Write-Offs: IRS Approves Settlement; Coaliton Forms Advisory Group on Nonprofit Tax Issues

By ELIZABETH SCHWINN

• The Internal Revenue Service has approved a $20.1-million settlement between the former trustees of Hawaii’s wealthiest charity and the Hawaii attorney general’s office, ending a three-year legal battle over the $6-billion charitable trust. At issue were charges that the former trustees received excessive compensation and mismanaged programs and funds for the Kamehameha Schools, a charity established by a Hawaiian princess in 1884 to provide schooling for native Hawaiian children. The agreement provides that Kamehameha Schools will receive about $15-million from the trust’s insurer, Federal Insurance Company, to cover a portion of investment losses incurred by the former trustees (The Chronicle, October 5). The state attorney general will receive $1.3-million to cover legal expenses, and the former trustees will get about $4-million to pay their legal bills. The state initially sought hundreds of millions of dollars in compensation, but later settled out of court.

• Independent Sector, a national coalition of charities and grant makers, has created an advisory group of 24 nonprofit officials to guide the organization in setting policy positions on tax issues. John E. Marshall III, chief executive officer of the Kresge Foundation, in Troy, Mich., and John R. Seffrin, chief executive officer of the American Cancer Society, in Atlanta, will co-chair the group.