Digital Commons Network^™

Solving Charity Failures, Brian L. Frye

Law Faculty Scholarly Articles

“Crowdfunding” is a way of using the Internet to raise money by asking the public to contribute to a project. In the past, asking a large number of people to contribute small amounts of money to a project was expensive and inefficient for most organizations and individuals. By greatly reducing transaction costs, crowdfunding enables anyone to inexpensively and efficiently seek small contributions to a project. While crowdfunding is a new model of fundraising, it has already transformed funding for the arts. For example, the crowdfunding platform Kickstarter distributed more than forty million dollars to the creators of almost seventy-five hundred …

Introducing The Law Of Nonprofit Organizations And Philanthropy, David A. Brennen

Law Faculty Scholarly Articles

On January 5,2007, the Nonprofit and Philanthropy Law Section of AALS held its first program at the AALS Annual Meeting in Washington, D.C. The program, entitled "State-Level Legal Reform of the Law of Nonprofit Organizations," was a fitting way to launch what should prove to be a valuable contribution to the study of law relating to nonprofit organizations and philanthropy. This burgeoning area of academic legal study is well poised to grow by leaps and bounds in the coming years due to its impact on many traditional areas of legal study, including tax law, corporate law, estate law, trust law, …

A Diversity Theory Of Charitable Tax Exemption—Beyond Efficiency, Through Critical Race Theory, Toward Diversity, David A. Brennen

Law Faculty Scholarly Articles

What is the normative rationale for the federal income tax exemption for nonprofit charitable corporations? Even though the exemption dates back to 1894, Congress has failed to fully rationalize it. Though scholars and courts have attempted over the years to come up with a coherent rationale for the charitable tax exemption, their attempts are focused almost exclusively on economic efficiency. Thus, the charitable tax exemption is typically framed by noted tax scholars like Boris Bittker, Henry Hansmann, and others as an economically efficient means of providing certain goods and services to the public. Rationalizing the charitable tax exemption in economic …

Race Conscious Affirmative Action By Tax Exempt 501(C)(3) Corporations After Grutter And Gratz, David A. Brennen

Law Faculty Scholarly Articles

The Equal Protection Clause of the Fourteenth Amendment generally acts as a legal limit on the permissible bounds of government action. Accordingly, public universities and other government entities are constitutionally prohibited from engaging in acts that violate equal protection of the laws. The Supreme Court recently reinforced this point when it ruled, in two related cases, that public universities may consider the race of applicants when making admissions decisions, so long as an applicant's race does not amount to a deciding factor when granting admission. By its very terms, the constitutional limitation imposed by the Equal Protection Clause only directly …

Charities And The Constitution: Evaluating The Role Of Constitutional Principles In Determining The Scope Of Tax Law's Public Policy Limitation For Charities, David A. Brennen

Law Faculty Scholarly Articles

This Article expands the discussion of whether tax-exempt charities, for constitutional law purposes, should be treated as government actors, as private actors or as something in between. While government actors are subject to constitutional law restrictions concerning discrimination and free speech, private non-government actors are not generally subject to these same restrictions. Although tax-exempt charities are often thought of as sovereigns and, thus, government-like, the fact remains that charities are private entities created to serve public purposes. As private entities, charities - like all other private entities - are not necessarily bound by constitutional law principles. Still, the many “public” …

Tax Expenditures, Social Justice And Civil Rights: Expanding The Scope Of Civil Rights Laws To Apply To Tax-Exempt Charities, David A. Brennen

Law Faculty Scholarly Articles

In recent years, courts have decided a number of cases in which private organizations discriminated against people based solely on their race, gender, sexual orientation, or other immutable traits. For example, in 2000, the Boy Scouts of America revoked a New Jersey man's membership in the Boy Scouts because he was gay. New Jersey's supreme court held that the Boy Scouts' action violated New Jersey's anti-discrimination law. Notwithstanding the state court's holding, the United States Supreme Court concluded that the First Amendment prevented any court from forcing the Boy Scouts to keep a gay man as a member of its …

The Power Of The Treasury: Racial Discrimination, Public Policy, And "Charity" In Contemporary Society, David A. Brennen

Law Faculty Scholarly Articles

The Treasury Department is empowered to enforce “established public policy” with respect to tax-exempt charities. Under this public policy power, the Treasury has revoked the tax-exempt charitable status of organizations that discriminated against blacks, organizations whose members engaged in civil disobedience against war, and organizations involved in illegal activity. The Treasury interprets its public policy power as applying to any activity that violates clear public policy. Thus, presumably, the Treasury could use this power to deny tax-exempt charitable status to an organization that engages in conduct that violates assisted suicide laws, anti-abortion laws, or other sufficiently “established” public policies.

The …

The Proposed Corporate Sponsorship Regulations: Is The Treasury Department "Sleeping With The Enemy"?, David A. Brennen

Law Faculty Scholarly Articles

In 1993, the Treasury Department (the Treasury) issued a proposed regulation outlining when money received by a charity from a corporate sponsor would be subject to federal income tax. In defining the phrase "trade or business," the proposed regulation addresses the extent to which sponsorship payments to charities will be treated by the Treasury as having been made in return for advertising on behalf of the sponsor, thus subjecting the payment to income tax. In the proposed regulation, the Treasury concludes that a charity's use of a corporate sponsor's name in the title of a charitable event is a mere …