Joint Ventures Involving Tax-Exempt Organizations, 4th Edition

Preface

It seems that whenever I sit down to write the preface of an annual supplement or new edition, I'm struck by the increasing challenges exempt organizations face in raising and keeping financial resources to fund their exempt programs…. We do not yet know whether the anticipated reduction of charitable giving due to the increased standard deduction will occur long term, but, as reported in “Giving USA 2019: The Annual Report on Philanthropy of the Year 2018,” individual giving declined 3.4 percent adjusted for inflation.¹ Of course, all of these factors lead to greater pressure for organizations to be creative in their approach to increasing revenue, including the participation in joint ventures.

The charitable sector has faced additional challenges because of media attention to alleged improprieties occurring at some high-profile organizations, with the so-called Varsity Blues and NRA investigations garnering much coverage. Varsity Blues involves criminal charges against a private college admissions advisor who accepted donations to a charity he had established in exchange for a promise of assistance in the admissions process to parents of college applicants.² The charges against the advisor, who has pled guilty, and the parents involve allegedly false representations regarding the abilities and qualifications of the student applicants. For our purposes, however, the more important factor relates to the basic structure of the transactions, whereby the parents claimed ...