Fiscal sponsorships are a popular way for new nonprofit organizations or temporary projects to attract tax-deductible donations or secure grants that require 501(c)(3) status. However,
Grantmaking and Gift Planning
A virtual bench trial that began on October 19 may soon further define the contours of control issues surrounding donor-advised funds. The case, Fairbairn et al. v. Fidelity Investments Charitable Gift Fund, centers on a feud between donors Emily and Malcolm Fairbairn and Fidelity Investment’s Charitable Branch.
The tainted donor dilemma is nothing new; nonprofits have long wrestled with the ethical and reputational implications of receiving questionable characters’ gifts. But with the explosion of real-time mass communication and social media, stories of wrongdoing are quickly amplified and can quickly sink a person–and everything and everyone with whom they are associated.
AdHoc said it best: For everyone that is feeling outraged by the multiple lives that have been lost at the hands of the police, we’d encourage you to channel that anger into action. For some, that action looks like self-education and awareness, or protesting, or speaking out amongst their friends and community. Another consideration may be giving to one of several organizations working diligently in the fight against systemic racism and violence.
Not every contribution to a charity qualifies for a charitable deduction. Charities that misunderstand the rules can lead donors astray when they offer tax receipts for non-deductible gifts inadvertently damaging donor relationships.
Donors wishing to help the victims of a tragedy, a serious illness, or other major hardship are often surprised to learn that gifts earmarked for specific individuals are not tax deductible as charitable contributions. This rule catches many donors off guard as it is not intuitive that gifts made to individuals who are clearly in need would not be considered charitable.
From time to time, charities are faced with what to do with a restricted gift when the terms of the donor’s restriction can no longer be fulfilled. The doctrine of cy pres permits the courts to modify the charitable purpose of a charitable trust to a purpose that reasonably approximates the designated purpose, where the designated charitable purpose becomes unlawful, impossible, or impracticable to carry out or where it becomes wasteful to apply all of the property to the designated purpose.
Some businesses want to be able to help their employees in times of need. When properly structured, such assistance can qualify as a tax-free gift to the employee.
Be a smart detective. Find out who is doing what. Find out why they’re funding what they’re funding. And then put yourself in that spotlight. Collaborative efforts are sometimes advisable and attractive to funders so consider whether collaboration can move your mission forward.