2004 Spring, 8. Charitable Trusts Unit.

AuthorBy Attorney Michael S. DeLucia

New Hampshire Bar Journal

2004.

2004 Spring, 8.

Charitable Trusts Unit

New Hampshire Bar Journal Spring 2004, Volume 45, Number 1 Charitable Trusts Unit By Attorney Michael S. DeLucia

I. INTRODUCTION

The Charitable Trusts Unit is now marking its 61st anniversary (1943-2004). In 1943, Attorney General Frank Kenison established the Charitable Trusts Unit within the Attorney General's Office to deal with growing abuses in the charitable sector. By 2003, a majority of other states had adopted laws similar to those in New Hampshire regarding the administration and enforcement of charitable trusts. New Hampshire, thus, became the first state not only to create a structure for oversight of charitable trusts but to also codify the Attorney General's common law jurisdiction over charitable trusts.(EN1)

Since 1997, the Legislature in New Hampshire has enacted new statutory mandates for the Charitable Trusts Unit, including specific statutes dealing with (a) conflicts-of-interest, (b) sales of nonprofit hospitals, and (c) community benefits, among others.(EN2)

The mission of the Charitable Trusts Unit is to protect the integrity of the charitable sector in the State of New Hampshire through effective registration, licensing, education, and enforcement, while supporting the charitable sector's growth and diversity. The Unit also serves as a central repository for the collection of information concerning charitable organizations, thereby allowing the general public, potential donors and other citizens to access information and empowering them to make responsible decisions.

II. THE CHARITABLE SECTOR IN NEW HAMPSHIRE: SUSTAINED GROWTH AND RECENT TRANSACTIONS

Since the early 1990's, the number of charities registering with the Unit has increased substantially. In June 30, 2003, the total number of charitable trusts registered in New Hampshire was 5,163, the highest number of charitable trusts ever registered in this state. During fiscal year 2003, approximately 593 new charitable entities were registered; and during fiscal year 2002, approximately 383 new charitable entities were registered.

The Universe of New Hampshire Charitable Trusts

In 2001, the Charitable Trusts Unit attempted to determine the value of all the charitable entities registered in New Hampshire. Using federal tax data, the Unit estimated that the total aggregate value of registered charities native to New Hampshire was approximately $8.2 billion dollars for the fiscal year ending June 30, 2000. The value of the assets of religious organizations was excluded from this calculation, since churches, synagogues and mosques do not register with the Attorney General's Office. Taken as a whole, $8.2 billion is a remarkable testament to the charitable giving practices of New Hampshire citizens.(EN3)

In recent years, however, the value of charitable assets held by New Hampshire charitable entities has declined as the securities markets have suffered sustained losses (EN4). Of equal significance is the fact that contributions to charities from private donors has declined for the first time in a decade, dropping by 1.2% in 2002 - in contrast to the steady increase in charitable donations during the 1990's (EN5). New Hampshire charities are now caught in a difficult cycle. With fewer dollars to distribute, many have made both cuts in programs as well as staffs (EN6).

Recent Transactions. Since 1997, the Charitable Trusts Unit has dealt with a series of diverse nonprofit matters. These transactions include (a) the merger of two of New Hampshire's nonprofit hospitals (Lakes Region Hospital and Franklin Hospital); (b) the sale of the nonprofit Blue Cross Blue Shield Plan; (c) the conveying of the proceeds of the Blue Cross sale ($87,000,000) to a new foundation (the Endowment for Health); (d) the closing of a major nonprofit nursing home (the Gale Home) and the creation of a new foundation for destitute and elderly women in Manchester with the proceeds of that transaction ($9,000,000); (e) the implementation of the community benefits statute requiring nonprofit health care trusts to report what community benefits they provide to their communities in exchange for the tax exemptions they receive (RSA 7:32 etseq.), (f) cooperation with the Department of Health and Human Services and the Department of Insurance with respect to health care issues; and (g) cooperation with the Legislature on issues ranging from telemarketing fraud to gift annuities.

In 2003, the Charitable Trusts Unit assisted Governor Benson in the establishment of a new charity --- the Old Man of the Mountain Revitalization Fund, Inc. --- to raise funds to commemorate the...

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