Author: Casey S. Hale Created: 10/24/2012 8:26 AM
Casey Hale blog
By Casey Hale on 2/16/2021 12:42 PM

There is a widely held but misguided belief that a donor advised fund (“DAF”) is prohibited from making distributions to a private foundation. While the Pension Protection Act of 2006 imposed a myriad of restrictions on DAFs, it did not completely proscribe distributions from a DAF to a private foundation so long as the DAF sponsoring organization undertakes certain expenditure responsibility measures. Moreover, a DAF may make distributions to a private foundation even when a donor or donor advisor to the DAF is also a disqualified person with regard to the recipient private foundation.

Click here to read the complete White Paper.

By Casey Hale on 4/15/2020 9:30 AM
Yesterday, the Internal Revenue Service (the “Service”) issued an EO Update bulletin, which addressed nine topics relevant to tax-exempt organizations.
The first of those topics helped further clarify information contained in Notice 2020-23, which the Service issued on Friday, April 10, 2020. (In Notice 2020-23, the Service expanded the Covid-19 relief provided to affected taxpayers by, among other things, extending the filing deadline for Form 990-series returns as well as certain other forms and payments made by tax-exempt organizations.) In the bulletin, the Service explains that the recently authorized filing-deadline extension applies to several forms and tax payments required of tax-exempt organizations, including:
By Casey Hale on 12/21/2012 9:38 AM


Here's a short video on the history of the charitable deduction. Interestingly, just like today, it was on the Congressional chopping block back in 1917 when the country was faced with a huge budget crisis precipitated by World War I. It survived that crisis. But will it survive our current budget crisis almost 100 years later?

By Casey Hale on 12/20/2012 4:03 PM

A recent article published by The Chronicle of Philanthropy suggests that the nonprofit sector's efforts to convince the White House to preserve the charitable deduction may have paid off. The article indicates that the budget proposal the Obama administration gave to the Republicans earlier this week appears to preserve more generous write-offs for charitable deductions versus other deductions, such as mortgage interest, state taxes. etc. While White House officials have not yet confirmed the details, some Washington insiders are reporting that Obama's proposal preserves the charitable deduction's current rates. Of course, with all of the back and forth proposals, only time will tell where charitable deduction will end up. But still it is encouraging...
By Casey Hale on 12/19/2012 11:43 AM
The Service's publication earlier this year of Notice 2012-52 is a game changer for fiscal sponsorship. In that notice, the Service announces that going forward a donor may receive a charitable tax deduction for gifts to a domestic single-member limited liability company ("LLC") if the LLC is wholly owned by a 501(c)(3) organization. The Service will treat gifts to the single-member LLC just like a gift to the parent 501(c)(3) organization.

This is a great thing for 501(c)(3) organizations that engage in fiscal sponsorship and that house fiscally sponsored projects in wholly-owned single-member LLCs. Now donors that wish to support those fiscally-sponsored projects can make tax-deductible gifts directly to the project LLC. Whereas before, any tax-deductible gifts ultimately destined for a fiscally-sponsored LLC had to be channeled through the 501(c)(3) sponsor. This sometimes caused confusion for donors since the fiscally sponsored LLC could not raise funds for itself. Instead the staff of the fiscally-sponsored...
By Casey Hale on 12/14/2012 6:27 AM

For more in-depth information on the ongoing battle over the the charitable deduction and how it is affecting current gifts, the Nonprofit Law Prof Blog posted an entry yesterday that is definitely worth reading.

Also, here is a panel on Fox News discussing the fiscal cliff and the charitable deduction:


And on the other end of the media spectrum, here is MSNBC on the topic as well:


By Casey Hale on 12/13/2012 10:51 AM

The Washington Post published a story today covering the Obama Administration's struggle to convince the nonprofit sector to accept the administration's proposed curtailment of the charitable deduction. Needless to say, the White House is feeling significant push back from the nonprofit sector. Here's some of the key excerpts:

The White House and the nation’s most prominent charities are embroiled in a tense, behind-the-scenes debate over President Obama’s push to scale back the nearly century-old tax deduction on donations that the charities say is crucial for their financial health.

“It’s all castor oil,” said Diana Aviv, president of Independent Sector, an umbrella group representing many...
By Casey Hale on 12/7/2012 9:42 AM


2012 has been a significant year for Program Related Investments ("PRI") and even the White House is getting in on the act. The main reason this year has been so significant is that for the first time since 1972, the Internal Revenue Service is preparing to promulgate a new set of modernized PRI examples that it will tack onto the existing PRI examples in the Treasury Regulations.

PRIs are loans or capital investments made by a private foundation to further the private foundation's charitable purposes and not with the primary purpose of producing income or capital gains. And a PRI counts toward a private foundation's annual 5% distribution requirement.

While PRIs have been permissible under the Internal Revenue Code and supporting Treasury Regulations for more than 40 years now, their use by private foundations has lagged. Many point to outdated, less-than-clear Treasury...
By Casey Hale on 12/3/2012 1:24 PM

Forbes published an interesting article earlier this month predicting five ways social entrepreneurship will evolve over the next few years.  Only time will tell how accurate their crystal ball is.


By Casey Hale on 11/13/2012 10:01 AM

The Internal Revenue Service recently announced on its website that it mailed a Group Exemptions questionnaire to 2,000 randomly selected central organizations. The Service explains that the questionnaire will help it gather information to better understand how central organizations relate to and report about their subordinate group organizations. Here is a sample of the letter and questionnaire.

There are a couple of interesting aspects to the questionnaire. First, responding to the questionnaire is voluntary. Organizations that receive a questionnaire aren't required to respond to it. Second, a organization may only respond on-line through the Service's website. There's no other method available for an organization to respond to the questionnaire.

As with other compliance checks performed over the past few years by the Exempt Organizations unit, we'll likely see a report at some point based on the data the Service gathers using the questionnaire. Those reports are always informative and interesting and will provide interesting insights into organizations with a group exemption