Charity Governance

“WE DON’T GRILL PEOPLE:” MAYBE YOU SHOULD START

DATELINE: August 14, 2008, Chicago

Memories of St. Mary's College came rushing back this morning when we read in the Chronicle of Philanthropy's Elsewhere Online column about Westminster College's recent disappointment over what now appears to be a worthless $3.4 million pledge from am ostensible entrepreneur. According to Brian Maffly of the Salt Lake Tribune, Warren Kyle Foote, a 28-year old real estate developer, made the pledge to finance the Warren Kyle Foote Institute for New Enterprise. Once Hailed by College as Philanthropist-Entrepreneur Foote Spun Web of Deceit, August 12, 2008. According to Maffly, within a few months of his pledge, Foote...

SHOULD I STAY, OR SHOULD I GO? NO RESPECT FOR DIRECTORS OR DONORS AT ACORN

Should I stay or should I go now?
If I go there will be trouble
And if I stay it will be double
       The Clash, Should I Stay or Should I Go

DATELINE: June 10, 2008, Chicago

Maude Hurd, the president of ACORN, a nonprofit group, certainly has a warped sense of what is right and what is wrong when she calls ACORN's response to an alleged near-million-dollar embezzlement a judgment call. According to Stephanie Strom's recent reporting in the New York Times last week, the brother of the organization's founder is alleged to have embezzled $948,607.50 from the organization. Funds Misappropriated at 2 Nonprofit Groups, June 9, 2008.  The alleged embezzler, Dale Rathke, apparently also was an Acorn employee. We would like to put that number in perspective by comparing it to ACORN's gross revenue, but we are unable to...

IS BARACK OBAMA ILLEGALLY COMPETING WITH LAS VEGAS?

Come around you rovin' gamblers and a story I will tell
About the greatest gambler, you all should know him well…
He gambled in the White House and in the railroad yards,
Wherever there was people, there was Willie and his cards
       Bob Dylan, Rambling, Gambling Willie, from The Bootleg Series Vol. 1-3

DATELINE: July 8, 2008, Chicago

Randy Furst of the Minneapolis StarTribune is reporting today that the Minnesota Gambling Control Board will ask the Department of Safety to investigate whether Senator Barack Obama's political campaign is sponsoring an illegal lottery in the State of Minnesota. State is Asked to Clarify Web Solicitation, July 8, 2008. According to Furst, the Obama campaign Web site indicates that individuals who contribute at least $5 will have their names entered into a drawing. Ten winners will be given the opportunity to meet Obama backstage at the Democratic National Convention in Denver. It appears that airfare is included. Well as much as we like Obama, it sure sounds like a...

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...

SINCE WHEN DID HARVARD UNIVERSITY BECOME THE UNITED WAY?

DATELINE: June 4, 2008, 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
     Rolling Stones, Get Off My Cloud from December’s Children

Jennifer Juniper, hair of golden flax
Jennifer Juniper longs for what she lacks
       Donovan, Jennifer Juniper

Thank goodness we didn't go to Harvard in the 1970s. Oh yes, we’d be rich today, but we also would be so tied to our alma mater that we couldn’t imagine giving our money to any of the 984,000 other charities registered with the IRS. Sounds absurd, but that is in essence what the members of...

RIVERSPLASH HOLDS LARGER LESSONS ON TAX-EXEMPT STATUS FOR ALL CHARITIES

DATELINE: June 3, 2008, Chicago

Yesterday we used the chaos that occurred this past weekend in Milwaukee at its annual RiverSplash Festival as an opportunity to discuss some of the precautions that all nonprofits that run outdoor fundraising festivals should consider taking. The events of last Saturday night hold larger lessons for any charity that partners with a for-profit entity.

When we wrote about RiverSplash yesterday, we did report the basic facts, but tried to downplay the chaos and violence so that our larger points would not be obscured. The facts are now clearer. Milwaukee Mayor Tom Barrett referred to the event as a...

SUMMER OUTDOOR FUNDRAISING: MILWAUKEE'S WEEKEND EXPERIENCE OFFERS A WARNING FOR FESTIVAL ORGANIZERS

DATELINE: June 2, 2008, Chicago

"Summertime, and the living is easy." Lots of tax-exempt organizations take advantage of that old adage by sponsoring outdoor events as fundraisers. These events are a great opportunity to provide everybody in the community with wholesome entertainment and diversions while also raising funds for the organization's programs. But whenever an organization is dealing with a crowd, particularly if part of the fundraising involves beer sales, some precautions are necessary.

We can't say what went wrong this past Saturday night at Milwaukee's RiverSplash festival, but something surely did according to a report by Tom Kertscher and Mary Zahn appearing in today's Milwaukee Journal-Sentinel. Shooting at RiverSplash Raises Concerns. Video from the newspaper's affiliate TMJ4 shows a...

IT MUST BE NICE TO BE A SMITHSONSIAN REGENT

DATELINE: May 20, 2008, Chicago

This past weekend, the Government Accountability Office (GAO) reported on the ongoing efforts by the Board of Regents of the Smithsonian Institution to implement a number of governance reforms. The report is generally favorable, but we are nevertheless left with the impression...

FASB SHOULD WAKE UP AND SMELL THE COFFEE: MASSACHUSETTS TAX ON ENDOWMENTS

DATELINE: May 12, 2008, Chicago

As regular readers know, we are dissatisfied with proposed FSP 117-a, a rather obscure proposal being considered by the Financial Accounting Standards Board (FASB). It would extend current accounting principles to the financial statements of charities operating in states that have adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA). UPMIFA is spreading like wildfire, with at least 20 states enacting versions of it.

To make a long story short, FSP 117-a will continue the accounting profession's practice of overstating the amount of a charity's assets that are freely spenadable. For institutions with large endowments, this means that to donors and legislators, much of endowment looks like it is available for current expenditure despite legal restrictions which prohibit the institution's board from spending the funds. As our Jack Siegel pointed out in his recent article, FASB Puts Infinity Up on Trial: Accounting for Endowments, 60 EOTR 23 (April 2008), the inaccurate reporting mandated by FASB will pose serious problems for colleges and universities. For example, rising tuition and related costs...

SOMEONE FINALLY RECOGNIZES THAT EMBEDDED TAXING HAS GOTTEN OUT OF HAND

DATELINE: March 26, 2008, Chicago

It's truly amazing. Whole Foods once again hit our Jack Siegel up for a charitable contribution at the checkout counter last week. After the last incident, when the checkout clerk roughed up his bananas, Jack was surprised to be asked again. But this time, Jack was ready, interrupting the clerk in midsentence to tell her that she shouldn't bother.

Well, Whole Foods is not the only one that pitches people at the proverbial checkout counter. Anyone who has looked at...