Respecting Foundation and Charity Autonomy: How Public is Private Philanthropy?

47 Pages Posted: 15 Dec 2009 Last revised: 14 Aug 2012

Date Written: December 13, 2009

Abstract

Recent years have seen a disturbing increase in legal proposals by the public and government officials to interfere with the governance, missions, strategies, and decision-making of foundations and other charities. Underlying much of these debates is the premise – stated or merely presumed – that foundation and charity assets are “public money” and that such entities therefore are subject to various public mandates or standards about their structure, operations, and policies. The authors’ experiences and research reveal three “myths” that, singly or collectively, underlie claims that charitable assets are public money. The first myth conceives of charities as shadow governments due to the requirement that they have public purposes and are subject to attorney general parens patriae oversight. The second myth asserts that, because philanthropies exist under state charters, they are government agencies, “state actors,” or quasi-public bodies subject to constitutional constraints or accountable to the public in the same way as is government. The third myth asserts that revenue forgone on deductible charitable contributions and the tax exemption are a contribution from the state that entitles the state to a say in nonprofit governance structure, operations, and decision-making. In debunking these myths, this paper demonstrates the lack of legal support for the “public money” view of charitable assets.

Keywords: philanthropy, charity, private foundation, nonprofit, non-profit, tax exempt, public money, 501(c)(3)

Suggested Citation

Brody, Evelyn and Tyler, John E., Respecting Foundation and Charity Autonomy: How Public is Private Philanthropy? (December 13, 2009). Chicago-Kent Law Review, 2010. Available at SSRN: https://ssrn.com/abstract=1522596 or http://dx.doi.org/10.2139/ssrn.1522596

Evelyn Brody

Chicago-Kent College of Law ( email )

565 West Adams St.
Chicago, IL 60661
United States
312-906-5276 (Phone)
312-906-5280 (Fax)

John E. Tyler (Contact Author)

Ewing Marion Kauffman Foundation ( email )

4801 Rockhill Road
Kansas City, MO 64110-2046
United States
816-932-1293 (Phone)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

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