Mission & Vision statement updated

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Re: Mission & Vision statement updated

Ray Saintonge
Anthony wrote:

>On 4/26/07, Thomas Dalton <[hidden email]> wrote:
>  
>
>>>>I don't know the details, but it is common sense that such a law
>>>>exists. I can't found a charity to help cure cancer, get lots of
>>>>donations, and then change the charity to one that provides caviare to
>>>>aristocrats.
>>>>        
>>>>
>>>No, you obviously can't change a charity into a non-charity without
>>>getting into trouble with the IRS.  But that doesn't mean that you
>>>need IRS approval to make any change to your mission statement.
>>>      
>>>
>>I said going from a cancer charity to a caviare *charity*. Any
>>non-profit organisation that follows the appropriate rules can be a
>>charity, there is no legal connection between "charity" and the
>>subjective concept of "good cause".
>>    
>>
>Well, I'm not convinced that providing caviar(*) to aristocrats would
>ever be considered a charitable purpose by the IRS.  But if it is,
>then I don't see any reason the IRS would have a problem with it.
>State law governing non-profit organizations, on the other hand, might
>very well have something to say about it.
>
The essence of straw man arguments is to propose a situation that is
ridiculously unlikely (like the caviar charity), and proceed to use
arguments against it to serve in more sensible circumstances.  
Converting a charity established to cure lung cancer into one that
treats emphysema would be a more likely situation.

Ec


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Re: Mission & Vision statement updated

Ray Saintonge
In reply to this post by Anthony DiPierro
Anthony wrote:

>On 4/26/07, Thomas Dalton <[hidden email]> wrote:
>  
>
>>>>Just a quick point here: the Foundation may not change its mission  statement
>>>>without an official determination letter from the IRS.
>>>>        
>>>>
>>>Can you please provide us with the law or regulation which says this?
>>>Can you also let us know the methods by which one can obtain such a
>>>determination letter?  Are you saying an entirely new Form 1023 has to
>>>be submitted?
>>>      
>>>
>>I don't know the details, but it is common sense that such a law
>>exists.
>>    
>>
>Some more information, from the IRS website:
>http://www.irs.gov/charities/charitable/article/0,,id=123213,00.html
>
>"The IRS will rule on the tax consequence of proposed changes to an
>organization's purposes or activities. Thus, if you are unsure about
>whether proposed changes are consistent with your status as an exempt
>organization or as a public charity (if applicable), you may want to
>request a private letter ruling or determination letter."
>
>"In some areas, the law requires that an organization notify the
>Internal Revenue Service or receive an advance determination before
>undertaking a transaction resulting in certain tax consequences."
>
One point that came up earlier about 501(c)(3)'s had to do with the
distribution of assets in the event of dissolution.  It was stated at
that time that the distribution had to be to another 501(c)(3) in the
United States.  After looking at that section in the code and the
regulations I find nothing that says that the assets must go to an
organization in the United States.  It appears sufficient that the
receiving organization be use them for putposes outlined in 501(c)(3).

Ec


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Re: Mission & Vision statement updated

Thomas Dalton
In reply to this post by Anthony DiPierro
> Well, I'm not convinced that providing caviar(*) to aristocrats would
> ever be considered a charitable purpose by the IRS.  But if it is,
> then I don't see any reason the IRS would have a problem with it.
> State law governing non-profit organizations, on the other hand, might
> very well have something to say about it.

How precise are the IRS regulations? How is giving caviar (and yes,
that is what I meant, thanks. I should learn not to trust
spellcheckers to know what I'm talking about) to aristocrats different
than giving baked beans to orphans (which presumably would count as
charitable)? The IRS regulations are presumably designed to be
objective, and it's very difficult to come up with a working objective
definition of charitable.

> I also don't think the example you gave is anything remotely close to
> the situation at hand.

That's for the authorities to decide, though. I was giving an extreme
example, yes, it's easier to make it clear what you are talking about
by going to an extreme, but the basic concept is the same. There is a
line somewhere between changes than are acceptable and those that
aren't, but that line is drawn by the IRS, not foundation-l.

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Re: Mission & Vision statement updated

Thomas Dalton
In reply to this post by Ray Saintonge
> The essence of straw man arguments is to propose a situation that is
> ridiculously unlikely (like the caviar charity), and proceed to use
> arguments against it to serve in more sensible circumstances.
> Converting a charity established to cure lung cancer into one that
> treats emphysema would be a more likely situation.

That's entirely subjective though. Why are emphysema patients more
deserving of treatment than aristocrats are deserving of caviar?
Purely because of your values. Determining if something is charitable
should be an objective exercise, otherwise it doesn't work.

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Re: Mission & Vision statement updated

Anthony DiPierro
In reply to this post by Thomas Dalton
On 4/27/07, Thomas Dalton <[hidden email]> wrote:

> > Well, I'm not convinced that providing caviar(*) to aristocrats would
> > ever be considered a charitable purpose by the IRS.  But if it is,
> > then I don't see any reason the IRS would have a problem with it.
> > State law governing non-profit organizations, on the other hand, might
> > very well have something to say about it.
>
> How precise are the IRS regulations? How is giving caviar (and yes,
> that is what I meant, thanks. I should learn not to trust
> spellcheckers to know what I'm talking about) to aristocrats different
> than giving baked beans to orphans (which presumably would count as
> charitable)? The IRS regulations are presumably designed to be
> objective, and it's very difficult to come up with a working objective
> definition of charitable.
>
The law is worded horribly imprecisely: "Corporations...organized and
operated exclusively for religious, charitable, scientific, testing
for public safety, literary, or educational purposes, or to foster
national or international amateur sports competition (but only if no
part of its activities involve the provision of athletic facilities or
equipment), or for the prevention of cruelty to children or animals,
no part of the net earnings of which inures to the benefit of any
private shareholder or individual..."

So no, it's not at all objective under the law (incidentally, the law
is rarely objective, that's why we have judges and lawyers).  The
revenue rulings, case law, and other precedents will give you a good
idea of what qualifies, and you can get a private letter ruling or a
determination letter if you describe your case to the IRS, but I doubt
there is any case law on providing caviar to aristocrats.

> > I also don't think the example you gave is anything remotely close to
> > the situation at hand.
>
> That's for the authorities to decide, though. I was giving an extreme
> example, yes, it's easier to make it clear what you are talking about
> by going to an extreme, but the basic concept is the same. There is a
> line somewhere between changes than are acceptable and those that
> aren't, but that line is drawn by the IRS, not foundation-l.
>
Believe it or not, if you look at my posts I quite clearly refrained
from drawing the line.  The statement made by Danny which I am
questioning is whether or not a charity *must* get a *determination
letter* *before* changing its *mission statement*.

But now I need to object.  I don't think it's only for the authorities
to decide.  The authorities don't run the WMF, the board does.  It's
the board who has to decide, in the first instance, whether or not
they think the changes they make are jeopardizing the charitable
status of the foundation.  Only if the foundation is audited or a
ruling requested would it be for the IRS to decide.  And then even
that decision can be appealed, at which point it's up to an appeals
officer to decide.  Then the tax courts can decide, or the federal
courts if you choose to go that route.  Ultimately you might even get
the Supreme Court of the United States to decide.  But we're getting
the cart before the horse here.  You don't always have to poll the
justices of the Supreme Court before changing a few words in your
mission statement.

Anthony

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Re: Mission & Vision statement updated

Thomas Dalton
> (incidentally, the law
> is rarely objective, that's why we have judges and lawyers)

By my understanding, that's why we have *juries*. Judges are meant to
be objective, and leave subjective decisions to the jury.

I pretty much agree with the key points of the rest of your email.

(Incidentally, I've just been researching UK law on the issue, and the
key phrase there is "public benefit". What the benefits are seems to
be pretty much irrelevant, as long as there are some (and they
outweigh any harm), but they are very strict on the definition of
public. I'm not sure if aristocrats would qualify, mainly because I'm
not sure what the exact definition of an aristocrat is.)

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Re: Mission & Vision statement updated

Anthony DiPierro
On 4/27/07, Thomas Dalton <[hidden email]> wrote:
> > (incidentally, the law
> > is rarely objective, that's why we have judges and lawyers)
>
> By my understanding, that's why we have *juries*. Judges are meant to
> be objective, and leave subjective decisions to the jury.
>
I actually originally had written "and juries" but I specifically
removed it because juries are there to determine issues of fact, not
issues of law.  Questions of law are supposed to be decided by judges,
not juries.

Take fair use, for instance.  This is an utterly subjective topic, and
in most of the case law juries don't ever get involved.

> I pretty much agree with the key points of the rest of your email.
>
> (Incidentally, I've just been researching UK law on the issue, and the
> key phrase there is "public benefit". What the benefits are seems to
> be pretty much irrelevant, as long as there are some (and they
> outweigh any harm), but they are very strict on the definition of
> public. I'm not sure if aristocrats would qualify, mainly because I'm
> not sure what the exact definition of an aristocrat is.)
>
Had you chosen the example of providing caviar to the hungry I would
have been a lot more wishy-washy in my response :).

Anthony

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Re: Mission & Vision statement updated

Cary Bass-3
Anthony wrote:
> Had you chosen the example of providing caviar to the hungry I would
> have been a lot more wishy-washy in my response :).
>
> Anthony
>
>  
We do not have to provide caviar to the hungry.  They can eat cake.   :-)
</humour>

Cary

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Re: Mission & Vision statement updated

Gerard Meijssen-3
In reply to this post by Thomas Dalton
Hoi,
Who said we have juries ? We don't
Thanks,
    GerardM

On 4/27/07, Thomas Dalton <[hidden email]> wrote:

>
> > (incidentally, the law
> > is rarely objective, that's why we have judges and lawyers)
>
> By my understanding, that's why we have *juries*. Judges are meant to
> be objective, and leave subjective decisions to the jury.
>
> I pretty much agree with the key points of the rest of your email.
>
> (Incidentally, I've just been researching UK law on the issue, and the
> key phrase there is "public benefit". What the benefits are seems to
> be pretty much irrelevant, as long as there are some (and they
> outweigh any harm), but they are very strict on the definition of
> public. I'm not sure if aristocrats would qualify, mainly because I'm
> not sure what the exact definition of an aristocrat is.)
>
> _______________________________________________
> foundation-l mailing list
> [hidden email]
> http://lists.wikimedia.org/mailman/listinfo/foundation-l
>
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Re: Mission & Vision statement updated

Thomas Dalton
In reply to this post by Anthony DiPierro
> I actually originally had written "and juries" but I specifically
> removed it because juries are there to determine issues of fact, not
> issues of law.  Questions of law are supposed to be decided by judges,
> not juries.
>
> Take fair use, for instance.  This is an utterly subjective topic, and
> in most of the case law juries don't ever get involved.

There are cases where juries determine the law. For example,
harassment is (if memory serves) defined as something a "reasonable
person" would consider harassment. The reasonable people in question
are the members of the jury.

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Re: Mission & Vision statement updated

Rich Holton
In reply to this post by Thomas Dalton
Thomas Dalton wrote:

>> The essence of straw man arguments is to propose a situation that is
>> ridiculously unlikely (like the caviar charity), and proceed to use
>> arguments against it to serve in more sensible circumstances.
>> Converting a charity established to cure lung cancer into one that
>> treats emphysema would be a more likely situation.
>
> That's entirely subjective though. Why are emphysema patients more
> deserving of treatment than aristocrats are deserving of caviar?
> Purely because of your values. Determining if something is charitable
> should be an objective exercise, otherwise it doesn't work.
>
Huh?
Why would making this decision based on values make "it" not work? Or
are you meaning that the values should be objectively defined and evaluated?

"Emphysema patients are more deserving of charitable assistance than
caviar-less aristocrats." is a statement of values.

"Caviar is defined as a luxury, and an organization dedicated to
providing it does not qualify for charitable status." is a value-based
statement that is objectively applicable.


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Re: Mission & Vision statement updated

Thomas Dalton
> Huh?
> Why would making this decision based on values make "it" not work? Or
> are you meaning that the values should be objectively defined and evaluated?

Not everyone's values are the same, that's why it wouldn't work.

> "Emphysema patients are more deserving of charitable assistance than
> caviar-less aristocrats." is a statement of values.
>
> "Caviar is defined as a luxury, and an organization dedicated to
> providing it does not qualify for charitable status." is a value-based
> statement that is objectively applicable.

Defined as a luxury by whom? What you consider a luxury generally
depends on your standard of living. For many people in the world, a
car is a luxury, for a typical westerner, it's considered a necessity.

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Re: Mission & Vision statement updated

Rich Holton
Thomas Dalton wrote:

>> Huh?
>> Why would making this decision based on values make "it" not work? Or
>> are you meaning that the values should be objectively defined and evaluated?
>
> Not everyone's values are the same, that's why it wouldn't work.
>
>> "Emphysema patients are more deserving of charitable assistance than
>> caviar-less aristocrats." is a statement of values.
>>
>> "Caviar is defined as a luxury, and an organization dedicated to
>> providing it does not qualify for charitable status." is a value-based
>> statement that is objectively applicable.
>
> Defined as a luxury by whom? What you consider a luxury generally
> depends on your standard of living. For many people in the world, a
> car is a luxury, for a typical westerner, it's considered a necessity.
>

But nothing you've said has any bearing on it working. You, based on
your values, may not *like* how it works. But it would work just fine.
You're confusing what you'd like with what actually works.

If you really think there are *any* important decisions that are made
devoid of values, you are hugely mistaken.

-Rich

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