Read Chapter 7 (pg 285-346) and answer problem question in 2-3 paragraphs PROBLE

Read Chapter 7 (pg 285-346) and answer problem question in 2-3 paragraphs
PROBLEM
Assume that your client, Buarno Michelangelo, has a burning passion for
Renaissance art and wants to ensure that his $20 million is used to support
Renaissance art for at least another 1,000 years. He can donate the money directly to
Renaissance Art Museum, with instructions that the fund be used in perpetuity, or he
can set up a private foundation, a donor-advised fund, or an SO. If he sets up an SO,
he will also need to determine which type best fits his interests. Depending on his
priorities, he will undoubtedly make different choices. If he wants to support Medieval
Art Museum perpetually, for example, his decision will be different than if he wants
flexibility to support other museums at a later point. He will also consider how much
control he wants over future distributions. If the desire for control is high, he may
want to start a private foundation, but he must balance that interest against the
possibility of receiving a smaller tax deduction, the additional rules of a private
foundation, and the extra costs of running the organization and following the rules.
Consider the following situations that might apply to Michelangelo and determine
how each of them would affect his decision. Michelangelo wants to work full time on this endeavor. He is independently wealthy and does not need to be paid for his work, but it would be nice to get paid. Michelangelo realizes that the best Renaissance art is located abroad, and he may want to see some of his money at work abroad. Michelangelo knows that he is a terrible investment manager. He does not want to worry about managing the funds himself, and he does not want to supervise directly the investment manager. Michelangelo plans to contribute his share (50%) of a closely held corporation. Michelangelo plans to contribute $20 million worth of Renaissance art and no cash.
NOTES AND QUESTIONS
As mentioned above, the Robertson Foundation was a Type I SO for which Princeton
University appointed a majority of the board of directors. One of the plaintiffs’
allegations in the lawsuit concerning whether Princeton had followed the donor’s
intent was that the board members appointed by Princeton had an inherent conflict
of interest and were not devoted to the Robertson Foundation. In essence, they were
identifying a structural conflict of interest in Type I SOs. Do you agree that that
conflict exists? If so, how can it be resolved? Another issue in that lawsuit was that
the Robertsons paid their litigation expenses from a §501(c)(3) private nonoperating
foundation. One of the purposes of that foundation was to support the Robertson
Foundation. Is paying litigation expenses a method of pursuing this charitable
purpose, or does it amount to self-dealing, as some have suggested?