Charity Governance

CALIFORNIA ATTORNEY GENERAL ON THE ATTACK

DATELINE: September 14, 2009, Chicago

The California Attorney General has brought suit against individuals associated with the L.B. Research and Education Foundation (Foundation).  Raja Abdulrahim, UCLA Surgeon Sued for Benefiting From His Own Charity, L.A. Times (Sept. 10, 2009).  Given the allegations in the AG's complaint and the newspaper coverage, we are willing to bet that the IRS will join the fray, if it hasn't already.

The suit names Dr. Gerald D. Buckberg,five others who are or were Foundation officers or directors, and 50 unnamed individuals.  At the heart of the suit are allegations over self-dealing, but the AG has thrown just about everything imaginable at the defendants.  If the facts are anywhere close to the alleged ones, we’d recommend that the defendants...

THERE IS NO FREE LUNCH: ART INSTITUTE PROPOSAL FOR FREE ADMISSION IS A MISTAKE

DATELINE: May 27, 2009, Chicago

Sandra Guy of the Chicago Sun-Times is reporting today that the Art Institute of Chicago is considering the elimination of its admission fee.  In Free, No Fee at the Art Institute?

We had the good fortune to visit the Art Institute’s new modern wing on opening day.  Admission was free, as it was for the next six days.  Admission to the second largest art museum in the country then was to return to $18 ($16 for city residents).  That number had been reduced from $20 following vocal objections to a raise in admission fees that was tied to the opening of the new wing.  

Now Art Institute Director James Cuno is proposing that admission be eliminated, restoring the pre-2006 status quo.  The Sun-Times reports that the board has been playing with the idea for the last six to eight months.  The plan would be for the Art Institute to raise $250 million in permanent endowment.  The income from the fund would then be used to fund free admission.

We are sure that many populists will applaud the proposal, but adoption of this proposal would be... 

THE DEVIL IS IN THE DETAILS: ANGEL FOOD MINISTRIES

DATELINE:  March 10, 2009, Chicago

We had seen some earlier references to Angel Food Ministries and an FBI raid, but for some reason the story didn’t resonate with us.  Yesterday, we noticed that the Chronicle of Philanthropy’s Elsewhere Online column referenced a settlement of a lawsuit brought by two directors against the nonprofit.  We have not seen the pleadings, but the directors apparently alleged that the Wingo family was...

TIME FOR SENATOR GRASSLEY TO SEND FORMER SENATOR TOM DASCHLE PACKING

DATELINE: February 2, 2009, Chicago

We’ve been following former Senate Majority Leader Senator Daschle’s tax problems closely.  We don’t want to be too pious, but we are sick and tired of the lax compliance effort undertaken by our public official wannabes.  First there was Timothy Geitner and the employment taxes.  Now it is Daschle, who is President Obama's nominee to head up the Department of Health and Human Services.  Daschle failed to report $225,256 in income attributable to the use of a car and driver provided by a private-equity firm that Daschle apparently provided services to.  What has been less publicized is Daschle's failure to report $83,333 in consulting services income.  That one is...

“WANT TO PLAY WITH COMPETITION, SCARECROW?”—THE NONPROFIT WORLD KIDS ITSELF ABOUT THE NEW PHILANTHROPY

DATELINE: January 4, 2008, Chicago

Last November, Nicholas Negroponte told the Wall Street Journal, "I am not good at selling laptops. I'm good at selling ideas." Steve Stecklow and James Bandler, A Little Laptop With Big Ambitions (Nov. 24, 2007). Negroponte is the well-know MIT professor (apparently on leave) who is behind the ambitious One Laptop Per Child project, designed to provide a laptop to 150 million of the world's poorest schoolchildren within four years, according to the Journal. Problems with the project were already apparent when Stecklow and Banler penned their article last November. Today, Strecklow has a second article, which reports that the problems...

CHICAGO’S COURT THEATRE OVERDOES SOLICITATION FOR SUBSCRIPTIONS, BECOMING ABUSIVE AND COSTING ITSELF A SUBSCRIPTION

DATELINE: December 7, 2007, Chicago

I said, Hey! You! Get off of my cloud
Hey! You! Get off of my cloud
Hey! You! Get off of my cloud
Don't hang around 'cause two's a crowd
On my cloud

The Rolling Stones, Get Off My Cloud (1965)

We are quite chauvinistic when it comes to Chicago theatre. Our leading theatre companies consistently top anything that we see around the country. We have particularly come to enjoy Chicago's Court Theatre, which recently staged outstanding productions of August Wilson's Fences and Tom Stoppard's Arcadia. In fact, we had been thinking of adding the Court's season to our subscription list, despite our already busy theatre schedule—over 30 plays in 2007. But we won't be adding the Court to our subscription list this year after last night's call....

TULSA WORLD IS SILENT TODAY, BUT SENATOR GRASSLEY ISN'T: WHAT DO NONPROFIT HOSPITALS AND MINISTERS HAVE IN COMMON?

"Send us your money and we will make sure it is in heaven when you get there"

Attributed to Firesign Theatre--please advise if you know of a better attribution

DATELINE: November 6, 2007

As far as we can tell, Tulsa World is uncharacteristically silent today on the ongoing controversy surrounding Oral Roberts University and Richard Roberts. That's OK, everybody is entitled to a day off unless that everybody is Senator Grassley and his staff. They never rest. The Wall Street Journal's Suzanne Sataline is reporting today that Senator Grassley has sent...

NETWORK FOR GOOD V. UNITED WAY OF THE BAY AREA: A CASE THAT HOLDS MANY LESSONS FOR CHARITIES AND THEIR BOARDS

DATELINE: October 22, 2007, Chicago

Last Friday (Oct. 19, 2007), the Superior Court for the County of San Francisco issued its tentative findings of fact and conclusions of law in Network for Good v. United Way of the Bay Area. Coming in at 87 pages, the opinion is not only too long, but it is treacherous going, relying on highly technical interpretations of accounting entries and presentations. It would be easy to dismiss this opinion as involving a unique set of facts that are unlikely to repeat themselves. That would be...

THE SIXTIES COUNTERCULTURE MEETS MONEY: NOW WE HAVE A FOURTH SECTOR

Dateline: May 8, 2007, Chicago

Stephanie Strom of the New York Times is well known as the beat reporter for nonprofits and charities, so imagine our surprise when we picked up last Sunday's Times and saw her byline in the business section. Make Money, Save the World: Businesses and Nonprofits are Spawning Corporate Hybrids, May 6, 2007. Hmm, a pinstripe suit and sandals. That picture, appearing above the article, immediately told us that Strom had not strayed far from her usual beat, although at first we thought we were reading the fashion section. She was focused on the latest rage to hit the nonprofit sector,...

THEATRE GROUPS TAKE PAYMENTS FROM PRODUCERS: POSSIBLY JEOPARDIZING MISSION AND RAISING TAX ISSUES

Dateline, March 20, 2007, Chicago

Campbell Robertson begins his N.Y. Times Sunday Business Section article by proclaiming “Everyone is doing it these days.”  Nonprofit Show, But Money’s Riding On It, Mar.18, 2007.  The everyone is nonprofit theatre groups.  What they are doing is entering into “enhancement deals.”  Under these arrangements, the nonprofit accepts a payment from a commercial producer.  The payment buys the commercial producer what Robertson describes as a “research and development” lab.  If the show becomes a hit off-Broadway or in another city, the producer then has the right to transfer the play to Broadway, with the nonprofit theatre group participating in the big payoff through royalties.  Enhancement payments to the nonprofits can reach...