Source: https://futuristguy.wordpress.com/2014/09/03/mark-driscoll-and-mars-hill-church-research-guide-part-2c/
Timestamp: 2020-01-24 21:37:40
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Mark Driscoll and Mars Hill Church Research Guide – Part 2C – Five Potential Legal/Ethical Problems for Mars Hill Church, Mark Driscoll, and Its Other Leaders | futuristguy
These all relate directly to the larger question of whether Mars Hill is truly functioning “in the public interest” – as the IRS requires of tax-exempt non-profits – or whether it has succumbed to benefitting insider individuals and related entities, such as the various LLCs and trusts laid out in Part 2A.
And with that, now on to the tutorials with summary descriptions of five key issues and some suggestions of how they relate to the Mars Hill Church organizational complex.
Non-profit corporations gain IRS tax-exempt status in part by functioning in the public interest. If they change into operating instead for the private benefit of inside members or related organizations, that is called inurement. In extreme cases of inurement, the organization looks more like a sole proprietorship business than a non-profit enterprise. Activities that can turn out to be inurement may involve misuse of the tax-exempt organization’s property, money, credit, goods, services, facilities, compensation, reimbursement of expenses, or other assets transferred to or benefiting individuals. Inurement is illegal. It can also lead to the IRS revoking the privilege of tax-exempt status.
Total compensation package for Executive Elders, and whether any of those constitute “excessive compensation.”
Restricted/Designated Solicited Funds
1. Does a governing body of a non-profit organization (ie: Church Council, Church Board, Deacons, etc.) have the right to reassign monies from a designated fund for General Fund deficiencies? [T]he governing body does NOT have the right to reassign monies if the either 1) the designation was solicited for that purpose by the church […] or 2) the unsolicited designation was honored without disclaimer of right to redirect. The only thing that can be done is to go back to the donor and request permission from them to redirect the funds. Hopefully, if survival of the church is at stake, the donor would be eager to help.
2. As the treasurer, am I legally / personally responsible should any misappropriation of funds be inadvertently (as directed by any church governing body) or intentionally made? On question #2, you would not likely be liable from an IRS perspective assuming you are not a board member, officer or trustee. However, if your title of treasurer is that of an officer, you do have liability. From a fiduciary perspective, you owe it to the church to do the right thing.
In the Compliance Guide for 501(c)(3) Public Charities, the IRS stresses that they do not get overly specific in requirements for specific forms of governance, or particular policies and procedures. However, they are equally clear that they expect tax-exempt organizations to function with “sound operating and compliance with tax law,” and that they have legal authorization (Section 6033 – Returns by exempt organizations) to ask for information including on governance relevant to those concerns.
Top 15 Non-profit Board Governance Mistakes (From a Legal Perspective), by Ellis Carter (CharityLawyer, October 5, 2009).
ARTICLES SPECIFIC TO MARS HILL TO BE ADDED.
Also, see Warren Throckmorton’s blog on Mars Hill non-disclosure agreements and non-compete agreements.
Real Marriage Book, ResultSource Contract, and Mars Hill Church. You may want to go back to my earlier descriptions of some of the list of individuals, LLCs, Trusts, and other entities that seem to be intertwined in financial dealings involved with the Real Marriage book. You’ll find them in Part 2A (subsection on Concluding Thoughts and an Example for Homework / reproduced below) and Part 2C (subsection on Inurement – Potential Application to Mars Hill).
Concluding Thoughts and an Example for Homework
Hopefully this lay-of-the-land grand tour helps understand why it has been complicated to find information on some entities, or conduct comprehensive analysis on relevant issues about Mars Hill. As an example of one of the most complicated problems, consider the following. (And attempts to track this, plus where more specific questions of legal/ethical issues arise, will be in Part 2B.)
09/07/2014 – Addition of some subheads, and clarifications on a few other subheads and sentences.
12/08/2014 and 12/16/2014 – Addition of exploration/research article sources at end of various sections.
← Mark Driscoll and Mars Hill Church Research Guide – Part 2B – General Background on Top Legal Problems for Non-Profits
Mark Driscoll and Mars Hill Church Research Guide – Part 2D – Pulling It All Together →
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