Property Tax Exemption Stripped from New Jersey Hospital

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A New Jersey medical center is struggling with the proper tax codes for a hospital that works both for profit and not for profit.
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Morristown Medical Center, a New Jersey hospital that has mixed non- and for-profit work, was recently stripped of its property tax exemption by a tax court judge in that state. The issue first came to court in 2006 and has only recently been settled.

The issue, according to the judge, is that the hospital, and perhaps others like it, has mixed its non- and for-profit actions and revenues so much that, from a financial point of view, it’s impossible to tell where one ends and the other begins. The judge defended his decision as an issue of fairness, specifically toward for-profit hospitals, arguing that doing for profit work while sheltered under non-profit tax exemptions creates an unfair advantage for Morristown and possibly other hospitals.

The mayor of Morristown and others have shown their support for the hospital and are hoping to find a way to preserve the tax exemption for that hospital and others. Non-profit hospitals stripped of property tax exemptions could end up owing as much as $2.5 to 3 million dollars a year.

There are rumblings in the state legislature that such hospitals need some kind of state law to protect them, and hospitals that mix non- and for-profit activates in other states should be concerned, too. Although the ruling is currently only applicable to Morristown Medical Center, it could become precedent across the state, and then across the county, which is why so many people are concerned about acting on it quickly.

The hospital is reviewing appeal options, but turning to the state legislature might be the safest bet. An Illinois hospital faced similar problems recently, and that state moved to ensure its property tax exemptions despite its dabbling in for-profit work. Legislators in New Jersey have pointed to Illinois as a possible model, which, if they adopted something similar, could result in a precedent for the rest of the country.

Myelin Repair Foundation to Close in August

Tablet and stethoscope

The Myelin Repair Foundation will be closing at the end of August.
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The Myelin Repair Foundation, a Bay Area nonprofit that has made incredible breakthroughs in supporting multiple sclerosis treatments, announced Monday that it will be closing its doors on August 31 due to lack of funding.

Founded in 2003 by Scott Johnson, himself a sufferer of MS, the MRF operates on a comparatively small budget—about $5 million a year—to develop and research new drugs and treatment options. In particular, MRF has focused on research looking into ways to restore myelin, a substance that protects nerve cells and is attacked by MS.

Their work has been largely successful so far: in 2013, the MRF licensed one model to biotech firm Biogen Inc. They also went beyond just partnering with industry members and not only funded academic research, but also set up its own labs to accelerate research into the degradation of myelin.

The MRF’s biggest success occurred this past April, when presented a long-forgotten high blood pressure drug to the NationaL Institutes of Health as a way to stop—or even repair—the damage MS does to the myelin sheaths that protect nerve cells.

“Ironically, even with tremendous success on the research side, we have struggled with raising enough money to keep up with our extraordinarily low research costs,” Johnson wrote in a letter to supporters.

This is likely due in large part to the fact that 56 donors provided 92% of the MRF’s revenue. Over the life of the organization, $55 million was raised from individuals and foundations in 29 countries. But this is small potatoes compared to other nonprofits: The National Multiple Sclerosis Society raised $250 million just last year.

Looking ahead, Johnson still believes a myelin-repair drug could be on the market within as few as ten years. He’s also proud of what the MRF has done, even though its time has been cut short.

“What we have accomplished will live on through the people we have worked with and the discoveries we have made,” he said.

 

Study Ranks Quality of Charity Markets Across Country

Colorful charity collection tins

A new study ranks cities in terms of how their charities are organized and run.
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A lot of factors go into charity work, and a lot of factors go into evaluating charities. A recent study of the 30 largest charity markets–that is, the cities that have the largest philanthropic effect–has some interesting information to share. The 30 markets, which were reviewed by charity watchdog Charity Navigator, account for 65% of the total revenue and 66% of spending out of the charities that the website monitors. That means that this survey covered about two-thirds of American charities.

The survey looked at several categories. Market size is based on how many charities there are in that market. Not surprisingly, New York City came in first with 932 charities, while Colorado Springs and Indianapolis have only 49 each. That’s not to say that all those NYC charities are equal. They have to compete for the same people, though NYC is a city that spends on lot on charity, with donations topping $4.6 million. Miami’s donors are more generous, though, topping $5 million.

Of the markets reviewed, Indianapolis charities spend the least on actual programs–only 79% of their budget–while Detroit charities spend the most, coming in at 85%. Unfortunately, Detroit charities also have some of the slowest growth in the country. Accountability and transparency are buzzwords of late in the philanthropic world, and Charity Navigator has long been concerned with these factors. Hipster haven Portland is among the most transparent markets in the country, while its northern neighbor Seattle, home to numerous security-conscious tech firms, is among the least transparent markets.

There’s a lot of useful information in the study. In general, the success of a given charity is partly environmental: the more in line a given organization is with the attitudes and concerns of its home town, the more likely it is to succeed there, and to branch out into other locations.

State of California in Legal Battle Over Identifying Donors

Logo for the CCP

The CCP doesn’t want California charities to have to reveal the names of donors.
Image: Campaignfreedom.org

The Center for Competitive Politics (CCP) has filed an injunction to stop California from enacting state laws that would require them to identify donors who gave more than $5,000 dollars. The State of California requires unredacted Schedule B forms, which would identify such donors, in order to pursue anti-fraud investigations, should they occur. By requiring this information up front, it saves them time when such investigations do occur, as they would otherwise have to wait for warrants and give potentially fraudulent charities or donors time to hide information. This is especially relevant following the recent discovery that four cancer charities in the US defrauded donors of millions of dollars.

The CCP claims that having to declare their donors is a violation of the First Amendment rights of those donors, though the court maintains that there is no significant burden on those donors because of this action.

The issue is part of an ongoing conversation about the transparency and accountability of non-profits and charities, not all of which are created equal. Several other states have similar laws, and several more are considering them, waiting for California to resolve this issue and set a precedent. The CCP is concerned that such attitudes could spread and continue to “violate” free speech, something that they’re very concerned about.

The CCP’s biggest concern seems to be that, if they identify their donors, those donors might not be able to use CCP to dodge paying taxes. Other non-profits that have challenged similar laws include Citizens United, the group that managed to get the federal government to treat corporations as people, and the Americans For Prosperity Foundation, the Koch brothers-backed group trying to dismantle the Affordable Care Act. These groups are specifically political, and tax-deductible donations to them are essentially campaign donations for conservative politicians. That flies in the face of the logic of tax-deductible donations, which are supposed to do more good for society faster than paying taxes would.

Human Rights Campaign Not as Equality Focused as Advertised

Diverse headshots

A recent survey shows that the Human Rights Campaign has some work to do when it comes to diversity.
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The Human Rights Campaign (HRC) is the largest LGBT civil rights advocacy and lobbying group in the United States. Chances are you’ve seen their equal sign stickers on cars before. They built their name by pushing for the legalization of gay marriage, a worthy cause to be sure, but their internal operations don’t quite live up to their message of equality.

A recent report by The Pipeline Project surveyed a number of HRC employees, and the results weren’t all that favorable. They found that there is a definite feeling that the HRC is a “white gay men’s club,” with leadership positions being held almost exclusively by gay white men. Employees claim that advancement is significantly easier if you fall into that group, and that everyone else is held back. Women, gay or straight, have faced sexism from their male colleagues, and trans staff members frequently feel tokenized. And at this point, there’s been no real effort to move toward diversity–the voices of concerned staffers are often silenced, even by the HR department, who urge them to keep their mouths shut and let more conservative people handle it.

HRC leadership has, of course, claimed that they are working to address the problems, but it seems painfully ironic that such problems exist in the first place. Diversity is important to any organization, non-profits included. Diverse employees and especially leadership gives an organization a wellspring of ideas and motivations to keep them working on problems that existing solutions cannot solve.

But more so, as a group that purports to fight for equality, HRC hasn’t been putting their money where their mouth is. Problems like this are part of why there needs to be more oversight of non-profits and charities in the US. If the HRC were more accountable, it’s possible that these issues would have come to light and been solved sooner. In the meantime, hopefully they learn from this report and start embracing the diversity and equality that they claim to fight for.

Memorial Sloane Kettering Receives Record Gift From David Koch

Doctors and nurses in a hospital hall

David Koch has given Memorial Sloane Kettering the biggest donation of his philanthropic career.
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Some have an incredibly big heart for giving—this is certainly true for David Koch. On Wednesday May 20th, the Memorial Sloan Kettering Cancer Center announced that it had received a record-breaking gift of $150 million from the influential American businessman, philanthropist, political activist, and chemical engineer. This money will go towards building the David Koch Innovative Patient Care Facility.

Memorial Sloan Kettering (MSK) is the world’s oldest and largest private cancer center, having operated for more than 130 years. Today, they are one of 41 different National Cancer Institute-designated Comprehensive Cancer Centers. They have achieved their success, in part, from their unique fusion of medical expertise and business prowess. With leaders like Chief Medical Officer José Baselga, MD, PhD, and board of trustees member William Ford (CEO of General Atlantic), MSK is able to provide the very best care for their patients while also following business best practices.

The David Koch building will be 23 stories tall and is in development between East 73rd and 74th Streets, overlooking the FDR Drive.

“We are deeply grateful to David for his visionary generosity, which will help ensure that Memorial Sloan Kettering continues to set the pace for advances in patient care,” said Douglas A. Warner III, Chairman of the Boards of Overseers and Managers. “The David H. Koch Center for Cancer Care will accommodate the most sophisticated therapies and constantly-evolving technologies in a setting that enhances the experience of our patients and their families.”

This is the biggest that Koch’s large philanthropic heart has ever been—the $150 million donation is the single largest donation ever made by the philanthropist. Koch’s overall philanthropic contributions span a wide variety of organizations and good causes, and his donation total is now near $1.3 billion in sum. That’s a lot of giving!

David Koch truly is an inspiration to all of us when it comes to having a big heart and donating to a worthy cause.

Xprize to Host Competition for Best Adult Literacy App

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Xprize’s latest competition will encourage programmers to create an app to support adult literacy.
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Xprize announced today that it will be coordinating with the Barbara Bush Foundation for Family Literacy and the Dollar General Literacy Foundation on a literacy campaign for adults. The competition will encourage participants to build mobile apps to promote adult literacy, with a total of $7 million prize money on the line.

Last year Xprize ran its first literacy-related campaign, which provided $15 million to improve children’s literacy across the world. This latest competition specifically focuses on adults, however, as they are also facing literacy issues and often don’t get the support that children do.

“What we want to do is really kick-start this ed-tech market for adults, because we know that ed-tech market for kids is booming,” said Jennifer Bravo, senior manager of prize development at XPrize. “There’s not too much out there for adults.”

Liza McFadden, CEO of the Barbara Bush Foundation, said that there are currently 36 million adults in the US who read below a third grade level, and less than 1% of these adults are enrolled in literacy courses. Mobile apps could have a chance of reaching these people, who may not have time for a full class or who are worried about the stigma of being unable to read efficiently as an adult.

The competition will begin with a six-month sign up period, followed by 18 months of product development. Xprize staff will be on hand to help bring together programmers and educational experts to form teams that can get the best results. After the development period, the top five teams will advance to a 12-month field test, culminating in a $4 million grand prize for the product that performs best across all adult participants. There will also be prizes for all the finalist teams, for teams with the best performance for native English speakers and non-native English speakers, and for the city that does the best job of promoting its finalist.

Chinese Gaming Company Wins Lunch With Warren Buffett

Warren Buffet search result

A Chinese gaming company won the Glide charity auction and will have lunch with investor Warren Buffett.
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Beijing gaming company Beijing gaming company Da Lian Zeus Entertainment Co. won this year’s charity auction for lunch with Warren Buffett. The tongue-in-cheek bid of $2,345,678 isn’t the highest bid the charity auction has ever seen, but it definitely ranked quite high on the amounts bid in the past few years.

The auction, hosted by the Glide Foundation in San Francisco, raises money to help Bay Area homeless and poor. The winning bidder receives the opportunity to have lunch with Warren Buffett and pick his brain about his expansive experience in investing and business.

That the winner was an international donor isn’t surprising. Since moving the bidding process online, the charity auction has become available to business people around the world. And Buffet’s Berkshire Hathaway has been gaining an increasing number of fans in China recently, evidenced by the fact that more than 200 Chinese investors attended the Berkshire annual meeting in Omaha last month.

This year’s auction began on May 31 and closed last Friday. There were 76 bids from eight bidders. Historically, the winner has been an individual; this is the first year an entry under a company name has won.

Buffett explained that the shared meal usually lasts between three and four hours and takes place at the New York steakhouse Smith & Wollensky. The restaurant reportedly donates about $10,000 every year to the Glide Foundation for the right to host the meal.

“Every year, it’s an interesting experience for me,” said Buffett in an interview. “I’ve met a lot of great people in connection with it. Made new friends. Hired a person. Had a lot of good steaks, so I can’t complain.”

His connection with Glide began thanks to the work his first wife did with the organization. Since her death in 2004, Buffett has continued to help raise about $18 billion every year for the organization through this fundraiser.

Last year’s winning bid was $2.16 million from Singaporean Andy Chua.

UK Charity Asks People to Donate £100,000 Each With Unsolicited Mailer

Junk mail coming through mail slot

A third party data error caused many UK residents to receive unreasonable requests for donations to the Children’s Society.
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According to The Daily Mail, the Children’s Society, a charity in the United Kingdom, recently sent out 20,000 letters asking for £100,000 each, in order to fund aid workers through Britain and Wales. This is a lot of money for anyone to donate, equal to about $152,615 US. The real problem is that many people who received these letters–at least, the 170 people who complained–don’t have anywhere near that kind of money. Many were pensioners who make around £122 a week to live on.

The Children’s Society replied that, of course, they were very sorry about the issue and that these people weren’t supposed to be targeted in that campaign. They claimed that, like many charities, they rely on third-party data gathering efforts to provide them with information about potential donors. While they usually rely on that data unquestioningly, this time it was obviously in error.

That charities this large rely on third-party data comes as no surprise, but it does raise at least one problem with the whole system: if you rely on third-party data, you have to verify that data to some extent. Verifying everything that third-party research tells you would take almost as much time as doing the research in the first place, which is likely why it doesn’t get done.

But people are understandably upset about this letter campaign. Unsolicited mail is never really welcome, and it’s not an efficient way to locate donors or drum up donations. But there were certainly people in that mass mailing campaign who, if approached in a more reasonable way, might have been willing to help the Children’s Society. Likely they won’t now, seeing them as greedy, grasping, and, if they’ve followed the story, incompetent.

Running a charity requires a certain balance between the needs of those you’re helping and the situation of those you’re asking for help. Showing that you don’t respect the latter makes it harder to help the former.

J.C. Flowers Foundation Works with Thomas Edwards on the Harlem Parolee

Harlem

The Harlem Parolee Initiative is creating partnerships to support ex-cons’ reentry into society.
Image: Shutterstock

The J.C. Flowers Foundation is now working with Thomas Edwards on their Harlem Parolee Initiative.

The Harlem Parolee Initiative started in 2010, when the J.C. Flowers Foundation was asked to pilot an innovative partnership among government, academic, and faith-based organizations, designed to help re-integrate recent parolees into Harlem’s vibrant community.

As stated on the J.C. Flowers Foundation’s website, most of the parolees—predominantly young men of color—are released into an environment of poverty, unemployment, and unstable housing which can have a huge influence on their lives and can even lead to high re-incarceration rates. In fact, these numbers shake out to 30% within a year of release and 42% within three years.

The Harlem Parolee Initiative also works with strong partners including:

  • Harlem Community Justice Center
  • Interfaith Center of New York
  • Harvard Kennedy School of Government—Program in Criminal Justice Policy & Management

Luckily, the J.C. Flowers Foundation, founded by J. Christopher Flowers, is now working with Thomas Edwards to give Harlem ex-cons a chance to find success after their release. Thomas Edwards is a former bank-robber who was released last year. He knows the struggles of the parolees in the program and is a great asset to the organization for that reason.

Edwards not only wants to help parolees re-enter the Harlem community; he also wants to keep members of the community from going to jail in the first place.

Why Harlem?

  • Manhattan has the highest number of parolees of any county in the country.
  • Upper Manhattan receives more than 2,200 parolees each year.
  • One seven-block stretch in Harlem is known as a “re-entry corridor” where one in 20 men has been incarcerated.
  • A strong grassroots community exists that is willing to partner on a solution to this urgent, endemic problem.

You can view a full video of an interview with J. Christopher Flowers and Thomas Edwards here.

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