensated care, while reporting less compensated care costs as a proportion of net revenue. Notably, the higher uncompensated care observed under regulatory scrutiny is associated with the community benefits provision only requirement, but not with the reporting only requirement. Overall, our findings suggest that reporting incentives associated with ownership and those influenced by increased regulatory scrutiny help to improve earnings quality, and that the provision requirement alone benefits stakeholders more than reporting requirement alone by incentivizing nonprofit hospitals to offer more community benefits.
--Eric C. Chaffee
Thursday, June 2, 2016
Mountanos v. Commissioner—9th Circuit Affirmed Tax Court’s Denial of Conservation Easement Donation Deductions and Imposition of Penalties
Mountanos involved a landowner who donated a conservation easement with respect to undeveloped land in Lake County, California, in 2005. The landowner reported that the easement had a value of $4.69 million, claimed a federal charitable income tax deduction of $1.3 million on his 2005 income tax return, and claimed the remaining $3.39 million in the form of carryover deductions on his 2006, 2007, and 2008 returns.
In Mountanos v. Comm’r, T.C. Memo. 2013-138 (Mountanos I), the Tax Court sustained the IRS’s disallowance of the carryover deductions, finding that the taxpayer failed to prove that the highest and best use of the land changed as a result of the donation and, thus, that the easement had any value. The statute of limitations had apparently run on the landowner’s 2005 return. The Tax Court also found that the taxpayer was liable for strict liability gross valuation misstatement penalties under IRC § 6662(h).
In Mountanos v. Comm'r, T.C. Memo. 2014-38 (Mountanos II), the Tax Court denied the taxpayer’s motions to reconsider, vacate, or revise its opinion in Mountanos I. Asking the court to consider alternative (non valuation) grounds for denying the deduction in Mountanos II was, said the Tax Court, “a calculated maneuver to avoid the accuracy-related penalty.”
In a short (just over 3-page) unpublished opinion, Mountanos v. Comm’r, No. 14-71580 (9th Cir., June 1, 2016) (Mountanos III), the Ninth Circuit affirmed the Tax Court’s holding that the landowner (i) was not eligible for the carryover deductions claimed on his 2006, 2007, and 2008 income tax returns and (ii) was liable for a strict liability gross valuation misstatement penalty with regard to each return. The Ninth Circuit explained that, even if the Tax Court erred in failing to assign some non-zero value to the potential to subdivide the property into seven separately salable parcels, the error was harmless because the evidence indicated the easement had a value of no more than $210,000, which was far less than the $1.3 million the landowner claimed as a deduction on his 2005 return. In addition, even if the easement had a value of up to $210,000, the landowner remained subject to gross valuation misstatement penalties because the value he reported on his income tax returns for the easement ($4.69 million) was more than four times (400%) of that value. Finally, the Ninth Circuit rejected the landowner’s argument that not allowing him to raise the reasonable cause defense for his gross valuation misstatements on his 2006, 2007, and 2008 returns constituted an improper retroactive application of the strict liability penalty, which was enacted as part of the Pension Protection Act of 2006. Citing Chandler v. Comm'r, 142 T.C. 279 (2014), the Ninth Circuit explained that the landowner had "reaffirmed" his gross valuation misstatement with respect to the easement on the returns in which he claimed the carryover deductions.
Nancy A. McLaughlin, Robert W. Swenson Professor of Law, University of Utah S.J. Quinney College of Law
Wednesday, June 1, 2016
The International Committee of the Red Cross has compiled an E-Briefing on Principles Guiding Humanitarian Action. The introduction describes the E-Briefing as follows:
The seven "Fundamental Principles of the International Red Cross and Red Crescent Movement" are the expression of a set of values and experiences distilled from over a century and a half of protecting the lives and dignity of people affected by conflict and disaster worldwide. This e-briefing is intended as a multimedia resource that traces the latest developments in the contemporary debate on these principles. Far from having being limited to reaffirming their enduring relevance and far-reaching influence, this worldwide reflection also refined our mastery of the humanitarian principles as eminently pragmatic tools that, when applied judiciously on the ground, carry the power for more humanitarian effectiveness amidst the most challenging crises of our times.
--Eric C. Chaffee
Tuesday, May 31, 2016
June 1 Deadline Reminder - Call For Papers Joint Program of the AALS Sections on Agency, Partnerships LLCs, and Unincorporated Associations & Nonprofit and Philanthropy Law
CALL FOR PAPERS
LLCS, NEW CHARITABLE FORMS, AND THE RISE OF PHILANTHROCAPITALISM
2017 AALS Annual Meeting
January 3-7, 2017
San Francisco, CA
In December 2015, Facebook founder Mark Zuckerberg and his wife, Dr. Priscilla Chan, pledged their personal fortune—then valued at $45 billion—to the Chan-Zuckerberg Initiative (CZI), a philanthropic effort aimed at “advancing human potential and promoting equality.” But instead of organizing CZI using a traditional charitable structure, the couple organized CZI as a for-profit Delaware LLC. CZI is perhaps the most notable example, but not the only example, of Silicon Valley billionaires exploiting the LLC form to advance philanthropic efforts. But are LLCs and other for-profit business structures compatible with philanthropy? What are the tax, governance, and other policy implications of this new tool of philanthrocapitalism? What happens when LLCs, rather than traditional charitable forms, are used for “philanthropic” purposes?
From the heart of Silicon Valley, the AALS Section on Agency, Partnerships LLCs, and Unincorporated Associations and Section on Nonprofit and Philanthropy Law will host a joint program tackling these timely issues. In addition to featuring invited speakers, we seek speakers (and papers) selected from this call.
Any full-time faculty of an AALS member or fee-paid school who has written an unpublished paper, is working on a paper, or who is interested in writing a paper in this area is invited to submit a 1- or 2-page proposal by June 1, 2016. The Executive Committees of the Sections will review all submissions and select two papers by July 1, 2016. If selected, a very polished draft must be submitted by November 30, 2016. All submissions and inquiries should be directed to the Chairs of the Sections at the email addresses below:
University of Oregon School of Law
Garry W. Jenkins
Associate Dean for Academic Affairs
John C. Elam/Vorys Sater Professor of Law
The Ohio State University Moritz College of Law
--Eric C. Chaffee
Monday, May 30, 2016
Evelyn Brody has posted The 21st Century Fight Over Who Sets the Terms of the Charity Property Tax Exemption on SSRN with the following abstract:
Turning from the substantive issue of defining charity, this article considers the “who” question by examining the roles of the courts, legislatures, municipalities, and charities in determining exemption and payments in lieu of taxes. The three covered topics – constitutional power, statutory interpretation, and the “intermediate sanctions” of user fees and PILOTs – braid together to form the procedural framework for the financial relationship between nonprofit property owners and the taxing jurisdictions that host them. Change the parameters of one, and you change the others.
Staying off the rolls or minimizing the tax bite often results from compromise – whether at the state constitutional level; in state statutes; as a matter of assessment; or through negotiation with local governmental bodies. But such an application of a multi-level framework for mischief leads to legal incoherence. The article begins with the knockdown, drag-out separation-of-powers fight that has arisen in Illinois and Pennsylvania: Which branch, the judicial or legislative, defines “charities” granted exemption by the state constitution?
Next up is the more mundane world of statutory interpretation, where even here courts second-guess the legislature. A June 2015 decision by the New Jersey tax court exemplifies what could be view as “passive-aggressive separation of powers,” when the court basically says, “Surely the legislature could not have meant this entity (or this use of property) to qualify as charity.” This latest decision not only seems to render all “sophisticated centers of medical care” in New Jersey taxable, but also is causing sleepless nights for Princeton University: The same judge is hearing a challenge to the university’s exemption brought by local taxpayers.
New Jersey’s January 2016 proposed legislation fell a pocket veto short of enactment: It would have imposed a formulary community-service fee on nonprofit hospitals. Legislative efforts are again underway. Perhaps such a third-way solution might become more common. Voluntary agreements for payments in lieu of taxes are literally all over the map, from Boston’s revamped comprehensive PILOT program to a Florida appellate court’s striking of a PILOT program as inconsistent with statutory exemption. Will the people’s branch get the last word after all?
--Eric C. Chaffee
Thomas C. Berg has posted Partly Acculturated Religious Activity: A Case for Accommodating Religious Nonprofits on SSRN with the following abstract:
Many of today’s most vexing problems concerning the accommodation of religion involve religious organizations that straddle the perceived boundary of the public and private: that is, not the "private" instance of churches and their clergy, but rather nonprofit organizations (religious colleges, adoption agencies, etc.) that employ or serve people outside their faith but also make religious freedom claims to follow their religious norms in the face of generally applicable laws (contraception mandates, anti-discrimination laws, etc.). I refer to these organizations and activities as "partly acculturated": acculturated in that they reach out to the broader society to provide services of general civic value, but unacculturated in that some of their doctrines and practices clash with dominant secular values. To many critics, it is plainly improper to accommodate partly acculturated activity: when an organizations hires or serves people outside its faith, it must follow whatever rules the government sets.
This paper argues that we should make real efforts to protect religious freedom for partly acculturated religious activities. The law should not force all religious organizations and activities into one of the two polar categories, acculturated or unacculturated. Part II presents several reasons why there is a strong interest in protecting the freedom to engage in partly acculturated religious activity. Among other things, I argue, relying on work in sociology of religion, that refusing accommodation to partly acculturated activity risks losing the distinctive vigor that such organizations offer in providing services to society: their countercultural positions tend to create a sense of identity and commitment, while their acculturation means they apply that identity to serve society rather than withdraw from it.
Accommodating partially acculturated activity does present distinctive challenges because of effects on non-adherents. Part III proposes addressing those, and drawing lines concerning accommodation, by relying on concepts of:(1) notice to employees and clients concerning the organization’s religious identity, and (2) alternative sources of receiving the services or opportunities in question.
--Eric C. Chaffee
Sunday, May 29, 2016
A South Carolina nonprofit has recently come under fire for their practices in fund disbursement. Palmetto Kids First Scholarship Program is an organization that gives students with disabilities scholarships to obtain private school education in South Carolina. Currently, the nonprofit has been banned from raising money, and if the proposal becomes a law, the state would take over operation of the charity.
Although the nonprofit has given out over $17 million dollars in scholarships since 2014, questions have been raised about who is receiving these scholarships. The government contends that many of the recipients of these scholarships were donors themselves, an arrangement that violates the law. Further, the government alleges that some of the parents whose children received scholarships claimed the donation they made to the program as a tax deduction, which is not allowed. Executives from the organization refute the allegations, claiming nothing wrong has been done. However, executives are aware of the ramifications of the allegations, and the issues are being addressed internally.
Deciding to shut down an organization like this, even if temporarily, has major implications for the community at large. There will be families who do not receive the funds they would normally be entitled to, and some children may not be able to receive the education they otherwise would have enjoyed. However, if the allegations are true, serious reforms are needed, and the takeover will certainly be justified.
Saturday, May 28, 2016
The "Google Cultural Institute" recently announced its initiative to document and provide access to works of art owned by museums from around the world, facilitated by the Google "art camera," which enables the production of ultra-high resolution “gigapixel” images. As Google explains:
The Art Camera is a robotic camera, custom-built to create gigapixel images faster and more easily. A robotic system steers the camera automatically from detail to detail, taking hundreds of high resolution close-ups of the painting. To make sure the focus is right on each brush stroke, it’s equipped with a laser and a sonar that—much like a bat—uses high frequency sound to measure the distance of the artwork. Once each detail is captured, our software takes the thousands of close-up shots and, like a jigsaw, stitches the pieces together into one single image.
I think this is a very exciting and important development, which reflects a welcome shift in the priorities of many art museums. Many (most?) artworks owned by museums are in the public domain. But many museums have restricted access to those artworks, in order to profit from reproductions of those works. The Google Cultural Institute project reflects a welcome re-alignment of art museum priorities, focused on maximizing access, rather than profits. Art museums are typically charities, with the charitable purpose of preserving and providing access to works of art. Hopefully, the Google Cultural Institute project will encourage more art museums to recognize that their charitable purpose implies an obligation to observe open access principles.
Brian L. Frye
Thursday, May 26, 2016
A recent story describes the battle an Iowa casino faces in trying to keep its non-profit status as a 501(c) (4) social welfare organization. The IRS believes that the casino is too commercially successful to be considered a charitable organization, and calls into question how their revenue is truly being used after it is earned. Of course, non-profits may have a commercial enterprise as long as the organization is lessening the burden of the government.
According to the casino, they certainly have a large impact on the surrounding community, paying over $54 million in wages last year. Further, the casino gifted nearly $20 million to local charities, including school districts. According to the casino’s website, they have also given out over 500 scholarships for students to attend state colleges or universities in Iowa. The Casino also gives out “Legacy Grants” to help fund projects that benefit the community, these grants range from $100,000 to $1 million. Lastly, the casino has paid over $800 million in taxes so far.
No matter the ultimate outcome of the IRS ruling, it is clear that many will be impacted from the decision. It will be interesting to see if the IRS determines that all of this charitable giving lessens the burden of the government, or if other competing objectives drive them to take away the casino’s 501(c) (4) status.
Wednesday, May 25, 2016
A recent article highlights Amazon’s unique combination of business foresight and philanthropic giving. Amazon has purchased a former motel that it eventually plans to use for expansion of its Seattle campus. However, it is not quite ready for the expansion. In the meantime, Amazon has teamed up with a local non-profit, Mary’s Place, to use the space as a temporary homeless shelter.
The shelter will have the capacity to house up to 200 people at a time, helping alleviate the growing homeless crisis plaguing Seattle. At the shelter, residents will be provided with two meals per day, and will be able to work three hours per week to earn credit towards obtaining items at the facility’s store.
Although Amazon plans to reclaim the land near 2018, the short-term impact will certainly benefit the local community. Amazon was going to purchases the property anyway, but with this arrangement, both Amazon and Mary’s Place (as well as the people they serve) reap the benefit. Amazon most likely is receiving tax credit for the temporary donation, while Mary’s Place gets expanded resources they otherwise may not have received, and their philanthropic purpose is spread further throughout the community.
Maybe this type temporary giving can become the norm for businesses planning to expand. Mary’s Place states that many homeless families simply need temporary assistance to get back on their feet after a tough setback. If this is the case, there could be a huge potential benefit from this type of giving. It will be interesting to see if other companies follow Amazon’s expansion strategy of partnering with local non-profits.