[Foundation-l] Mission & Vision statement updated

[Anthony]

On 4/27/07, Thomas Dalton <thomas.dalton at gmail.com> 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