A Best Seller Charity Under Scrutiny

by Gary Snyder

Greg Mortenson has several best sellers. One is Three Cups of Tea which has sold more than four million copies and is required reading for U.S. servicemen bound for Afghanistan.

The book and his non-profit organization, the Central Asia Institute (CAI), are being called into question. CBS and 60 Minutes began investigating complaints from former CAI donors, board members, staffers, and charity watchdogs about Mortenson and the way he is running his non-profit organization.

They found there are serious questions about how millions of dollars have been spent, whether Mortenson is personally benefiting, and whether some of the most dramatic and inspiring stories in his books are even true. Mortenson says the charity took in $23 million in contributions last year - some it from thousands of school children who emptied their piggy banks to help its "Pennies for Peace" program, and some of it from large fundraisers. President Obama donated $100,000 to the group from the proceeds of his Nobel Prize.

It has only had one financial audit since its inception. Some charge the Central Asia Institute's financial statements show a lack of transparency, and a troublesome intermingling of Mortenson's personal business interests with the charity's public purpose. According to Daniel Borochoff, president of the American Institute of Philanthropy, says that most of the program spending is not to help kids in Pakistan and Afghanistan, it's actually... what they call domestic outreach where he goes around the country speaking and the cost incurred for that, things like travel is a major component of that. It is just advertising for the books. Only 41 percent of the money CAI spent in FY 2009 actually went to schools in Pakistan and Afghanistan. The financials list $1.7 million in "book-related expenses." more than they spent on all of their schools in Pakistan last year. In fiscal year 2009, the charity spent $1.5 million on advertising to promote Mortenson's books in national publications, including a full-page ad in "The New Yorker." And there are $1.3 million in domestic travel expenses, some for private jets. CAI’s travel expenses activities are integral to our mission and operations.

In 2002, his board treasurer quit, resigned, along with the board president and two other board members and said, "You should stop giving money to Greg." The IRS tax return Central Asia Institute filed last year included a list of 141 schools that it claimed to have built or supported in Pakistan and Afghanistan. Over the past six months, CBS visited or looked into nearly 30 of them. Some were performing well, but roughly half were empty, built by somebody else, or not receiving support at all.

The Central Asia Institute's board of directors indicated that Greg worked for many years for little or no compensation, but is now paid a salary by the Institute as its Executive Director.