(A “Heads Up” to Boards and Trustees?)
(By Joe Koletar) Is there anything more good and pure than a charity?
There are over one hundred thousand of them in the United States alone. We have all seen their ads or received their solicitations. Each cause seems both important and noble: sick children, abused animals, wounded veterans, battered women, the arts, education, feeding the poor, etc.
These charities (called Not-For-Profits) may be national in scope or regional. They may have an ethnic or religious base. They may raise thousands or even millions to advance their worthy cause.
Unfortunately, they are filled with people, those most elusive of all creatures. Most are good. Some are not.
This is hardly an issue peculiar to NFP’s – Presidents have gone bad; Members of Congress; religious leaders; members of the medical, education, accounting and legal professions; Agents of the CIA and FBI. The list could go on. Are we to throw up our hands and trust no one? Of course not; but some thoughtful analysis may be in order.
NFP misdeeds fall roughly into two categories:
• Shady people pretending to represent an established charity;
• Others who solicit funds for a fictitious charity.
Let us focus on the performance of the legitimate charities.
The 2/23/15 edition of Crain’s New York Business carried the following article:
“Nonprofits In Search of Accountability,” by Reynold Levy, page 9. Mr. Levy has been an executive in several NYC charities and has a forth-coming book: “They Told Me Not To Take That Job: Tumult, Betrayal, Heroics, and the Transformation of Lincoln Center.”
His article recounts problems encountered by several NYC-area charities:
• The New York City Opera.
• The Federation Employment and Guidance Service.
• Yeshiva University, and its Einstein School of Medicine and its Cardozo Law School.
• The Metropolitan Council on Jewish Poverty
One suspects Mr. Levy could cite more examples and perhaps he will in his book, but his message seems consistent – where were the watchdogs? He asks that simple question of the trustees, the State Attorney General, the staff of such charities, and the audit firms that examined the financials.
He could add at least one more group to that list – the donors. Are we to assume that doing our homework ends when we graduate from school? The message seems simple:
• Continue to support the charities of your choice, but ask questions;
• There are groups that monitor charities and report on their financial performance. Look at “administrative expenses,” which can be a significant portion of funds donated. Ask what these expenses are. Why they are necessary?
• Ask for information as to salaries paid to top executives – some are well into the six-figure range.
In short, be an informed donor and ask the watchdogs to pay closer attention.
Copyright 2015
Joseph W. Koletar
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