Form St 04-20 - Recommendation For Disposition Page 6

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$1,169,579. Dept. Ex. No. 3. Assuming, arguendo, that this amount is in fact a charitable
contribution, it represents less than 8% of ABC’s total revenue for 2002. Looking only at
the financial information supplied by ABC, its charitable contributions are certainly
“incidental” in comparison to the fees it earns for providing blood related services.
I conclude from the Applicant’s Form 990 and the testimony at the evidentiary
hearing that ABC’s primary purpose is not exclusively charitable. ABC’s primary
purpose is to generate revenue by “providing blood related services.”
By providing
these services, ABC has an excess of revenue over expenses in year 2002 of $2,242,461,
or approximately 15% of its total revenue. In Sisters of St. Francis v. Board of Review,
231 Ill. 317, 321 (1907), the court stated that a charitable organization does not lose its
exemption by reason of the fact that those patients received by it who are able to pay are
required to do so, as long as all the money received by it is devoted to the general
purposes of the charity, and no portion of the money received by it is permitted to inure
to the benefit of any private individual engaged in managing the charity. No evidence
was presented at the hearing that ABC’s $2,242,461 excess of revenue over expenses in
2002 was devoted or earmarked for charitable purposes and I am unable to conclude that
these funds are held in trust for charitable purposes.
Another guideline from Methodist Old People’s Home is that a charity not
provide gain or profit in a private sense to any person connected with it. The financial
information provided by ABC does not indicate that the fees it earns from providing
blood related services do not inure to the benefit of individuals engaged in managing the
organization. ABC’s Form 990 shows that Jane Doe, “Vice President/Secretary” of ABC
earned compensation of $180,879 in 2002 plus “contributions to employee benefit plans”
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