Connections and friends in the right places matter as much in the nonprofit sector as they do in corporate America and the government. Witness two recent instances of nonprofits running into serious trouble — and the very different results that happened to them.
In the first instance, reported by the New York Times, a friend of the founder of the Association of Community Organizations for Reform Now (Acorn) ponied up almost a million bucks to cover the debt incurred when the founder’s brother embezzled scratch from Acorn. Talk about it’s not what you know, it’s who you know:
[Drummond] Pike[,the founder and …read more

An L.A. Times expose of for-profit fundraisers elicits a good amount of citizen journalism exploring same. | Los Angeles Times
Ten things most people don’t know about nonprofit careers. | CTW Features
How effective are British nonprofits? Maybe not so much. | Financial Times
Two very different ways of dealing with nonprofit embezzlement. | New York Times
Microsoft gets into the nonprofit software resource game. | WebProNews
It’s wicked easy to subscribe to 501(c) Files feeds: Just click here and follow the simple instructions. As always, thanks for reading! | 501(c)

Fundraising isn’t hunting, and donors aren’t prey. | Toronto Globe and Mail
A chance for fundraisers to say what they need. | UK Fundraising
How nonprofits can reduce their risk of embezzlement by employees.| Kearney Hub
The ease and difficulty nonprofits face in going viral.
It’s wicked easy to subscribe to 501(c) Files feeds: Just click here and follow the simple instructions. As always, thanks for reading! | 501(c)

Philadelphia’s CBS affiliate, KYW-TV/Channel 3, is reeling from news that federal agents seized the computer of its lead anchor, Larry Mendte, who is suspected of reading the personal e-mails of his former coanchor, Alycia Lane. Lane, you may recall, was accused of hitting a New York cop late last year, and though the charges were dropped, KYW sacked her in the wake of a string of controversies that made her the news far too often. According to newspaper reports, Mendte and Lane had developed a frosty relationships toward the end of their tenure together, with each wanting credit for their …read more

As the Nonprofiteer demonstrated Tuesday, one person’s ethics can be another person’s unwanted obligations. Houston Chronicle business columnist Shannon Buggs wrote last week about a set of principles recommended by a panel convened by Independent Sector, a coalition of charities, foundations, and corporate giving programs, regarding "ethical conduct, accountability, and transparency." Six of the 33 guidelines issued by the panel are required by law, so debate them if you’d like, but it ain’t gonna change anything. The other 27, though, have stirred up some disagreement within the sector, with the Association of Fundraising Professionals joining dozens of nonprofits signing on …read more

A new study puts an estimated price tag on what theft by nonprofit employees costs their organizations each year.
Forty billion dollars. That’s billion, with a "B."
From yesterday’s New York Times:

Almost 95 percent of the reported frauds entailed loss of cash, and a majority of those involved false or inflated invoices, billing for expenses that were never incurred and check tampering.
“I gave a talk to a group of nonprofit executives a few weeks ago, and every single one of them had a fraud story to tell,” said one of the report’s authors, Janet S. Greenlee, an associate professor of accounting at …read more

A pair of stories that broke recently offer some lessons for nonprofits on how to deal with bad news that becomes public.
In New York, the Juvenile Diabetes Research Foundation not only cashiered a couple of employees when an internal audit revealed that hundreds of thousands of dollars was missing, it also asked the Manhattan district attorney to launch an investigation.

“It’s a foolish person who tries this,” [Gail] Pressberg[, secretary of the foundation's board,] said. “We catch people.” She noted, “We had enough evidence to terminate the employees. There’s no nonsense in this organization.”

Meanwhile, Jimmy Wales, the founder of Wikipedia, which …read more

A poster at Ask Metafilter yesterday asked, “How do I choose between two equally worthy charities to receive my donation?” He actually had more than two charities to choose from in the area he had opted to support, animal-related organizations, and he added, “Ultimately, what I want is a method to help me identify a handful of organizations that I feel really good about, and to whom I can donate for years to come.”
There were some terrific responses there; the one that stood out most to me was from a fundraiser who offered concrete advice on reading IRS 990 statements, …read more

The Des Moines Register devoted major real estate on its editorial page yesterday and today calling for greater government oversight of nonprofits and the public release of penalties imposed on those found in noncompliance of laws, respectively. The knee-jerk answer is to decry such calls — using the phrase “witch hunt” liberally — and point out that government has far more pressing problems to address. Yet the fact is that nonprofit malfeasance — especially among tax-exempt nonprofits — puts an unfair strain on those in the private and for-profit sectors that are paying their fair share, it robs the public …read more

Certain professions bring greater condemnation when their members commit wrongdoing. Crooked cops and politicians, for example, are singled out by judges and prosecutors for abusing the public’s trust; sentencing day typically brings far harsher lectures from the bench for these criminals than for the garden-variety types boosting stuff from private citizens. Gary R. Snyder, the author of Nonprofits: On the Brink, is troubled by a lack of such condemnation and accompanying stiffer penalties for nonprofit professionals who engage in illegal activity:
For decades, the nonprofit sector has maintained a well-deserved imagine that has endeared it to the general public. The basis …read more