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that covered the period from AICR’s inception through December
31, 1989.7 When W&H did its first mailings for AICR, Watson and
Hughey consulted an attorney. The attorney advised them that
they and AICR would have to be careful that section 501(c)(3)’s
prohibition against inurement was not violated, in light of
Watson’s and Hughey’s status as founding members of AICR. As a
result, W&H reduced its fees “drastically”, W&H relinquished all
ownership in AICR’s mailing lists, and other changes were made.
Table 5 summarizes certain features of W&H’s fundraising
contracts with AICR.
7 Petitioner does not object to respondent’s proposed
finding of fact to this effect. We note that the first of the
contracts that respondent listed in support of this finding was
executed on Jan. 20, 1983; this contract states that it “is
effective the 1st day of June 1982”; but AICR had been
incorporated in September 1981. Similarly, the last of the
contracts that respondent listed states that “The term of this
Agreement is two (2) years beginning Jan. 1, 1987”; thus, the
last contract appears to have expired 1 year before the date
specified in the agreed-to proposed finding. We have treated the
agreed-to proposed finding as, in effect, an additional
stipulation between the parties.
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