Center for Social Welfare under the American Constitutions 



                                 September 2008 Update – Online Edition


It has been a busy summer for the Center. Here we summarize:


(1) the addition of zoning expert Prof. William A. Fischel to the Advisory Committee;

(2) recent meetings with housing experts and organizations;

(3) the IRS request for further information regarding our ' 501(c)(3) application; and

(4) our proposal for a (virtual) meeting of the Center and its advisors.



            Zoning expert Prof. William A. Fischel joins Advisory Committee 


One of the Nation=s leading authorities on the economics of zoning and land use regulations has joined the Center=s Advisory Committee. He is William A. Fischel, Hale Professor in Arts and Sciences at Dartmouth College, where he has taught since 1973.


Bill has written numerous books on the subject, including The Homevoter Hypothesis (Harvard Univ. Press, 2001); Regulatory Takings (Harvard Univ. Press, 1995); and The Economics of Zoning Laws (John Hopkins Univ. Press, 1985). He also has written many articles on zoning and housing issues, such as An Economic History of Zoning and a Cure for Its Exclusionary Effects, 41 Urban Studies 317‑340 (February 2004). He currently teaches courses on Urban and Land Use, Law and Economics, and Economic Policy.


Bill is a member of the Board of Directors of the Lincoln Institute of Land Policy in Cambridge, MA. He served as a member (1987‑97) and Chair (1993‑97) of the Town of Hanover (NH) Zoning Board. He also has been an expert witness in affordable housing litigation. He holds a PhD from Princeton University (1973).


It so happens that Bill and Center President Tom Loftus were fraternity brothers at Amherst College (he was Class of >67; Tom was >68)! That personal background probably accounts for Bill=s willingness to lend his prestigious name to our little startup group. Thanks so much, Bill!



                             Meetings with housing experts and organizations 


David Rusk 


On June 2, nationally-recognized affordable housing expert David Rusk hosted Tom Loftus at Mr. Rusk=s headquarters in Washington, D.C. He called the Center a AGodsend@ and discussed projects on which the Center might collaborate with affordable housing groups with which he works.


One example is in Isle of Wight County, VA, which has become an outer suburb of Norfolk. Skyrocketing housing costs there have made housing unaffordable to many of those who work in the county, including thousands of Smithfield Foods employees. The Smithfield Town Council wants to pass an inclusionary zoning ordinance, but its town manager has maintained they lack legal authority to do so. The Center may get involved in demonstrating the authority and duty of jurisdictions such as Smithfield to provide sufficient opportunities for affordable housing.  

 Washington Lawyers’ Committee for Civil Rights and Urban Affairs 


On July 15, Tom met with several managers associated with the Washington Lawyers= Committee for Civil Rights and Urban Affairs B Executive Director Roderick Boggs, Fair Housing Project Director  Isabelle Thabault, and the Chief Operating Officer of its affiliated Equal Rights Center, Donald Kahl, Esq. Those organizations do Fair Housing litigation, which promotes equal housing opportunity for minority groups. It was an enormously informative meeting.


Mr. Kahl, whose organization acts as a representative plaintiff in some of the Lawyers= Committee=s Fair Housing litigation, shared many insights about identifying bona fide plaintiffs in housing litigation. (Potential plaintiffs in affordable housing litigation include not only disadvantaged people, but also developers of affordable housing whose efforts have encountered unjustified government interference.)


Ms. Thabault provided insights into the vagaries of housing litigation and, like Mr. Kahl, expressed complete support for the Center=s work. She noted that the Center=s affordable housing mission is largely distinguishable from the Fair Housing mission of her Washington office. (The Center focuses primarily on the adequacy of affordable housing opportunities for all; the Washington Lawyers= Committee focuses on the equality of housing opportunities for minority groups. Of course, the Center will insist on Fair Housing compliance too.) Both Ms. Thabault and Mr. Kahl encouraged us to check back when we have further questions.


Mr. Boggs B the dean of Washington area Fair Housing advocates B was at the meeting only briefly, but he previously had discussed with Tom numerous practical aspects of Fair Housing litigation. Mr. Boggs emphasized that identifying good cases, and bona fide plaintiffs, is expensive and time-consuming, and that maximum use should be made of pro bono resources. He noted that his office has a tremendous network of area law firms that can mobilize pro bono attorneys. That network might be made available to the Center in appropriate circumstances. He mentioned that attorneys’ fees awards B which are generally available to successful plaintiffs in Fair Housing litigation B are insufficient to carry a nonprofit even in that type of litigation.



 Contacts with other organizations



The Center sent to numerous other housing and poverty law and policy organizations in the Washington area the same materials (Business Plan and legal memorandum on exclusionary housing policies), and the same request for a response, that it sent to Mr. Rusk and the Washington Lawyers= Committee. We will continue to contact established housing and poverty law nonprofits that operate in the Washington area, in hopes of finding common ground for collaboration. We also will continue to consult with those people who already have offered advice, so that we may learn as much as possible about B and perhaps coordinate on B tax, financial, personnel, and other nonprofit organizational issues, as well as affordable housing issues.



            IRS Response to 501(c)(3) Application, and Center=s Reply to IRS 



On June 26, the IRS responded to the Center=s application of March 12 (which was discussed in the Center=s May 2008 Update to you). The IRS letter (copy attached) requested further information B as is common with such applications.


Mainly, the IRS wanted to know whether the Center would agree to follow its guidelines for public interest law firms B Revenue Procedure 92‑59 (copy attached to IRS letter). Specifically, IRS wanted to know whether the Center would modify its board of directors, to: (1) place control in the hands of unrelated individuals selected from the community it will serve; and (2) eliminate potential control by the person who litigate on behalf of the Center (Tom Loftus).


The perceived risk apparently is that litigators in control of a nonprofit might pursue litigation that benefits their private interests rather than the public interest. (We have found no report of such abuse by a public interest law firm.) There was potential control by the litigator in the Center’s original Board of Directors (defined as 50% control or greater), because that three-person Board included both Tom and his wife Phyllis (Secretary/ Treasurer), as well as Col. John Rector (unrelated).


Phyllis had agreed to join the initial Board because of the difficulty of finding initial Board members for the fledgling Center, and because of the Center=s important mission. She is an accomplished accountant with and many years of experience with nonprofit Board management. She was asked to join the Board based on advice contained in the leading legal guide, by Bruce R. Hopkins, Starting and Managing a Nonprofit Organization pp. 21‑22 (4th ed. 2005). That advice is that having spouses serve together on the initial Board of a small, startup nonprofit is appropriate and may be necessary.


The Center=s widely-dispersed Board members analyzed and discussed the issues by e-mail and phone, as possible, during July. By early August, the Board decided that the Center should try to satisfy the IRS guidelines fully, even though those guidelines are not per se requirements, and even though they do not seem to fit well in some respects with the realities of small, startup nonprofits.


 Michael J. Clark succeeds Phyllis Loftus on Board 


Phyllis Loftus offered to resign from the Board, in order to satisfy the IRS guidelines. The Board identified a candidate ready, willing, and able to replace her. He is Michael J. Clark, Esq., who has been on the Advisory Committee. Mike has done a great deal of important legal research for the Center as a volunteer. Examples are: (1) his electronic cite checks of the voluminous judicial decisions relied on in the Center=s legal memoranda, and (2) his wide-ranging research on provisions allowing awards of attorneys’ fees to parties similar to the Center=s prospective clients, at the state and federal levels. His qualifications to be a Board member include his long record of public service as an attorney with several federal agencies; his experience in the management of a nonprofit organization (as legal advisor to a Native American charitable organization (Circle of the People, in Evansville, IN)); and his willingness and ability to devote substantial time to overseeing the Center=s operations. He also is local (he lives in Rockville, MD).


At the Board=s special meeting on August 27, it accepted Phyllis= letter of resignation (copy attached) with deep regret, and with great appreciation for the many contributions she has made to the Board and the Center. She will continue to serve as an officer B Secretary of the Center B and contribute in other ways.


The Board then elected Mike to be its new member, in accordance with the Bylaws (copy attached), Art. III.12. (See Minutes of Special Meeting of Board of Directors, August 27, 2008 (copy attached).) Thanks be to Mike for agreeing to join our Board, and for his many other contributions! May he be only the first of many Advisory Committee members to join the Board!



 Center’s reply to IRS 



The Center replied to IRS on all its requests, by letter of September 3 (copy attached). Included were copies of the June 26 IRS letter, Phyllis Loftus’ letter of resignation from the Board, the Minutes of the August 27 Special Board Meeting, the Center’s Bylaws, and its “Duties of Directors” document (copies attached).


IRS received that letter and attachments on September 8. Pending the IRS Advance Ruling on its 501(c)(3) application, the Center may have to defer projects such as fundraising, hiring, and formal operations. However, we anticipate a favorable ruling soon. In the meantime, we will continue on the myriad of other important projects -- such as contacts with existing nonprofits, fundraising planning, website development, financial and personnel management procedures, and ongoing research on substantive and procedural aspects of affordable housing development and litigation.



                                  Your input is invited B let=s (virtually) meet! 



The Center wants all its advisors to have the opportunity to be fully informed on its activities, to discuss and make recommendations on all subjects. That’s why you are being inundated with documents related to the IRS application and Board activities. Some of those documents were discussed above and some weren=t. The latter consist of:


$       Attachment to Form 1023 application to IRS for recognition as charitable organization under IRC Sec. 501(c)(3) (contains details on all sensitive topics regarding charitable status) (the Center=s actual Form 1023 will be mailed out upon request B a scanned version in Word format would total over 15 megabytes);

$       Minutes of Organizational Meeting of June 25, 2008 (explains how initial Board of Directors was formally appointed, how draft Bylaws were revised and adopted; etc.);

$       CSWAC, Exclusionary Housing Policies: Problems and Legal Remedies (Washington Metropolitan Area edition (April 2008)) (current version of Center=s extended legal memo, which was sent to area housing and poverty law groups in April and May).


We would like to hold an initial teleconference with the Advisory Committee and our informal advisors as soon as possible, to give all of you the opportunity to discuss our efforts to date and help plan our future activities. We will contact all of you again when we are ready to set one up.




Thank you very much for your continued interest in the Center!