March 7, 2007 | Read Time: 1 minute
Paul Botts, author of the blog Dot-org, weighs in on an investigation by Illinois Attorney General Lisa Madigan into whether the Robert R. McCormick Tribune Foundation is being properly managed.
At issue: whether the foundation’s large concentration of stock in the Tribune Company is appropriate, says Crain’s Chicago Business,.
According to Crain’s: “Heavily exposed to Tribune stock that has fallen 43 percent since February 2004, the McCormick Tribune Foundation suffered a nearly 50 percent decline in assets, to $1.12-billion, during the two years ended in 2005. During the same period, the Standard & Poor’s 500 Stock Index rose 13 percent.”
Mr. Botts, in his blog, says Ms. Madigan’s interest is significant, especially in light of the Tribune’s recent struggles and the company’s possible sale.
“Being a tax-exempt organization in the U.S. is a legal and social contract, not a blank check or inalienable right,” he writes. “Given the facts here, that does not look good for the foundation.”
Mr. Botts continues: “The foundation remains basically a captive creation of the company, and that is one of the once-common practices that inspired the wholesale rewrite of federal charitable-foundation law in 1969. It also certainly violates the spirit, at least, of Illinois’ not-for-profit incorporation statute.”
