Clancy kills foundation – IRS may revoke tax-free status

After seven years and $5 million, Tom Clancy is scuttling his Kyle Foundation without even a Web site to show for its efforts, the New York Times reported July 11.

The foundation was inspired by the author’s friendship with a 6-year old boy named Kyle Haydock, who died of sarcoma in 1991. Clancy planned an online health network that would allow parents of juvenile cancer patients search out the best doctors and allow doctors to share their research.

The charity is not going quietly. Clancy has accused the head of the foundation of mismanagement and improper expenditures. She denies the accusations and says Clancy killed off the project just as it was about to succeed.

In an unusual step, the Internal Revenue Service is considering revoking the organization’s tax-deductible status. Donors would have to pay back taxes on their gifts if they had reason to know the charity was not performing its mission.

In a letter to the foundation’s board, Clancy said the I.R.S. is “citing long delay in product rollout, limited charitable work to date, high foundation expenses for salaries, travel and fund-raising.”

Clancy fired foundation head Katherine Gorshow on Feb. 11, and had the locks on her office changed before she could return to it.

Gorshow is now suing the foundation in a state court in Denver for breach of contract. She says in court papers that she had made significant progress toward taking the health network online later this year. Indeed, software company Sybase had recently given the foundation a $1 million a year commitment and remains enthusiastic about the project.

Clancy has responded by accusing her of misusing foundation money for private purposes, which Gorshow denies.

About $700,000 in foundation money remains. Clancy plans to use it to endow a pediatric oncology research chair at the Johns Hopkins University School of Medicine, to be named after Kyle Haydock. He will continue to add to that sum until the endowment reaches $2 million over the next three years.

For full story, go to the New York Times.

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