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$1,554,244.00. Simultaneously with the foregoing contribution,
petitioner and the Laphams entered into a charitable gift annuity
agreement whereby petitioner agreed to pay the Laphams an annual
annuity of $116,568.32 over the joint lives of the donors,
payable in quarterly installments of $29,142.08. The obligation
is unsecured.
The Administrative Process
In a Form 1023, Application for Recognition of Exemption,
received by the Internal Revenue Service (IRS) in July of 1999,
petitioner sought recognition as a section 501(c)(3) tax-exempt
organization and as a section 509(a)(3) supporting organization.
Therein petitioner indicated that it would “support THE AMERICAN
ENDOWMENT FOUNDATION * * * and other qualified charitable
organizations by receiving and administering funds for the
benefit of THE AMERICAN ENDOWMENT FOUNDATION.” Petitioner
further explained that it would be “operated in connection with”
AEF and would “receive[] donations which would otherwise be the
subject of fundraising activities conducted by the supported
organization.”
The Form 1023 described petitioner’s sources of financial
support as “Donations from the Lapham family and its friends,
including individuals and businesses” and “Interest on
investments”. The statement of revenue and expenses included
with the application reflected gifts, grants, and contributions
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