A time to take stock of foundations


There are more than one and a half million non-profitable organizations in the U.S., according to the National Center for Charitable Statistics. These and other comparative numbers come from Form 990-PF, an annual Internal Revenue Service information return that includes data on excise tax liability, charitable distributions, administrative expenditures, as well as income statement and balance sheet information. The IRS recognizes seven different categories of tax-exempt organizations, including everything from your neighborhood church to behemoths like the Ford Foundation. Its assets are estimated at $11 billion and in a three-month period at the end of 2012 [it was changing its fiscal year], it gave out some $130 million in grants. The Foundation is exempt from federal income tax but does pay excise taxes on some of its investment. It is no secret that the Foundation, almost from its inception, generally promoted liberal causes – to the consternation of the Ford Family with its longtime ultra-conservative history.
It is against this background that the growing controversy over the William Hillary and Cheksea Clinton Fund has to be examined. Although the arguments about the Foundation’s activities have already crashed the parade of contenders marching for the 1016 election of a new American president, there are two fundamental issues that have got lost in the shuffle:
1] Were contributions to the Foundation by foreign countries and foreign nationals used as bribery to obtain the support of Mrs. Clinton as Secretary of State and/or her husband, a former president, in seeking special privilege?
2] Were contributions to the Foundation used to promote the particular interests and welfare of the Clinton family and some of its closest supporters and collaborators rather than a broader spectrum of philanthropic enterprises?
Neither of these two questions is unknown in the annals of other non-profits organized by politicians or their supporters. It’s not a secret that tax exempt foundations are sometimes used with high salaries and expenses to accommodate members of families or their associates. Nor have politicians been exempt. John McCain, Rick Santorum, and Newt Gingrich, all have been involved in shady charitable organization problems. But none of these nor Mitt Romney’s Mormon foundation based on his family’s fortune became presidential campaign issues.
But Bill Clinton’s television appearances, less than his usual rhetorical genius, are unlikely to still the growing dispute over various aspects of the Clinton Foundation. Mrs. Clinton, of course, has thus far refused to discuss the issues publicly, and there is a suspicion that the campaign strategy is to hope that they will soon become old news, given the state of the world and the growing news spotlight on the bevy of yammering Republican contenders.
Whatever the outcome of the issue in the current public debate – and its role in the 2016 election – the problem festers and is one that needs national attention.
One way to achieve that would be for President Obama to appoint a presidential commission to examine the place of non-profits in our social, political and revenue system. Such a commission could well become the beginning of what is a general consensus that a complete overhaul of our tax code is an absolute necessity, but with suggestions on how to overcome all the political difficulties they would engender.
Obama might well accept such a proposal, if nothing else on the narrow political if unspoken belief he was extending some relief to his fellow Democrat contender and possible successor. The Clintons, of course, might accept it for just that same reason.
But despite these ulterior motives, such an examination under a bipartisan, prestigious group of public figures and experts would begin to unravel a growing problem of the increasing cognizance that the 16th amendment [the income tax] has failed to achieve its purpose and we need revolutionary solutions to reestablish social justice in funding the commonweal.
sws-05-04-15

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