Thursday, May 7, 2009

Nonprofit Imperative

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What’s Included:
Skunk of the Month
Getting off was not enough
Nonprofit News-In Case You Missed It
Nonprofit Lobbying Obama Appointment Push; Serve America Bill Law; Foundations Hit Badly By Economy
Political/Official Chicanery

Congressman; Police Chief; Library Board President; IRS employee
Comings and Goings
What Do You Think?
***the single biggest inquiry we have is… ‘where do you find these misdeeds?’ To the degree possible, we will cite our sources so that you can follow up on these seemingly astonishing (and sordid) tragedies. Enjoy!

Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:

What’s Wrong with this Picture?
The executive director of Genesis Family Center, a Fresno (CA) child-welfare agency, was charged with embezzling more than $500,000. She was sentenced to three years on probation and 300 days in a work-furlough program with electronic monitoring after she pleaded no contest to felony tax evasion and embezzlement. Even in the face of the conviction she stayed on as the agency’s chief executive officer. She ignored the judge’s order that forbade her from attending social events while on probation and in a work furlough program. Her picture was splashed in a magazine at social events and she was seen at luncheons. The judge had her arrested and he sentenced her to a year in jail. She finally resigned her position with the nonprofit. (fresnobee.com)

Nonprofit News-
In Case You Missed It:
1. As he sat on the board of directors and vice president of finance, he embezzled nearly $700,000 from the Columbian Retirement Home, a (CA) nonprofit retirement facility operated by the Knights of Columbus. (Mercury-Register)
2. A coalition of nonprofit groups has started a campaign to exempt lobbyists for charitable and social welfare organizations that have tax-free status from being considered for appointment in the Obama administration. (NYT)
3. President Obama signed landmark legislation that boosts national service, volunteerism, and innovative social projects. The Edward M. Kennedy Serve America Act is to expand the country’s national-service programs and provide money for entrepreneurial approaches to social problems. While the Serve America Act outlines federal programs that can now expand or start operating, Congress still has to allocate money to pay for them.
4. The Fidelity Charitable Gift Fund, Vanguard Charitable Endowment Program and the Schwab Charitable Fund are some of the growing donor funds. In part the growth is because private foundations are frustrated by increasing fees, tax requirements and general upkeep. Donor funds allow donors to take an immediate tax deduction after making contributions; donors can advise the fund on where the grants should go; the funds don't have to make distributions as often as a foundation would; donors can give many types of assets -- including cash, securities and even art -- depending on the fund's specific rules. (WSJ)
5. Maria Eitel, president of the Nike Foundation, is to be chief executive of the Corporation for National and Community Service, President Obama announced. The corporation manages the country’s national-service programs, which are set to grow significantly under the Serve America Act. (Chronicle of Philanthropy)
6. The former executive director of Children’s Alliance (CO) was arrested and accused of stealing $20,000 from the organization (DenverChannel.com)
7. The nation’s foundations lost nearly $150 billion in assets last year, or almost as much as they have given away over the last four years, a new Foundation Center study has found. Foundation giving for the year nonetheless held steady at an estimated $45.6 billion, falling by just 1 percent on an inflation-adjusted basis. Nearly two-thirds of foundations expect to reduce the number or the size of grants they award in 2009. (NYT)
8. The former pastor of a prominent North Shore Episcopal church stands accused of stealing $84,537 over the three years from his parish to pay for plastic surgery and Botox injections, as well as prescription drugs. (topix.com/religion)
9. The former accountant and office manager for Cornerstone Christian Fellowship has been sentenced to five years in prison for embezzling $495,000 from the Chandler (AZ) church. (Azcentral.com)
10. A former employee of the Lucile Packard Foundation for Children's Health pleaded no contest to embezzling more than $350,000 over an eight-year period from an endowment fund intended to help sick youths. (San Francisco Chronicle)
11. The deputy director of two NYC Head Start programs has pleaded guilty to stealing $600,000 from the program (usdoj.gov)
12. A director and initial incorporator for United Way of the Mountains, its successor, Kentucky Charities United, and Feed God’s Children, Inc. have been convicted of using money raised to pay for residential utilities, vehicle loan, vehicle insurance and other living expenses. (The Morehead News)
13. A Baltimore pastor who worked with developmentally disabled people as an operations manager for the Arc of Baltimore was charged with befriending a blind and disabled man in his care, then paying a hit man $50,000 in church funds for an execution so he could collect on a $200,000 life insurance policy. The pastor had policies in his name as beneficiary worth nearly $1 million combined. (Baltimore Sun)

We flagged these few examples of nonprofit mischief
1. St. Paul’s Memorial Episcopal Church (NY) $85,000
2. San Diego Hispanic Chamber of Commerce (CA) $70,000 (S.D.Union-Tribune)
3. Turning Pointe Therapeutic Riding $209,000 (Westerlysun.com)
4. The Starting Place (FL) $2 million (Sun-Sentinel.com)
5. California State Bar $675,000 (Law.com)
6. First Witness Child Abuse Resource Center (MN) $125,000 (wcco.com)
7. Fremont (MI) Area Community Foundation $20,000 (Muskegon Chronicle)
8. United Steelworkers of America (PA) $88,000 (Pitt. Post-Gazette)
9. Ranch Hope (NJ) $350,000 (nj.com)
10. First Witness Child Abuse Resource Center (MN) $125,000 (Duluth News Tribune)
11. Salem United Methodist Church $113,000 (FDLREPORTER.COM)
12. First Congregational Church (MI) $50,000 (Gaylord Herald-Times)
13. First Baptist Church on Highland Avenue (NC) $300,000 (journalnow.com)
14. Community Senior Serv (CA) $1 million (Huntington Beach Independent)
15. Southern Arizona Legal Aid $18,000 (azstarnet.com)
*update

Political/public official chicanery (just a few):
1. Former (NC) congressman Frank Ballance who was convicted of fraudulently conspiring to exercise his influence over state appropriations for the personal benefit of his family is able to serve his remaining sentence at home. Federal prosecutors said that Ballance channeled $2.3 million dollars to a private foundation and the money was then diverted to the benefit of members of his family, including his son and mother. (Beaufort-observer)
2. A (CA) police chief, a mayor and a city councilman in his 40 years of public service has pleaded guilty to felony embezzlement for using his city-issued credit card to buy thousands of dollars in casino tokens and alcohol. His wife is in deeper trouble facing 23 felony counts, including grand theft and embezzlement, for allegedly getting more than $800,000 in loans under false pretenses from friends, neighbors and colleagues, including the mayor and city manager of Canyon Lake, and then paying them back with bad checks. In one instance she allegedly wrote a bad check to her husband. (L.A. Times)
3. The Roosevelt (NY) Public Library's former board president has been arrested on charges she stole $47,000 from the library to pay for airplane tickets, car repairs and groceries. In 2002, it was reported that the library's then-business manager allegedly misappropriated $15,000 of library funds. (OrlandoSentinel.com)
4. The former Standish (MI) city treasurer has pleaded no contest to neglect of duty in an embezzlement case. He made illegal transfers involving city tax accounts at the direction of the former City Manager, who faces charges of embezzlement and neglect of duty. (Chicago Tribune)
5. A contract worker for the U.S. Internal Revenue Service has been found guilty of embezzling nearly $500,000 in remittance checks (UPI.com)
6. A federal judge sentenced a former Buchanan County (MO) official who pleaded guilty to stealing money meant for 120 people, altering accounting records in her office to hide the embezzlements and submitting false reports to the Social Security Administration. She acknowledged taking the money between September 2003 and August 2006. (KansasCity.com)
7. The former executive director of the Bullskin Township/Connellsville Township Joint Sewerage Authority is in the Fayette County Prison after being charged by state police with siphoning more than $100,000 from the authority. (wpxi.com)
8. Former municipal court clerk and utility department clerk for the Town of Taylorsville, has been indicted on one count of embezzlement. She allegedly embezzled $6,041.63. (Meridian Star)
9. Belington (WV) Little League treasurer was convicted $13,000 (State Journal)
10. A parking meter repairman stole more than $170,000 from the City of Alexandria, VA… in coins. (kare11.com)

Charity Check Up:
She put over $200,000 in mostly grant money in an unauthorized account. She is currently in custody for violating the terms of her bail. She used some of the stolen $209,000 for personal use with the rest sitting in her account. She pled no contest to a previous charge of marijuana possession where she was smoking a marijuana cigarette during a court-warranted search. She is currently serving the last year of a four-year suspended sentence after pleading guilty in 2005 to a larceny charge for stealing $14,000 from an elementary school cancer fund, where she worked as a secretary.

Where was the judgment of the hiring authority in this case? Obviously a reference check never took place. Who was overseeing the bookkeepers work? Were there internal controls in place for check cashing/endorsement and depositing?

What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.

Recent (cites) Comings and Goings:
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)

Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).

© Gary R. Snyder, All Rights Reserved, 2009
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