Charity Governance

THE NONPROFIT SCANDAL OF THE YEAR: THE FIESTA BOWL, PART II

DATELINE: April 1, 2011, Chicago

Let's turn to the second interesting aspect of the Fiesta Bowl scandal.  For the facts, particularly regarding the outline of the investigatory process, see our earlier post.

Every planning committee that puts together a nonprofit law conference faces a dilemma:  "How do we work legal ethics into the discussion so that the attendees can fulfill their CLE requirements?"  Anyone who has sat through an hour-long ethics panel knows all too well that more often than not, these panels are real snoozers, which is surprising given the fact that the late Louis Auchincloss, a well-known estates and trusts lawyer, began his second career as a novleist who focused on white shoe lawyers and the ethical questions that they faced. 

The Fiesta Bowl scandal produced two investigations at its board's behest.  Great fault lies with the first, but the second (the RKMC report) proves to be a textbook case on how to conduct an investigation.  In reading the RKMC report, we notice a number of interesting legal ethical issues and investigatory tactics that are worth...

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...

UNIVERSITIES WITH ENDOWMENTS AND FOUNDATIONS MAY RECEIVE A LESSON IN ANTI-TRUST LAW

DATELINE: March 23, 2010, Chicago

Any lawyer who has every represented an investor looking at private placements—be the investment a hedge fund, private equity deal, tax shelter, or oil and gas deal—always shakes his head.  The offering circular normally comes in at 150 to 200 pages  of fine print, with pages of risk factors listed upfront.  What always is amazing are...

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:...

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...

UNLUCKY BINGO PLAYER’S SON INJURED AT NONPROFIT FUNDRAISING EVENT: ANOTHER REASON TO READ LEASES CAREFULLY

Dateline: May 3, 2007, Chicago

Nonprofits that stage events off premises should pay careful attention to the indemnification and insurance provisions contained in what are often one or two day leases. This is particularly true when holding a meeting or convention at a large conference hotel. These agreements are notorious for requiring the meeting sponsor to indemnify the hotel for any damage to the facilities caused by one of the meeting attendees. This often includes not only damage to the meeting rooms, but also to attendee…