Wednesday, May 20, 2009

Nonprofit Imperative

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May 2009
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"Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big." (Bernard Madoff’s secretary’s account)

What’s Included:
Skunk of the Month
Genesis Family Center; Speaker of House in FL.; Maricopa Com. College
Nonprofit News-In Case You Missed It
Cheating the Blind; Obama Promoting National service; Obama Wants Restricted Nonprofit Lobbying
Political/Official Chicanery
Congressman cheated campaigns; Sheriff; N.Y. Federal Reserve Resigns
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:
Update: In our last edition we shared with you the vagaries of Genesis Family Center and how the past chief executive violated her probation after pleading no contest and she was convicted of felony embezzlement and tax evasion. The county supervisors rejected a contract with the nonprofit citing questions about its troubled past. The county was its major donor. ( Update-2: The former executive director of the Genesis child welfare agency pleaded no contest to drunken driving and was given a jail sentence that runs concurrent with her violation of probation. (The Fresno Bee). Update-3: Upon being confronted by police the Genesis exec. directed an expletive-laced tirade at officers, ordering them off her property, according to the report. She also called a female officer a derogatory name, (The Fresno Bee).
This one has it all
He was elected speaker of the Florida House and then his house of cards started to collapse. Both he and his friend, the president of Northwest Florida State College face felony misconduct charges for allegedly misusing $6-million in state funds for a campus construction project. The speaker inserted the $6-million into the state budget in 2007 for what college officials had described as an emergency-management operations center. A grand jury believed that the money was to sublease a hangar adjacent to a private jet operation owned by a friend of the speaker and contributor, who has given millions of dollars to his and others campaigns. The newly elected speaker accepted an unadvertised $110,000-per-year job at the college. That position arose after the speaker had steered $35-million in construction funds to the college, according to The Miami Herald. When this broke the speaker stepped down as speaker and resigned his post at the college. The president of Northwest Florida since 1987 was also indicted for perjury for allegedly lying to jurors during his testimony on about plans for the building. (Chronicle of Higher Education). Northwest Florida College president is the "poster boy'' for abuse and "retired'' in 2007, collected a payment of $553,228 and started collecting a monthly pension of $8,803 to go with an annual salary of $228,000. ( There is a call to the US Dept. of Ed & US Dept. of Justice to yank the accreditation of the College
Is a Third Strike an Out?
In order to provide nonprofits with retirement plans to their staff, Maricopa Community College District broke the law by misrepresenting at least 22 employees of non-profit organizations as district employees for years. The district paid their salaries and benefits and then accepted reimbursement. The audit of the college district marks the third time since 2006 that the state auditor has found that public entities misused public money by allowing non-profit organizations to get public-employee benefits. A 2006 audit of Santa Cruz County found the county improperly made loans to a non-profit corporation to cover the non-profit's payroll costs and allowed the employees to participate in the state retirement system. In 2007, state auditors found the Maricopa County Regional School District paid salaries and provided benefits to employees of a non-profit company.

Nonprofit News-
In Case You Missed It:

1. A mother and daughter who managed a D.C. government program aimed at employing blind vendors were indicted on charges of embezzling $281,000, much of which was supposed to be paid to the vendors, who were working at snack bars, cafeterias and gift shops in federal buildings. (Washington Post)
2. The Chief Financial Officer for Traveler’s Aid of Metropolitan Atlanta, a charitable organization that provides housing, support and assistance to homeless men, women and children in the Atlanta metropolitan area abused her position. She embezzled more than $164,000.00 of the charity’s funds and used that money for her own needs. (FBI Press Release)
3. An accounting director is expected to plead guilty to embezzling more than almost $600,000 from his former employers---American Society of International Law and the American Bakers Association. He is accused of embezzling about $445,000 from the law society and $145,000 from the bakers association. (
4. In 2007, it’s believed she took $200,000 from a business, but no charges were filed. Now she is accused of embezzling more than $400,000 from the Hinton Economic Development Authority (OK) (newsok)
5. Using leads largely through the membership of the Church of Jesus Christ of Latter-day Saints in Lake Arrowhead, Terrance Tucker and Sonya Tucker are currently in custody for what federal prosecutors called a “mill scheme,” a scam that squeezed about $31 million from financial institutions and up to $2 million from individuals. A “mill” is a real-estate financing scheme in which they brokered real-estate loans by banks or other lenders, using fraudulent documents. (Mountain News)
6. The fired technology director for LifeGift Organ Donation Center pleaded guilty in Houston federal court to illegally accessing her employer’s computer and deleting files including organ donation database records. After being terminated, Danielle Duann, 51, repeatedly gained access to the LifeGift network and intentionally caused damage that cost the nonprofit Texas organ procurement group more than $94,000, officials said. A charity spokeswoman said the files were retrieved and no lives were put in jeopardy. (
7. While posing as various charities --- including The Boys and Girls Club, Planned Parenthood, Teen Pregnancy Help Center, the YMCA, various domestic abuse shelters---the police investigated and arrested Norita Appleby. She will be charged with misappropriation of an Entity's Identifying Information, a class H felony. (
8. A grand jury has indicted the Tucson Museum of Art's accountant with embezzling nearly $1 million. (
9. President Obama's budget for next year will include $50 million to help expand nonprofit programs across the country to promote national service
10. The Council on Foundations surveyed 430 foundations in March and found that 62 percent expect to reduce their grant making this year. Almost half of the respondents said they will decrease their giving budgets by more than 10 percent. (Chronicle of Philanthropy)
11. It appears that the Obama administration’s restrictions on lobbying are drawing criticism even as the administration defends the policies. The controversy surrounds two policy documents: one addresses restrictions on hiring lobbyists and others as political appointees, and the other focuses on communications by lobbyists about use of Recovery Act funds. (OMB Watch)
12. The IRS reminds small calendar year tax-exempt organizations to file their electronic Form 990-N, known as the "e-Postcard," by the May 15 deadline. To get more information about the annual electronic filing requirement for organizations whose annual gross receipts are normally $25,000 or less, go to
13. Former Haven Humane Society CEO Norman Ray Ryan was convicted of five felonies in the embezzlement from the nonprofit group. (
14. A new study of the Bill and Melinda Gates Foundation illustrates its global reach with spending on health issues, but notes a need for accountability on whether the money is being spent in the most effective way.
15. The president and director of YouthBuild Pensacola Inc., was arrested on state charges of aggravated white-collar crime and organized fraud and theft of $65,000 mostly intended for small businesses participating in the program. He is a former executive director of the Gulf Coast African American Chamber of Commerce and former principal of the now-defunct Gulf Coast High School, which was a charter school. (
16. The Internal Revenue Service has added a detailed site map to its “Charities and Nonprofits” Web site to help visitors find what they are looking for. (Chron. Of Philanthropy)

We flagged these few examples of nonprofit mischief
1. St. Mary Magdalen Catholic Church (FL) $1 million (Orlando Sentinel)
2. Crow Creek Tribal School $6000 (S.D.) (Capital Journal)
3. Baldock Health Care Center in North Huntingdon, and Humbert Lane Nursing and Rehabilitation in Washington (PA) (Post Gazette)
4. Wellsville-Middleton School District (MO) $214,000 (wgem)
5. City of Springfield (MO) $750,000 (wgem)
6. Danville Harvest Jubilee (NC) $85,000 (Danville News)
7. Macon (GA) Waves $30,000 (
8. University of St. Thomas (MN) $178,400 (bulletintoday)
9. Union Township (MI) unknown (themorningsun)
10. Options in Supported Living (CA) $225,000 (Sacramento Business Journal)
11. Central Maine Growth Council $29,000 (
12. Christ Episcopal Church (VA) $300,000 (
13. Association of Fish and Wildlife Agencies $180,000 (Washington Post)
14. Long Beach Unified School District/Long Beach Education Foundation $100,000 (
15. Memorial Christian Church thousands (
16. Colours $140,000 (courier-post)
17. Knights of Columbus (FL) $18,000 (
18. A New Beginning (KS) $3.76 million (
19. National Children's Alliance (MD) $15,800 (fox13now)
20. Coalition to End Family Violence (CA) $50,000 (Ventura County Star)
21. Tufts University (MA) $300,000 (The Tufts Daily)
22. Salford Township (PA) $95,000
23. Sioux Empire Fair (SD) $579,000 (
24. Delaware Valley Regional High School District (NJ) $90,000 (AP)
25. Routt County Habitat for Humanity (CO) $75,000 (
26. The Yuma Southwest Contractors Association (AZ) $15,000 (
27. International Association of Machinists and Aerospace Workers District 9 (MO) $341,000 (St. Louis Business Journal)
28. Jubilee Restoration Inc (CA) $177,000 (
29. The American Task Force on Palestine (VA) $107,000 (Washington Post)

Political/public official chicanery (just a few):
1. A former political aide to Sen. Lindsey Graham (R-S.C.) will pay a civil penalty after embezzling hundreds of thousands of dollars from Graham's Senate campaign. In November 2008, Adams was sentenced to 18 months in prison and five years probation. She was also convicted of spending money from Graham's personal account. The campaign aide obtained a credit card in Graham's name sometime between 2006 and 2007. 

She had been convicted of fraud before. (The Hill)
2. The campaign manager for former Christopher Shays is being investigated by the Federal Election Commission, for significant financial irregularities. It is alleged that he quietly drained the account and had spent nearly $200,000 on Red Sox tickets, limousine travel, mysterious withdrawals at a casino and a donation of more than $1,000 to his synagogue. Mr. Shays said, “To lose an election is difficult; what happened since then is unimaginable.”
3. A former Okaloosa County (FL) Sheriff and former Okaloosa County Sheriff’s Office Director were indicted creating fictitious bonuses to sheriff’s department employees. The indictment alleges that Sheriff’s Office employees were directed to return all or a portion of the bonuses in the form of cash and cashier’s checks under the pretense that these returned funds were to be used for charitable purposes. (U.S. Attorney Press Release)
4. New York City’s longtime finance commissioner, Martha E. Stark, resigned amid a series of official inquiries. Ms. Stark faced new disclosures that she had been paid more than $134,000 in 2006 and 2007 for service as a board member of the Tarragon Corporation, a large housing builder and property owner not doing business in the city, a level of outside activity generally frowned upon by city regulations. Previously, it was reported that Ms. Stark was romantically involved with a former subordinate whose salary had risen sharply during the last three years she worked for the agency. She had decided to retain the husband of her first deputy commissioner as a parking ticket judge even though city investigators had found discrepancies in the time sheets submitted by the husband.
5. Two longtime supervisors at the Canyon County (WY) Division of Motor Vehicles are facing felony charges of grand theft of “a large” amount of money. (
6. They do not show up on staff rosters and touted belt-tightening, the California House and Senate leadership hired friends and close confidants to positions that totaled nearly a half a million dollars. (Sacramento Bee)
7. The chairman of the Federal Reserve Bank of New York resigned after questions were raised about his role as a director of Goldman Sachs and his purchases of stock in the company. This was after Goldman came under direct supervision of the New York Fed. He is representative of the too-cozy relationship between the New York Fed, which serves as the central bank's eyes and ears on Wall Street, and the bankers it oversees, critics say. (Washington Post)
8. Prosecutors are alleging that a 74-year-old spent $60,000 in public funds for personal use before retiring as Vernon (CA) city administrator five years ago. He reported a salary of more than $600,000 that had made him one of the state's highest paid city officials. (
9. Former New York state senator has pleaded guilty to fraud charges, admitting that he used charity groups to steal hundreds of thousands of dollars. Efrain Gonzalez admitted that he siphoned the money away from charity groups that received state grants from $200 million the New York Legislature. (NYT) His gal friend admitted her role in Gonzalez's theft of $200,000 in public money, but as part of a plea deal with the feds, she faces a likely sentence of between four and 10 months in prison. (daily news)
10. Former Fresno (CA) County Deputy Coroner Joseph Tiger was sentenced to 18 months in jail and 5 years of probation, after pleading guilty to embezzlement charges. Tiger was accused of stealing from the dead. (
11. A former Water Operations Supervisor for the City of Sonoma, Calif., pleaded guilty to personally receiving financial payments from a parts vendor with whom he had arranged contracts for the City.
12. A Macomb County (MI) postal worker is charged with stealing more than $19,000 in stamps and selling them for discount online to help pay his mortgage was arraigned. (

What do you think??? :
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (
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:
• Funding Incompetence (
• An Assault on Charities (
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (
• 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 (
• 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 (
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (
• The Accountants and Regulators Role in the Current Collapse (
• Veterans Whine as Executives Dine (
• Government agency Monitoring: Indifference and Hush (
• 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,, 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,, CORP! Magazine, Crain’s Michigan Nonprofit,,
Nonprofits: On the Brink (iUniverse, 2006)

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Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at,, Barnes and Noble (store) and (publisher).

© Gary R. Snyder, All Rights Reserved, 2009
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