Charity Governance

SENATOR GRASSLEY’S LATEST PROPOSAL IS A CLUNKER: KEEP THE PROHIBITION ON CAMPAIGN INTERVENTIONS

DEADLINE: January 13, 2011, Chicago

Buried deep in the staff memo accompanying Senator Grassley’s January 6, 2011 press release is one of the...

A BRANCH OF THE MICKEY MOUSE CLUBHOUSE: VITO LOPEZ UPDATE

DATELINE: October 14, 2010, Chicago

Several weeks ago we wrote about the Ridgewood Bushwick Citizens Council, a Brooklyn, New York nonprofit closely associated with New York Assemblyman Vito Lopez.  Although Lopez is not an employee or director of the organization, the extensive newspaper coverage in several papers draws a close connection.  At that time, someone has just begin to open what has quickly become a can of worms.  Since then, the lid has been removed to reveal several alleged abuses of this nonprofit.

As just one example, Aaron Short of the Brooklyn Paper reported yesterday that Brooklyn Queens Family Respite, which is a subsidiary of the Ridgewood Bushwick organization, received $1 million in taxpayer money to aid seniors.  This is Supposed to be A Senior Center. It’s Actually Vito Lopez’s Clubhouse (Oct. 13, 2010).  You would naturally expect to see happy seniors on the ground floor of the organization's facility.  Instead the first floor is used as a...

IS NEW YORK ATTORNEY GENERAL ANDREW CUOMO READY TO REDUCE WASTEFUL GOVERNMENT SPENDING?

DATELINE: September 20, 2010, Chicago

Here is a story that should make Gary Snyder's (author of Nonprofits on the Brink) hair burst into flames: The New York Post reported last week on the board of a New York charity that is out to lunch, albeit a very expensive lunch.  Joseph Goldstein and David Seifman, Vito Lopez-Backed Charity Led by the Clueless (September 16, 2010).  The charity in question is the Ridgewood Bushwick Senior Citizens Council.  Now you ask:  How much money could be at stake when it comes to a senior citizens council?  According to a follow-up by the Post, the organization has received “at least...

THE PROBLEM FACING NONPROFITS DEPENDENT ON GOVERNMENT FUNDING: AN OBSERVATION

DATELINE: August 16, 2010, Chicago

We are on the email list for a newsletter from the National Council on Nonprofits, which always proves to be interesting reading.  The August 16, 2010 issue, taken as a whole, provides insight into the problems facing nonprofits that are highly dependent on government funding.  The lead story  focuses on the passage of the $26 billion legislation to help states with their own budgetary woes, but it notes that this came at a cost—a $10 billion cut in the federal food stamps program. 

The second story then discusses the failure of...

NONPROFITS USED AS A VEIL FOR EARMARKS: WILL STATE ATTORNEYS GENERAL OR THE IRS TAKE A LOOK?

DATELINE:   July 5, 2010, Chicago

Those pesky earmarks.  Everybody thought congressional rule changes would end one avenue on the road to congressional waste.  However, the quest for campaign contributions appears to have simply brought about a change in the legal form that the recipients of earmarks take.  Businesses can no longer receive earmarks, but nonprofits are still eligible.  Smart business people and their lawyers are now using nonprofits to collect earmarks, according to a front page article by Eric Lipton and Ron Nixon in today’s New York Times.  Companies Find Ways to Bypass on Earmarks.  We admire the clever structuring, but we are not at...

SUSTAINABLE?

Sleeping is giving in, so lift those heavy eyelids.

Arcade Fire, Rebellion (Lies) from Funeral

DATELINE: June 30, 2010, Chicago

As regular readers of this column are well aware, the drive to enable benefit corporations in New York has resulted in a flurry of activity...

BEWARE: BENEFIT CORPORATIONS APPEAR TO BE A TROJAN HORSE DESIGNED TO FEED AT THE PUBLIC TROUGH

DATELINE:  June 29, 2010, Chicago

Recall that the New York State Senate recently passed S7855 to enable the creation of benefit corporations.  We decided to take closer look at New York’s existing corporation law to see whether this pending legislation is really necessary.   The legislative history to the bill states:

Currently, socially-minded companies are often left with the catch-22 of either not being able to earn a profit or opening their directors up to possible personal liability for decisions that do not maximize shareholder value or increasingly going to states other than New York that are pursuing this corporate form. This bill solves that dilemma. Without increasing regulation or impacting the state budget, the bill: * Removes legal impediments preventing businesses and investors from making their own decisions to use sustainability and social innovation as a competitive advantage.

We are not at all sure...

WE ARE SKEPTICAL ABOUT BENEFIT CORPORATIONS: EXISTING CHARITIES SHOULD BE MORE THAN SKEPTICAL

DATELINE: June 29, 2010, Chicago

We're going to do our dance, Bring the doubters on. They don't matter at all 

Justin Bieber, Never Let Go from My World 2.0

Yesterday, we wrote about the benefit corporation legislation working its way through the New York State legislature.  We are even more skeptical today than we were yesterday.  One group behind what appears to be an effort to bring benefit corporation legislation to every state is B Labs, a nonprofit corporation that certifies B corporations. 

Yes, we said...

THE IRS NEEDS TO INVESTIGATE STATE OF ILLINOIS FUNDED TAX-EXEMPT ORGANIZATIONS CONTROLLED BY POLITICIANS AND THEIR APPOINTEES

DATELINE: June 21, 2010, Chicago

We’ve written before about the abuse of charities by politicians.  One thing is quite clear:  State and local politicians, particularly those who govern Illinois, are incapable of policing themselves or cleaning up the messes they make.  We’ve seen that with a series of federal investigations of political corruption—the most recent example being former Governor Rodney Blagojevich, now on trial.    

A federal prosecutor and criminal proceedings are not always necessary.  The IRS has authority to police many of the shenanigans using the intermediate sanctions in Section 4958 of the Internal Revenue Code.  Take the case of the DuPage National Technology Park. According to the Chicago Sun-Times, the 800-acre park has received $34 million in state grants, in addition to federal and local funding.  Dave McKinney, Ex-Naperville Councilman is the King of Nothing (September 21, 2010).  The expectations were that a vibrant tech park would result.  After almost a decade, only...

JUST WHAT WE NEED, MORE GOVERNMENTAL MEDDLING IN THE NONPROFIT SECTOR: KILLING ME SOFTLY WITH KINDNESS

DATELINE:  June 20, 2010, Chicago

Leave it to our Aussie friends down under to bring  H.R. 5533, a bill introduced by Representative Betty McCollum last week, to our attention.  The bill is entitled the “Nonprofit Sector and Community Solutions Act of 2010.”  Here’s a suggestion for Representative McCollum and her friends:  Before you go screwing around with the nonprofit community, why don’t you attend to pressing business, like fixing the mess...