Charity Governance

ARROGANCE, NOT A MISUNDERSTANDING—NO HALO IN HAITI

Dateline: February 4, 2010, Chicago

We have been watching the story about the imprisoned Baptist missionaries who were detained for allegedly trying to remove 33 Haitian children from Haiti.  The ten missionaries were charged today by Haitian authorities with abduction and criminal association.  Mark Lacey, Abduction Charges for Americans in Haiti, N.Y. Times (February 4, 2010).  While we suspect these missionaries will be returned to the United States shortly, we have no sympathy for their plight. 

These folks apparently assumed that their efforts to do good would not only shield them from legal liability, but serve as justification for ignoring the laws of another country and the rights of Haitian parents who might still be alive.  In their view, the opportunity to live in the United States apparently justifies any action needed to achieve that result.

The lesson in this story should be obvious and applies to matters that extend far beyond disaster relief, children, and adoption:...

THOUGHTS ON HAITIAN DISASTER RELIEF: AMONG OTHER THINGS, DON'T START A CHARITY

SPECIAL BULLETIN: January 14, 2009, Chicago

Technology is a great thing and using text messaging to send $10 to aid the people of Haiti may seem pretty cool, but you might want to consider more traditional routes, like donating through web sites or sending checks to reputable disaster relief organizations.  We heard today that the money transferred through text messages may take up to 90 days to reach Haiti.  While the victims will still need aid in 90 days, if you want to provide immediate funds, text messaging may not be the best approach.  [Follow-up--We just watched an interview with one of the people behind a company that orchestrates the text messaging program.  He acknowledged the time frame is 90 days for contributions to "normal" contributions to charities, but he is hoping to reduce that time in the case of contributions for Haitian disaster relief.  He was candid in acknowledging that there would be a delay in any event.]

For those of you who want to start a charity to aid the victims, please don't.  Instead, donate the money you will spend starting what will in most cases become a failed venture to a reputable disaster relief organization.  To be blunt, its not about you.  Unless you have a special skill set, the people of Haiti need your money more than they need your ego.

Finally, we suspect everyone is sick and tired of natural disasters that kill tens of thousands of people due to poorly designed buildings and sub par construction.  We were therefore intrigued by an article in yesterday's New York Times that reported on a number of nonprofits that focus on building design and construction in developing nations.  Henry Fountain, Flawed Building Likely a Big Element (January 13, 2010).  Mentioned were Architecture for Humanity and Appropriate Infrastructure Development Group.  Before we would consider a contribution to either organization, we would want to know a lot more about them, including whether contributions qualify as tax-deductible contributions.  But as a long-term response to disasters, these (and we assume other similar) organizations may warrant support.  For the time being, our money will be going to an organization that will provide more immediate disaster relief.

GOOD FOR THE ACLU: REPORT ON CHILLING EFFECT OF OFAC

DATELINE: June 16, 2009, Chicago

Mainstream charities have been upset since President George Bush (43) first began his efforts to identify and shut down charities that finance terrorist activities.  Everyone acknowledges that some charities have been used as fronts to finance terrorism.  Nobody disputes the need to shut those charities down.

What has troubled many U.S. charitable organizations that make foreign grants, provide disaster relief, and provide aid to third world nations has been the...

IOWANS SHOULD GET OFF THE AMERICAN RED CROSS' CASE

DATELINE: June 5, 2008, Chicago

People should get off the American Red Cross' case. According to Stephanie Strom of the New York Times, the Red Cross has been busy raising funds to assist victims of tornados that struck northeastern Iowa last month. Red Cross in New Dispute Over Disaster Relief Funds. Isn't that what we expect of the American Red Cross?

In recent years, the media has portrayed the Red Cross as a disorganized and ineffective bureaucracy. Red Cross officials must...

WHAT ARE THE INTERNATIONAL RELIEF ORGANIZATIONS DOING ABOUT MYANMAR AND WHAT ARE YOU DOING ABOUT IT?

DATELINE: May 7, 2008, Chicago

We suspect that the established disaster relief organizations are not receiving an outpouring of donations following Cyclone Nargis' direct hit on Myanmar. Many people don't know where Myanmar is, and those that do, are likely to be put off by the military government, particularly following the crackdown several months ago on Buddhist monks. Nevertheless, there probably are more than a few people who still want to do something. After all, those who...

COLLEGE GRADS LEARN THAT WALL STREET IS ANYTHING BUT CHARITABLE EVEN THOUGH IT USES THE COVER OF CHARITY TO SOFTEN THE BLOW

DATELINE: April 4, 2008, Chicago

"Let's see, I am a top-of-the class Harvard, Yale, University of Chicago, NYU, Stanford, or Northwestern University MBA. Should I go to Goldman, Lehman Brothers, J.P. Morgan, or Bear Stearns?" Such hard choices students faced last year, particularly with those lucrative $40,000 and $50,000 signing bonuses.

Some chose Door No. 3, Bear Stearns. As Monty Hall used to say when the lovely...

AN ALTERNATIVE HYPOTHESIS ABOUT THE AMERICAN RED CROSS’ $200 MILLION DEFICIT

DATELINE: January 16, 2008, Chicago

The American Red Cross just can't seem to catch a break. The opening paragraph of today's article by New York Times reporter Stephanie Strom reports that the American Red Cross is facing a $200 million operating deficit. Short on Fund-Raising, Red Cross Will Cut Jobs. This could lead to the layoff of up to 1,000 employees in the national office, according to Strom, which amounts to a one-third reduction in headquarters staff. There is also talk of reducing regional management. This will be a surprise to staff, but it should not be that much of a surprise. Prior to his forced departure last November, former-Red Cross president and CEO Mark Everson had apparently talked of a 20% reduction in staff.

One thing is for sure: Those who have argued...

DOING GOOD DOES NOT JUSTIFY AD HOC TAX BREAKS: LESSONS FROM VIRGINIA TECH, HURRICANE KATRINA, TSUNAMIS, AND OTHER TRAGEDIES

Dateline, April 26, 2007, Chicago

After every major tragedy there is an apparent desire on the part of complete strangers to provide some aid to the victims. The more intense the media coverage, the more intense the desire to provide aid. Often politicians encourage the outpouring, as Stephanie Strom of the New York Times reported this past weekend in Katrina Tax Break Spurs $11 Billion in Donations, April 21, 2007. You may recall that following Hurricane Katrina, Congress enacted legislation that lifted the 50% limit on charitable contributions of cash made to most charities during 2005. One Treasury official put the cost of that provision at $3 billion, according to Strom. Congress had originally estimated the cost at $819 million.  As we reported earlier, one of the legislation's prime beneficiaries was Vice-President...

A WORTHY CAUSE DOES NOT JUSTIFY STUPID LEGISLATION: FALLEN FIREFIGHTERS ASSISTANCE TAX CLARIFICATION ACT OF 2006

Dateline:  January 2, 2007, Chicago

Many will recall the tragic events of October 26, 2006, when five firefighters were killed by a sudden burst of flames from a brush fire that had been set by an arsonist. The event received widespread coverage around the nation.  It is therefore not surprising that someone decided to set up a fund for the firefighters’ survivors.  It is also not surprising that funds poured in, eventually exceeding $1 million.  The fund was handled by the United Way of Central County, California.  According to an article in the L.A. Times, at the half million mark, United Way official Bob Duistermars decided to place what the Times characterizes as a “cautionary call” to the IRS.  Maeve Reston, Donations to Firefighters’ Survivors Put at Risk, L.A. Times, Dec. 8, 2006.  And guess what?

The IRS told Duistermars that the United Ways’ actions could cost the United Way...

SIX HURRICANE SEASONS WILL COME AND GO BEFORE THE AMERICAN RED CROSS IS READY TO GOVERN ITSELF: UNACCEPTABLE

Yesterday was the big day.  The American Red Cross began the rollout of its new governance structure, with a more formal plan to arrive this Thursday.  You know there is a problem when...