December 2018



Fidelity Charitable is a sponsor of donor advised funds.  A couple donated over $100 million of corporate stock to a donor advised fund they established with Fidelity Charitable.  Fidelity Charitable immediately sold the stock and as a result, the couple is suing Fidelity Charitable for contract and tort claims saying that the fund made a series of promises to them about how they would donate and then did not follow through.  Fidelity Charitable filed a Motion to Dismiss but the court has ruled that the case, for now, can go forward.  Source: Northern California Record, December 5, 2018

 District of Columbia:

An announcement was made in late November that the District Office of Tax and Revenue will begin to require organizations to reapply for tax exempt status every five years by filing a newly designed online exemption application.  These exemptions include franchise/income tax exemption, as well as sales and use tax exemption.  Current exempt organizations should receive a formal notice from the agency. 


Ten charities in Northwest Florida who were victimized by an illegal bingo operator have been waiting for two years to recover some of the millions of dollars that was seized by Federal agents.  Part of the delay is occasioned by an early November ruling that overturned one of the convictions against the two operators of the bingo operation. 


The CEO of a charity headquartered in Springfield has pled guilty to her role in a multimillion-dollar political corruption scheme where she allegedly misapplied millions of dollars of a charity’s funds for substantial, undisclosed payments to lobbying firms as well as political advocates and knowingly participated in a fraud against the charity where she worked. Source:  Department of Justice Press Release

 New York:

The CEO of BoardSource wrote a short piece saying that the Attorney General’s publication “Pennies for Charity” can actually hurt good nonprofits.  The thesis is based upon certain assumptions contained in the reports which she believes are false, two of which are: (1) the less an organization spends on fundraising, the more effective that organization is, and (2) it is always better to spend less on fundraising.  She finishes by saying, “transparency is good.”  “However transparency that is incomplete or lacking the context needed to meaningfully interpret the data can be dangerous.” 

 The Trump Foundation has reached an agreement with the Attorney General’s office to dissolve the Foundation under supervised control by the court.  Serious allegations remain and the lawsuit brought by the Attorney General’s office will proceed. 


The Black Agenda Cincinnati is calling on the Cincinnati counsel to change how the city allocates tax dollars to human service organizations by removing United Way of Greater Cincinnati from the process.  The objection claimed by Black Agenda is the lack of accountability on how the United Way uses the money to provide social services. Source:  WCPO December 3, 2018


The readers of the Chronicle of Philanthropy picked Tulsa, Oklahoma as the best city for philanthropy noting that the United Way of Tulsa reached almost $26,000,000 last year.  The figure was just $5,000,000 shy of the giving total to the United Way of New York!  (Commentary:  I am also pleased to report that our hometown of Kansas City apparently came in second in the ranking.)


The Love Utah Give Utah day of fundraising, sponsored by the Community Foundation of Utah, was moved from March to November with several other changes which has caused concern among the states’ nonprofits.  The number of participating charities fell by 14% from 451 organizations in 2017 to only 386 in 2018.  A number of groups have expressed displeasure with the move.  Source:  Salt Lake Tribune, December 5, 2018


The Attorney General has announced the filing of a lawsuit in King County Superior Court against the Holiday Treasure Chest Charity Foundation and its founder, Mark Bergeson, accusing him of using the charity for his own personal gain.  The Attorney General is seeking cost, fees and dissolution of the organization.  This is the second suit the State has filed against Mark Bergeson over similar issues.


Ways and Means:

Ways and Means Chairman, Kevin Brady (R-TX) has introduced an amendment to a pending tax bill that would eliminate the new tax on certain fringe benefits provided to employees of nonprofits.  (Commentary:  the provision at hand would create an excise tax on charities that provide fringe benefits such as paid parking for their employees.) Source:  Politico Publication, November 29, 2018

 Giving Tuesday:

The Chronicle of Philanthropy reports that Giving Tuesday appeals raised 27% more than in the previous year.  The estimated amount for 2018 was $380 million.

 Evangelical Council for Financial Accountability:

ECFA (Evangelical Council for Financial Accountability) in its State of Giving Report, reports an increase of 5.9% in giving between 2016 and 2017 noting that it is the strongest increase in three years.  

 Boy Scouts:

The Wall Street Journal reports that the Boy Scouts of America is considering filing for bankruptcy.  The published report notes that filing for bankruptcy would halt the many lawsuits the organization faces alleging inappropriate conduct by employees.  The Chief Scout Executive notes that the organization is continuing to work with experts to explore options available to ensure the local and national programming of the Boy Scouts of America continues.  Source:  Wall Street Journal, December 12, 2018


The Agency has issued Notice 2018-99, the purpose of which is to provide interim guidance for taxpayers to determine the amount of parking expenses for qualified transportation fringe benefits that is nondeductible under the Code and for tax-exempt organizations to determine the corresponding increase in the amount of unrelated business taxable income attributable to nondeductible parking expenses.