Friday, February 14, 2014

February Edition-Nonprofit Imperative E-Newsletter


Nonprofit Imperative
Your nonprofit browser
February 2014
The twice-monthly newsletter dedicated to:
  • exposing the crisis in nonprofit fraud leadership…a crisis of pervasive and monumental waste, fraud, abuse, mismanagement, and malfeasance throughout the charitable sector which costs taxpayers and contributors tens of billions of dollars annually; and,
  • seeking reforms that will restore the public’s lost confidence in the sector.
What’s Included:
Skunk of the Month:
Archdiocese of St. Paul and Minneapolis
Charity Check Up:
CA Charity Telemarketers
A Thought or Two:
Say No 2 Cancer, et al
Nonprofit News-In Case You Missed It:
National Museum of Industrial History: Girl Scouts of LA…more
Political/Official Chicanery:
MS; CA; VT; NY; CT; MT; PA; MI…more
So, What Do You Think?


Meadville Tribune: Charities are easy marks for theft. “It is all too common for thieves… to get away with it.” Pennsylvania lawmakers are poised to increase the sentences for those that are convicted for stealing from charities and local governments… and will automatically tack on five years to the standard sentence for theft.
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"For us charity fraud is particularly pernicious. Whether it is a cancer charity — which I think is really bad — or almost any charity, there are two victims in every charitable scam... "There is the donor who thinks they are giving money to a legitimate charity and are going to help somebody. But it also dilutes money that otherwise would be available for legitimate charities. And in some ways, that is almost worse." said Colorado deputy attorney general Jan Zavislan
 Skunk of the Month…
Skunk of the Month is the twice-monthly 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:
“They came to do good and they did very well indeed.”
Archdiocese Spent $11million To Keep Secrets
The Rev. Stanley Kozlak served nearly three decades in the Archdiocese of St. Paul and Minneapolis. But then he fathered a child and the archdiocese needed him gone. Removing Kozlak quietly wouldn't be cheap, but church leaders knew how to move money discreetly. The archdiocese held two secret accounts, controlled by the archbishop, designed to make problems like Kozlak disappear. It cost over $11 million.
The efforts left the Archdiocese subject to embezzlement. The former head of accounting is accused of stealing more than $670,000 from the Archdiocese of St Paul and Minneapolis. He has pleaded guilty to theft and filing a false tax return. The perpetrator pleaded guilty to five felony counts of fraud. He is now serving a three-year prison sentence.
About 3 percent of overall archdiocese revenues in those years went for costs tied to clergy misconduct. The archdiocese is facing a slew of lawsuits over clergy misconduct that threatens to cripple it financially. The clergy misconduct budget was so well concealed that a trained eye wouldn't notice the spending.
Payments associated with clergy misconduct came from separate, secret accounts, depending on the type of behavior involved. One such account, numbered 1-515, paid costs connected to priests accused of sexually abusing children. Account 1-516, meanwhile, paid costs related to the abuse of adults, or to financial misconduct. Items with these codes included expenses for therapy costs for victims and priests.
Meanwhile, Charles Zech, director of Villanova University's Center for Church Management and Business Ethics did a study that concluded 85 percent of American dioceses had funds stolen between 2001 and 2006. (source)
A Charity Check Up:
In CA: Fundraisers Take Two-thirds Of Collections
Commercial fundraisers – the for-profit companies behind the vast majority of those telemarketing appeals for charity donations – raised almost $300 million on behalf of nonprofits in California in 2012, according to figures collected by the state Attorney General.
The nonprofits got just a fraction of the booty – an average of only 37 percent, or $108 million -- and the commercial fundraisers kept the rest for themselves. That's a steep dive from the year before, when nonprofits got more than half the take.
A Thought or Two:
More Deceit From Cancer Charity Fraudster
A man who is accused of using bogus cancer charities, including Say No 2 Cancer and Boobies Rock!, to raise at least $2 million from June 2011 to June 2013 has been sentenced to 14 days in jail.
Denver District Court Judge Shelley Gilman ordered Adam Cole Shryock to report to jail after finding he violated court orders issued last summer prohibiting him from continuing to sell merchandise, collect money or promote events on behalf of any organization claiming to be a charity.
According to the Colorado Attorney General's office, Shryock tried evade a court-ordered asset freeze by asking that money raised in the schemes be sent directly to his home.
Shryock, the founder of Boobies Rock!, The Se7ven Group and Say No 2 Cancer, allegedly held promotions all over the country, mostly in bars, and hired promotional models to "take donations" on behalf of Boobies Rock, saying the company was raising money for breast-cancer nonprofit groups.
"In reality, the 'scholarship fund' was nothing more than a cash bonus for the promotional managers and the entire scheme ran afoul of the court's orders," Attorney General John Suthers said in a statement.
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Nonprofit News…
In Case You Missed It:
1.     Leaders of the National Association of College and University Business Officers and the Commonfund Institute, which collaborate on an annual survey of more than 800 North American colleges’ financial performance, credited last year’s robust growth in value by 11.7 percent to $448.6-billion in 2013 as a result of the healthy stock market for the endowment gains. University endowments collectively declined in value by 0.3 percent in 2012.
2.     The Tampa Bay Times, in partnership with The Center for Investigative Reporting, has built an online tool to make charity research a little easier. The "Charity Checker" website (tampabay.com/charitychecker), for the first time, aggregates the ratings and reviews of 11,000 already offered by several of the nation's most prominent watchdog organizations.
3.     Australia: The charity regulator, the ACNC, has investigated complaints against more than 200 Australian charities in its first year of operation. The ACNC’s first annual review said the majority of concerns raised about charities were governance, fraudulent or criminal activity, and private benefit. The public raised the majority of concerns, more were referred by other government agencies and the remainder came from other sources and active intelligence.
4.     Delawareans will be able to validate charities soliciting in the state before they donate under legislation that is moving through the General Assembly. The bill requires most non-profit and charitable organizations soliciting donations in Delaware to register with the Consumer Protection Unit and annually submit their IRS 990 tax forms as well undergo periodic financial audits, depending on the size of the organization. Additionally, the bill serves to provide oversight of professional fundraisers and solicitors and their associations with charitable organizations. The AG’s office will maintain a publicly available and searchable database so Delawareans can check to see if a charity is legitimate before donating. The database will also provide additional information about the organization’s charitable purpose and how the organization spends its donated funds.
5.     A former senior manager (property manager) for the Girl Scout Council of Greater Los Angeles has pleaded guilty to federal charges in an embezzlement scheme. Channing Smack of Marina del Rey had been the senior property manager for the regional scouting organization until he was accused of embezzling $370,000 through false invoices and other means.
6.     A Northampton County, Pennsylvania grand jury is calling on the state to review and possibly dissolve the nonprofit group behind the National Museum of Industrial History proposed for Bethlehem, saying it may be fatally plagued by negligence. The museum has spent $2.4 million alone on benefits and salary for CEO Stephen Donches since 2002, according to the grand jury report. By comparison, the nonprofit has spent somewhere between $2.5 million and $3 million on exterior renovations. The grand jury recommends Donches possesses no qualifications or experience needed to oversee the start up of a nonprofit, the report states. The Express-Times reported in 2010 the museum had spent $8 million on operating costs over a decade but still did not have a completed museum.
We flagged these few examples of nonprofit mischief 
1.     Hilltop Apostolic Church (CA) tens of thousands of dollars
2.     Little Scholars Inc (NJ) $200,000
3.     Blessed Sacrament Church $400,000
4.     Girl Scouts of San Gorgonio (CA) $5,000
5.     Readsboro Elementary School  (VT) $4000
6.     Lower Shore Enterprises Inc (DE) $70,000
7.     Arc of Ventura County (CA) $400,000
8.     Aid for Friends (ID) $200,000++
9.     Grace Chapel Church (NC) $200,000
10.  First Baptist Church (MS) $537,000
11.  Lion Education Foundation (CA) $200,000
12.  East Orange Revitalization and Development Corporation  (NJ) $380,000
13.  Harvest Management Group (OH) $588,121 
14.  Communications Workers of America Local 4202 (IL) $149,404
15.  United Transportation Union (NB) $103,000
16.  United Hebrew Cemetery on Staten Island (NY) $2 million+.
17.  Paul Burbank Elementary School (VA) thousands of dollars
18.  International Brotherhood of Boilermakers Local 374 (IN) $10,000
Political/public official chicanery (just a few):
1.   Authorities announced that a Mississippi Coast Coliseum & Convention Center employee was arrested on a charge of embezzlement of nearly $32,000 from ATMs owned by the state.
2.   An administrative services manager of the Mid-Peninsula Water District worker accused of stealing more than $200,000 to fund a gambling addiction pleaded no contest to embezzlement in return for no more than five years in prison.
3.   A Warren County (MS) Grand Jury has returned a three-count indictment against Warren County Circuit Clerk. She took about $661,751.75.
4.   An administrative law judge in Vermont has been accused of embezzling money from Montpelier's farmers markets, of which she was treasurer.
5.   Julissa Ferreras, the Queens representative who was named as chairwoman of Council’s Finance Committee, headed the board of directors of LIBRE, the Latino Initiative for Better Resources and Empowerment, when it was looted by then-Councilman Hiram Monserrate. She is the City Council’s new point person in overseeing the $50 billion municipal budget. As a Council member, Monserrate steered $300,000 in city funding to LIBRE and then diverted $109,000 of the money to pay people to work on his campaign for the state Senate. He later pleaded guilty to federal mail fraud and mail fraud conspiracy charges for the scam.
6.   A former Salisbury Fire Department Inc. treasurer who is a lifetime member was indicted on allegations that he misappropriated the nonprofit’s funds for his benefit during 2011 and 2012.
7.   The Los Angeles County district attorney's office has confirmed its prosecutors and criminal investigators are joining a City Hall effort to determine how two controversial Department of Water and Power nonprofits have spent more than $40 million in ratepayer money. The groups were created more than a decade ago to improve relations between labor and management after layoffs at the city-owned utility. The organizations — the Joint Training Institute and the Joint Safety Institute.
8.   The assistant Shelton (CT) finance director was caught stealing nearly $500,000 in city funds.
9.   The former treasurer of the Mayetta Rural Fire District No. 1 pleaded guilty Monday to embezzling from the district, U.S. Attorney Barry Grissom said. In his plea, the defendant agreed to an order that he pay $427,042 in restitution.
10.  A former manager of the Fort Yukon Native village corporation was charged this month with embezzling as much as $118,000 from the corporation in 2009.
11.  The Kent County (MI) Commissioner representing Northwest Grand Rapids is facing felony charges of embezzling and false pretenses in obtaining between $1,000 and $20,000 from a nonprofit or charitable organization.
12.  The former town clerk and treasurer of Luther has been charged with embezzlement after an audit showed she apparently had used nearly $48,000 of town funds for personal use.
13.  East Palo Alto (CA) City Councilmember Larry Moody failed to mention he might have a conflict of interest when the council awarded the money to New Creation Home Ministries and Able Works last November. The council has rescinded a $77,000 grant to the two local nonprofits because the councilmember didn’t abstain from approving it last fall, even though his wife worked for one of the organizations, reports the San Jose Mercury News. The newspaper reports that after rescinding the original grant, the council voted to give about $74,000 to Able Works and its two new nonprofit partners. This time, Moody abstained from the entire discussion after stating he had a conflict of interest 
14.  An indictment accuses the ex-director of Housing Montana in Billings (MT) of embezzling money from a rural development grant program and from homeowners in the program from about April 2008 until April 2010. The indictment did not specify a total amount embezzled but said it was more than $5,000.
15.  Former traffic Court Judge Robert Mulgrew wants his sentencing hearing postponed in a fraud case involving a South Philly nonprofit he helped run. His sentencing is in relation to his ripping off the nonprofit Friends of Dickinson Square of state grant money. He was vice president of the group. On the second day of his and his wife's trial in September, he pleaded guilty to one count each of mail fraud and of filing a false personal tax return in exchange for all charges being dropped against his wife.
16.  The former CEO of a Philadelphia charter school was sentenced to three years in prison for stealing funds from the school. Masai Skief pleaded guilty last year to embezzling $88,000 from the Harambee Institute of Science Technology Charter School and a related nonprofit, the Harambee Institute.
17.  Mississippi State Auditor Stacey Pickering reports Gail Williams, former Municipal Court clerk for the Town of Prentiss, has pled guilty to embezzling $89,620.27.
Tell us what you think and continue the tips (they are very helpful) gary.r.snyder@gmail.com
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 there is money missing. On rare occasions, there may be duplicates.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Charity Navigator, Washington Post, The Patriot-News, Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, msnbc.com, Marie Claire, Ethics World, Tactical Philanthropy, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, 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, 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, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, VPR News, National Enquirer,
  • Silence: The Impending Threat to the Charitable Sector (Xlibris, 2011)
  • Nonprofits: On the Brink (iUniverse, 2006)
  • The Michigan Nonprofit Management Manual, Governance Section
Our intent is to keep you informed.... You may be removed from our contact list and future mailings by emailing to garysnyder4@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com; 248/324-3700;
Gary Snyder is the author of Silence: The Impending Threat to the Charitable Sector (Xlibris, June, 2011) and 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)
© Gary R. Snyder, All Rights Reserved, 2014



























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, 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, 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, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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