Charity Governance

CORPORATE AMERICA SHOULD PARTICIPATE IN PHILANTHROPIC VENTURES, BUT NOT TOO MUCH: CHARITY GOVERNANCE CASTS ITS VOTE IN THE AMEX MEMBERS PROJECT CONTEST

DATELINE: July 30, 2007, Chicago

You have undoubtedly seen the ad.  Famed auteur Martin Scorsese is directing a commercial starring a bunch of celebrities, including Andre Agassi, Sheryl Crow, Ellen DeGeneres, Alicia Keys, and Shaun White.  And then Tim from the office next store walks onto the set.  He is more interested in keeping Lake Winabizacki clean than in he is in African relief, the environment, children at risk, and medicines for those in need.  It's his thing

Scorsese then makes a rare onscreen appearance, asking “Who’s that guy?”  Tim is a good looking character, perfect for this ad.  Consequently, Scorsese decides to keep Tim in the ad.  According to Scorsese, “He’s got a good face,” but when Tim smiles a little too self-satisfied, Scorsese cautions him,...

THE PHILADELPHIA INQUIRER’S FAULTY PREMISE: NONPROFIT LEADERS DON’T DESERVE TO BE HIGHLY COMPENSATED

DATELINE: July 30, 2007, Chicago

Although we don’t know what reporter Andrew Maykuth was told by his assignment editor at the Philadelphia Inquirer, we would be willing to bet that a story on excessive compensation at nonprofits was the order of the day.  Yesterday an article appeared on the front page of the Inquirer (at least the Web version) entitled Nonprofit Is Lucrative for Founder.

The story focuses on Matt A. Peskin, the founder of the National Association of Town Watch.  It was Peskin who came up with the idea for National Night Out some twenty-three years ago.  It has grown, according to Maykuth, into a series of block parties staged in some...

SIEGEL'S SECOND SET OF COMMENTS ON THE PROPOSED REVISIONS TO THE FORM 990

DATELINE: July 29, 2007, Chicago

Jack Siegel of Charity Governance Consulting has submitted to the IRS a second set of comments regarding the IRS's major overhaul of the Form 990.  This time, Siegel focuses on the proposed revisions to the instructions, as well as a number of other issues.  He believes the IRS must eliminate clutter and repetition from the instructions, and that the IRS must develop a well-defined taxonomy that permits users to quickly locate specific information. However, Siegel still believes the IRS has done an excellent job in improving the Form 990.

Click here for a copy of Siegel's July 29, 2007 comment letter

Click here for a copy of Siegel's June 17, 2007 comment letter.

HABITAT FOR HUMANITY: TOO MANY AFFILIATES WITH REASONS TO OPPOSE MORE NATIONAL CONTROL?

DATELINE: July 18, 2007, Chicago

New York Times reporter Stephanie Strom set the pick for us today in her article “Some Worry Home Charity is Shedding Grass Roots: Affiliates Wary of Centralization.”  Strom begins her article by noting that there are some 1,600 Habitat for Humanity affiliates around the country.  She then continues that the national organization is trying to tighten control over the affiliates. 

According to Strom, the move toward centralization has lead to defections at the local level.  Some staff are leaving their local Habitat for Humanity organizations while some organizations are considering leaving...

BEST PRACTICES SHOULD NOT BE MANDATORY PRACTICES: HEAD START LEGISLATION PROVIDES ANOTHER CASE IN POINT

DATELINE: July 18, 2007, Chicago

To be blunt, legislators, regulators, and government grant makers should get out of the corporate governance business.  The recent foray by the IRS into best practices for 501(c)(3) entities is a case in point.  IRS officials want tax-exempt entities to adopt conflicts-of-interest policies and appear to be trying to get to that result through a proposed question to the Form 990 that asks whether the organization has a conflicts-of-interest policy.  The ostensibly correct answer is “Yes,” which will cause many organizations to adopt one before filing the return.  Therein lies the problem.  Many commentators would prefer to see an organization with a thoughtful approach to conflicts rather than an organization with a piece of paper and lots of conflicts.

Congress may be headed down the same path.  Many in Congress have long distrusted those organizations that run Head Start programs.  Consequently, it comes as no surprise that Head Start reauthorization bill  (HR 1429) currently pending in Congress imposes...

BEWARE ALL NONPROFIT MEETING PLANNERS: SUMMER MEETINGS AND AIR TRAVEL

DATELINE: July 13, 2007, Chicago

This will not be a typical blog entry for this blog, but an observation.  I just returned from four days of travel, which saw me flying to New York, St. Louis, Dallas, Sacramento, and Seattle.  There was also an unscheduled stop in Indianapolis.  We ran short of fuel.

As is true of all travelers, I have my list of horror stories from this trip.  The three hour wait on the tarmac at New York’s LaGuardia Airport, the screaming babies in stereo (memo to self: buy noise cancelling headphones), the missed night flight to Sacramento, which led to a choice between an airport cot or a flea bag hotel (with mattresses that sagged to the floor), too many ham sandwiches, fidgety kids, etc, etc.  Oh, and let’s not forget the long lines at security.  With one exception, every flight was sold out.  It is not just the travelers.  Talk to the flight attendants. They are ripping their hair out.

Probably the saddest story...

CASE 64, CATEGORY 1 ABUSE: GOVERNOR SCHWARZENEGGER USES CHARITABLE DOLLARS TO FINANCE OVERSEAS TRAVEL, ACCORDING TO THE L.A. TIMES

DATELINE, July 5, 2007, Chicago

Paul Pringle of the LA Times sure made our day with his article entitled Nonprofit Subsidizes Schwarzenegger Travel Frills, appearing in today's edition of the paper.  The nonprofit in question is the California State Protocol Foundation, a Section 501(c)(3) organization, according to the latest Form 990 (2005) available through GuideStar.  Statement 3 to the Form 990 indicates that the Foundation’s purpose is to:

Lessen the burden of government by relieving the State of California of its obligations to fund and facilitate official state and international protocol events.

In 2005, the Foundation spent $1,051,404 of its $1,768,642 total expenditures on...

TIGER WOODS, THE PHILANTHROPIST: A DOUBLE BOGEY OR AN EAGLE?

PROPOSED FORM 990 INSTRUCTIONS

Expenses of staging fundraising events should be characterized as fundraising expenses for purposes of Line 11b of Part IV to the Core Form, unless the Section 501(c)(3) organization’s namesake has won at least 12 majors, in which case, such expenses can be classified as program expenses.

DATELINE, July 5, 2007, Chicago

The Washington Post is certainly in the hunt for the Pulitzer Prize this year.  Last week, it ran a four-part series on Vice-President Dick Cheney.  This week it has moved onto Tiger Woods and his philanthropic activities.  The article was sparked by the AT&T National golf tournament, which starts today at the Congressional Country Club. 

According to Post reporter Joe Stephens, the event is hosted by Tiger Woods Charity Event Corp.  Raising Millions for Charity, and Even More for Golfers, July 5, 2007.  For its fiscal year ending September 30, 2005, this 501(c)(3) entity had...

MONETIZING GOOD GOVERNANCE: LOOKING FOR A RETURN ON A CONFLICTS-OF-INTEREST POLICY

DATELINE: July 3, 2007, Chicago

This summer already has proved to be an interesting one for the better governance crowd.  The IRS has issued its proposed revisions to the Form 990, hoping to greatly improve transparency.  Last week, Francie Ostrower of the Urban Institute released a massive study focused on nonprofit governance practices. 

Yesterday, Phred Dvorak of the Wall Street Journal chimed in, with a story entitled Finding the Best Measure of “Corporate Citizenship” in her column, Theory & Practice.  This being the Wall Street Journal, the focus, not surprisingly, was on whether good governance improves the bottom line.  In other words, what are the profit margins on a conflicts-of-interest policy?  Well, the nonprofit sector took its cue from the for-profit Sarbanes-Oxley Act, so why shouldn’t...