Friday, July 26, 2013

Failure of Background Checks Can Be Costly

by Gary Snyder

Nonprofit Imperative has monitored the failure of nonprofits to do background checks for more than a decade. The consequences have been horrendous- both financial and emotional.

Let's look at the latest breakdown of a board to exercise due diligence. 

Leslie Cohen Berlowitz has overseen the prestigious American Academy of Arts and Sciences honorary society for the past 17 years. She has been put on paid leave from the academy for more than a month while an outside law firm investigates numerous allegations. The charges have engulfed the organization and threatened to tarnish its reputation. Now the Massachusetts Attorney General is investigating also.

Apparently, she falsely claimed to have a doctorate from New York University and misstated her work history in federal grant applications. She also came under fire for berating staffers and receiving an oversized pay package — more than $598,000 in fiscal 2012 alone for an organization with only three dozen staffers. The attorney general’s office also asked whether the academy fully reported all her executive perks, such as first-class travel.

The board did not know of the discrepancies in her resume until the Boston Globe brought it to its attention.

Berlowitz has resigned and in her farewell letter to members stated “I always acted in good faith and with the best interests of the Academy at heart.” Under the terms of her resignation, the academy said Berlowitz will receive no severance, but will get a one-time $475,000 payment for retirement benefits, deferred compensation, and accrued vacation under her contract, something the office of Attorney General Martha Coakley pledged to investigate. Berlowitz will also receive supplemental health insurance for five years at a cost of no more than $3,500 a year. 

Under Berlowitz' tutelage the academy had accomplished a great deal, including improving the academy’s finances and diversifying the membership. 

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News,, 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, American Chronicle, 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, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter,, CORP! Magazine, Crain’s Michigan Nonprofit,, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner,, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today,, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization),, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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