Social Investment by Charities: The Law Commission’s Recommendations (PDF)
Source: Law Commission
We are pleased to announce the publication of our recommendations on social investment by charities as part of our ongoing project on selected issues in charity law.
Social investment provides financial returns while at the same time generating social benefits. It is an important and developing area for charities that helps them meet their charitable objectives by combining investment and spending.
We have been told that some charity trustees lack the confidence to make social investments because they are unsure whether their legal powers and duties permit them to do so. To clarify and simplify the law, we are recommending that charity trustees be given a specific statutory power to make social investments.
Law Commissioner Professor Elizabeth Cooke said: “Social investment represents a significant opportunity for charities, but the existing law is unclear. Our recommended reforms will clarify the law for trustees as to their powers and duties. They will make social investment more straightforward in law and give trustees the confidence to make the best of the opportunities it offers.”
Don’t let your student debt stop you from serving your country
Source: Consumer Financial Protection Bureau
Last year, the CFPB launched an initiative to enlist the support of public service employers to help their employees tackle their student debt. We also published a report, which estimated that approximately one-fourth of the labor force is working in a public service profession and potentially eligible for existing benefits to help them manage their student loans.
Today, we joined the Department of Education, the Peace Corps, and the Corporation for National and Community Service to release new resources for employees, volunteers, and recent graduates with student loan debt. Whether you choose to serve in the military, volunteer in the Peace Corps, or pursue national service, we know that managing your money while serving your country can be hard. This is particularly true if you have student loans.
To help, we’ve developed new customized guides for members of the military, for Peace Corps volunteers, and for participants in national service programs with student debt. In addition, we have partnered with the Peace Corps and the AmeriCorps programs to help their members understand how to qualify for loan forgiveness and other student loan benefits—part of our financial education project focused on public service and student debt.
Student loan borrowers working in public service have access to a range of existing benefits designed to help them manage their debt. One program provides borrowers that spend a decade or more in service with the opportunity to have their loans forgiven after 10 years (120 months) of on-time payments. There are also a range of other existing benefits for servicemembers, teachers and other public servants.
Shining a Light on State Campaign Finance: An Evaluation of the Impact of the National Institute on Money in State Politics
The National Institute on Money in State Politics collects, processes, and makes public information on campaign contributions made to state-level candidates for public office. The Institute asked the RAND Corporation to probe user perspectives on the Institute and its data, on how the data are being used, and on how the utility of the data might be improved in the future. Drawing on experiences of a variety of users, as well as a review of the publications that have used the Institute’s data and research reports, this report provides an evaluation of the Institute’s impact on the public discourse over campaign finance at the state level. It is our view that the Institute serves an important purpose — to undertake the collection, centralization, and dissemination of state-level campaign finance data. No other organization has been successful in this effort or is likely to be so. All the audiences that the Institute seeks to engage have found value in the Institute’s efforts. The most successful of these are the scholarly, journalistic, and advocacy communities. The interviewees we spoke with were impressed, felt indebted to the Institute, and expressed an inability to do the sort of research, reporting, and advocacy on state campaign finance without the Institute. Overall, a variety of influential users engaged in campaign finance and public policy view the Institute’s work as being of high quality and adding value.
The State of Nonprofit Governance
Source: Urban Institute
This report provides a snapshot of nonprofit governance policies and practices among operating public charities. Using IRS Form 990 data, we find that many public charities have good governance policies and practices in place. In 2010, more than 60 percent of organizations had a conflict of interest policy, an independent audit and a compensation review and approval process for their chief executive. We also find that organizational characteristics such as size, type of organization, government funding, age, board size and board independence all appear related to whether or not a public charity chooses to adopt these recommended practices.
Signifying the public: Celebrity advocacy and post-democratic politics
Source: International Journal of Cultural Studies
Celebrity advocacy has become an important part of the way in which development non-governmental organizations (NGOs), and charities more generally, try to achieve social and political change. Yet research into how different audiences respond to such advocacy is parlous. This article presents findings from two large surveys (1111 and 1999), focus groups (9) and interviews across the charitable sector and celebrity industries to explore those responses. These data suggest that celebrity advocacy is not a particularly popular phenomenon, but it is widely believed to be so. Celebrity advocacy is thus firmly entrenched in post-democratic politics and part of the public alienation from politics that term describes. Nevertheless, because celebrity advocacy also works well with political and business elites it may still be a good vehicle for pursuing some of the goals of development advocates.
See: Celebrity promotion of charities ‘is largely ineffective,’ says research (EurekAlert!)
Electioneering Rules for Private Foundations and Public Charities
Source: Packard Foundation, Gates Foundation, Hewlett Foundation and Moore Foundation
The legal staff at the Packard Foundation, Gates Foundation, Hewlett Foundation and Moore Foundation developed this free, resource, which covers the basic legal rules around the electioneering prohibition. It takes about ninety minutes to complete and features “Maya,” a program officer that helps participants through the course. Participants can also return to the training at any time for a refresher and click on the individual modules to refer back to specific topics.
Some Tax-Exempt Organizations Have Substantial Delinquent Payroll Taxes
Source: Treasury Inspector General for Tax Administration
IMPACT ON TAXPAYERS
While tax‑exempt organizations are generally not required to pay income taxes, they are generally required to pay other taxes such as payroll taxes. If tax-exempt organizations do not pay their taxes and thereby abuse the Federal tax system, the Federal Government could lose millions of dollars in revenue.
WHY TIGTA DID THE AUDIT
The overall objectives of this review were to determine if, and to what extent, tax‑exempt organizations have known Federal tax debt and to identify actions the Exempt Organizations function has taken to address this noncompliance.
WHAT TIGTA FOUND
IRS records indicate that the majority of tax‑exempt organizations pay their Federal taxes. However, a small percentage are not paying their taxes. TIGTA determined that more than 64,200 (3.8 percent) tax‑exempt organizations had nearly $875 million of Federal tax debt as of June 16, 2012. While some organizations owed minor amounts, approximately 1,200 tax exempt organizations owed more than $100,000 each. Unpaid taxes were often associated with multiple tax periods. For example, nine organizations each had Federal tax debt spanning 10 or more years that collectively totaled more than $5.5 million.
TIGTA reviewed 25 tax‑exempt organizations – all Internal Revenue Code § 501(c)(3) – that appeared to be among the worst examples involving unpaid Federal tax but are not representative of the population of all tax‑exempt organizations with unpaid tax. TIGTA determined that these organizations generally received government payments over a three‑year period of $148 million, including Medicare, Medicaid, and government grants; had annual revenue of almost $167 million; and owned assets of more than $97 million—but continued to not remit payroll and other taxes, including penalties and interest, totaling more than $25 million. The Internal Revenue Code does not authorize the IRS to revoke tax‑exempt status based on an organization’s failure to pay payroll taxes, and substantially all of the organizations that TIGTA reviewed were still recognized by the IRS as tax‑exempt as of May 2013. The Exempt Organizations function had completed several examinations but was generally not aware of the behavior of the organizations because another IRS business unit is responsible for collecting the delinquent tax debt.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the Director, Exempt Organizations: 1) coordinate with Small Business/ Self‑Employed Division management to receive relevant collection information, 2) periodically complete analyses to identify tax‑exempt organizations that potentially abuse their tax‑exempt status for examination (if necessary), and 3) work with the Department of the Treasury to evaluate whether a legislative proposal is warranted to strengthen the IRS’s ability to enforce payroll tax noncompliance by tax‑exempt organizations.
In their response to the report, IRS management disagreed with the first two recommendations and agreed to apprise the Department of the Treasury of our third recommendation. TIGTA believes that the Exempt Organizations function should do more to oversee tax‑exempt organizations that repeatedly fail to remit payroll taxes, which include Medicare, Social Security, and Federal income taxes withheld from employees. This is particularly important because these organizations have the benefit of charitable status, and the Government has paid them millions of dollars of Medicare and Medicaid funds.