Charity Governance

A MEDIA SURGE WHEN THE WHIP COMES DOWN: MORE LESSONS IN SETTING COMPENSATION

DATELINE: July 22, 2008

Yeah, baby, when the whip comes down
When the whip comes down
(I'll be running this town, I'll tell you)

Rolling Stones, When the Whip Comes Down from Some Girls

Talk about a surge.  It seems like the entire staff of the San Diego Union-Tribune has been covering what is a clear crisis for the Southeastern Economic Development Corp (SEDC).  For the last six days, the newspaper has posted at least one article each day, with graphs, charts, and supporting documentation also posted on the newspaper’s Web site.  Reporters Helen Gao, Matthew T. Hall, Jeff McDonald, and Jeanette Steele have all contributed to the overall story.

So here are the facts:  SEDC is charged with handling redevelopment of a 7.2 square mile area east of downtown San Diego.  Government officials have raised a series of questions about...

ALL STYLE, NO SUBSTANCE: THE SMITHSONIAN’S BOARD OFFERS LESSON IN WHAT NOT TO DO

DATELINE: April 15, 2008, Chicago

Much will be made of the today's article by Washington Post reporters James V. Grimaldi and Jacqueline Trescott regarding the February 2008 resignation of Pilar O'Leary, the head of the Smithsonian's Latino Center. Smithsonian Official Resigns After Ethics Violations. The story is tailor-made for critics of big-spending nonprofit executives. According to Grimaldi and Trescott, O'Leary was taking down about $200,000 in salary from the Smithsonian in 2005 and 2006.

Apparently wondering why O'Leary stepped down, the Post filed a FOIA request for the Smithsonian Inspector General's report covering his investigation of O'Leary. The Inspector General concluded that O'Leary "had...

ORU BOARD OF REGENTS SHOULD GET ORAL ROBERTS OFF CAMPUS

DATELINE: October 24, 2007, Chicago

Is it a dream? Is it a lie?
I think I'll let you decide.
Just light a candle for the kids

Arcade Fire, Neighborhood #3 (Power Out)

"This is a warning to other boards just how serious it is that they do their jobs," said George Pearsons, the chairman of Oral Roberts University's board of regents, as reported today by Tulsa World reporter April Marciszewski in an article entitled Regents Take Stronger Role After Lawsuit. Well we hate to say it, but all boards seem to get...

FIRST THERE WAS PACI, NOW ECCI MAKES SOME CHARITIES FEEL ICKY: IRS COMPENSATION COMPLIANCE STUDY

Dateline: March 1, 2007.Chicago

Today we received written confirmation that the IRS is focused on the intermediate sanctions and executive compensation at the nation’s charities.  Specifically, the IRS released the Tax Executive Compensation Compliance Initiative Project Report.

The IRS contacted 1,826 exempt organizations—1,428 public charities and 398 private foundations—regarding their executives’ compensation. Part I of the Project involved compliance check letters sent to 1,223 organizations, and Part II included 782 examinations, 179 of which resulted from responses to the Part I compliance checks.  The survey did not use statistically valid sampling techniques so its results should not be extrapolated.

Grabbing the headlines are the 30%...

TRANSPARENCY AFTER THE FACT: AMERICAN UNIVERSITY UNDER IRS AUDIT

Dateline: February 27, 2007, Chicago

Ah yes, that recent unpleasantness.  You remember September 2005, and all that hubbub over American University President Benjamin Ladner’s compensation:  the personel chef, the elaborate meals, the first-class air travel, and all the other perks.  The IRS may work slowly, but it works.  In a February 23, 2007 memorandum to the campus community, Cornelius Kerwin, the university’s interim president, announced...

THE BONNARD COMES OUT OF THE CLOSET: THE IRS CAN’T BE FAR BEHIND

Dateline, February 16, 2007, Chicago

Stephanie Strom broke a blockbuster in to today’s New York Times.  See Stephanie Strom, Donors Sweetened Directors’ Pay at MoMA, New York Times, February 16, 2007.  Some are already calling it their favorite Strom story.  Others are demanding that it be included in good governance presentations.  The story involves the Museum of Modern Art (MoMA) and Glenn D. Lowry. 

We’ve all confronted the problem that Lowry faced some twelve years ago when he was asked to leave Toronto to become MoMA’s executive director.  New York is an expensive place to live.  How does one make do...

U.S. ATTORNEY INDICTS PENNSYLANIA STATE SENATOR VINCENT FUMO FOR ALLEGEDLY DEFAUDING TWO CHARITIES

Dateline: February 6, 2007, Chicago

We have been waiting for over a year to see whether Pat Meehan, the United States Attorney for the Eastern District of Pennsylvania would indict Pennsylvania State Senator Vincent J. Fumo.  The indictment came down today.  Our very own Jack Siegel wrote about Fumo in his article, The Wild, the Innocent, and the E-Street Shuffle:  Interactions Between Charities and Politicians, which first appeared in the November 2006 issue of the Exempt Organization Tax Review.  Jack characterized the allegations reported in news accounts as falling within Category II, New Patronage.  Scanning the indictment quickly, it appears that the allegations may also place this story in Category III, Soft Landings.

Here is what the U.S. Attorney had to say...

MIGHT THE INTERMEDIATE SANCTIONS FAIRY BE PAYING A VISIT TO THE FORMER HEAD OF PHILADELPHIA’S SEAPORT MUSEUM AND ITS BOARD OF DIRECTORS?

Dateline: January 28, 2007, Chicago

Seems that college presidents may not be the only ones who love the lavish lifestyles of the rich and famous.  A number of Philadelphia media resources are reporting that the Independence Seaport Museum has filed a lawsuit in Massachusetts state court asking that the assets of former Seaport Museum president, John S. Carter, be frozen.  Craig R. McCoy and John Shiffman, Ex-Head of Seaport Museum Accused of Fraud:  Officials Claim John S. Carter Defrauded the Instituion of $2.4 Million to Support His Lavish Lifestyle, Philadelphia Inquirer, January 23, 2007.  The museum is seeking to recover its loss from...

CALIFORNIA ATTORNEY GENERAL ENTERS INTO A SETTLEMENT AGREEMENT WITH THE AMERICAN RED CROSS: PUZZLING, BUT VERY INTERESTING

Dateline: January 22, 2007, Chicago--GO BEARS

Now-former California Attorney General Bill Lockyer announced late last year (December 27, 2006) that he had entered into an agreement with the American Red Cross (ARC) over its Donor Direct program and the way the ARC determines executive compensation.  In the past we have defended the ARC against certain attacks made by the media and elected officials, but even we are beginning to wonder:  This is a major charitable organization with hundreds of millions of dollars flowing through its coffers.  Why...

DAVID WREN REPORTS THAT FIVE RIVERS COMMUNITY DEVELOPMENT CORP HAS CLOSED DOWN: THE LIVIN' IN SOUTH CAROLINA JUST GOT A LITTLE SMALLER

Dateline: November 28, 2006, Chicago

Reporter David Wren of the Myrtle Beach Sun News hammered the final nail into the coffin that has become the Five Rivers Community Development Corp when he wrote his latest story, Five Rivers Closes Down Amid Scandal: Investigation Will Continue; ’05 Tax Return Filed, Sun News, Nov. 19, 2006.  Wren has been following developments in this story closely, with an entire series that is well worth everyone’s time.

Is it any surprise?  Not really, if you read...