Nonprofit Exposed In Cheating Employees

by Gary Snyder

A report exposed the employment practices of a Brooklyn nonprofit that failed to pay its mentally ill workers correctly for years.

It is alleged that it paid its janitors a third of the wages and benefits required by the state’s 'prevailing wage' law for janitorial jobs.  Shorefront Mental health board may have underpaid their employees by as much as $123,224 during 2013, a figure that is likely to rise after taking into account the lack of supplemental and other benefits to which workers were entitled

Shorefront was contracted until March 2014 to supply 26 janitors to work at several locations in Brooklyn and Staten Island as part of the part of the State Office of Mental Health’s (OMH) “Buy OMH” program, a statewide workplace initiative established to facilitate and improve the employability of New Yorkers with a psychiatric disability.

Shorefront management attempted to conceal their duplicity by falsifying the hours on the payrolls they were required to submit to the OMH. They continued to cheat employees out of the correct wage by paying them for fewer hours than they had actually completed, telling workers to submit blank time sheets that would supposedly be filled in accurately by management. The audit found that one worker who completed a total of 72 hours in January 2014 and should have been paid $2,201.04 received just $600.34. These inconsistencies were present throughout Shorefront’s payroll documents.

“This contractor unconscionably cheated disabled employees out of thousands of dollars.” New York state comptroller Tom DiNapoli said. “OMH needs to take immediate action to make sure contractors follow the law to protect all workers.”

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)

American Red Cross Again In Serious Trouble

by Gary Snyder

A lengthy joint report published this week by ProPublica and NPR finds that the Red Cross completely failed many of its rescue efforts during Hurricanes Isaac and Sandy in 2012.

ARC tried to cover up foul up after foul up. Some of the overt mistakes included allegations that 1) diverted (see internal report) 80 nearly empty trucks that should’ve contained food were told to drive around to “look like you're giving disaster relief” so that the agency would impress Red Cross “brass” in the area; 2) the caterer couldn’t produce lunches and dinners so Red Cross volunteers had to distribute cold leftovers; 3) used an emergency response vehicle and staff for a photo-op for 5 hours; 4) shelters were not properly staffed, materials and food resources; 5) more

Two weeks after Sandy hit, Red Cross Chief Executive Gail McGovern declared that the group’s relief efforts had been “near flawless.” The group’s self-assessments, drawn together just weeks later, were far less congratulatory.

  

The charity, nevertheless, ultimately raised $312 million to help Sandy victims. (ProPublica has raised questions about the opacity of Red Cross disclosures on how this money was spent.)

There is a long a rich history of poor leadership, misappropriations, political intervention and questionable representation of the operations of the organization. 

Although blood-compliance problems are seldom in the forefront for the public, decades of Red Cross problems include unsuccessful attempts to improve its blood-collection program to meet government safety standards. After a Federal Drug Administration Consent Decree the agency, ARC continues to be cited by the U.S. Federal Drug Administration for failure to take precautions to assure the safety of the blood donations. This failure has resulted in huge fines amounting in tens of millions of dollars. In 2010 alone, federal health regulators fined the American Red Cross $16 million for sloppy screening of donated blood.

There are several reasons for years of lax governmental oversight by Congress. The Red Cross was created under a special Congressional charter. The President of the United States, who is honorary president of the organization, appoints eight members of its board of governors. This relationship has caused significant problems in several of the Red Cross administrations. The American Red Cross was essentially pardoned from its misdeeds. In the past, it was bailed out with a $100 million no-strings attached tax-payer funded bonus to cover a shortfall.

Leadership has been a serious problem. The current president is the seventh CEO in as many years, counting the interim heads.

The boards and administrations have taken so little action about the problems that the American National Red Cross Modernization Act of 2007 (Pub. Law 110-26), a bill to strengthen the governance structure of the American Red Cross, was signed into law to provide to provide the first major overhaul of the organization since its 1947 congressional charter.

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)

No One Was Paying Attention To The Sex, Big Embezzlement at University

by Gary Snyder

For over thirteen years Scott Eaton the athletic director at Northern Kentucky University was having affairs with his many girlfriends. 

All the while he was embezzling about $311,000 from the school and using the money to give the girlfriends cash and buy them gifts.

Eaton, a husband and a father, gave one of his five NKU girlfriends $2,500 a month in university funds for two years but he stopped when the woman's husband contacted him.

He paid one lover's tuition during their 13-year "on and off" affair, mailed Christmas gifts to her last year and sent her e-mails early this year telling her he still loved her, the woman told a criminal investigator working the case.

Eaton's mistresses included at least four university employees and one student. 

Eaton told investigators he started that affair in 2000 and two more in 2008. He also said he had affairs in 1998  - the year he was hired at NKU - and 2002.

She said she had been having a sexual relationship with Eaton since 2000. She said she was aware he was married but not that he was having relationships with other women.

  

He pleaded guilty last April. He was fired in March 2013. Eaton's long trail of theft, deceit and betrayal landed him a 10-year prison sentence. 

To NKU's fault, no one was paying attention to how he spent the university's and taxpayers' money. Eaton realized the university was not keeping track of his spending. 

Eaton began buying Kroger gift cards with his university credit card and using them to buy other store gift cards to make purchases. Sometimes he bought items and returned them for cash.

Over the next six-plus years, Eaton used his NKU credit card 183 times to buy Kroger gift cards for his personal use. He started buying them in amounts of $2,125, then raised that to $3,135. By mid-2008, maybe because he started to worry about getting caught, he started spending less on cards - $1,440 was a favorite amount – but bought them more often.

By mid-2009, he was back up to $1,800. By 2011, it was $2,700, then $3,600.

He was still buying them in amounts of $3,600 when he got caught in early 2013.

Eaton had bought $262,106 in Kroger gift cards for his personal use, according to an NKU audit. 

The audit tracked his illegal spending to a dozen retailers. All told, Eaton spent more than $26,000 at Barnes and Noble and more than $8,000 at Kohl's and Best Buy.

NKU President Geoffrey Mearns said the school has tightened its accounting and reduced the number of workers who carry a university credit card.

After getting out of prison, he is required to begin paying back the $311,215 he stole. (article)

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)

Study: Huge Increase In Charitable Giving Among Wealthy

by Gary Snyder

Among wealthy households, the average amount given to charity last year increased 28 percent, according to the 2014 U.S. Trust® Study of High Net Worth Philanthropy. Through an ongoing partnership with the Indiana University Lilly Family School of Philanthropy, the fifth in this series of biennial studies reveals a strong commitment to charitable causes among high net worth households. This positive trend is seen in several findings, including:

•       Last year, virtually all (98.4 percent) high net worth households donated to charity, compared to 95.4 percent in 2011. This marks the highest rate of high net worth participation in charitable giving since the study began in 2006. This high rate of giving among the wealthy compares with 65 percent of the U.S. general population who donate to charity.
•      The average dollar amount given to charity by wealthy donors increased 28 percent, from $53,519 in 2011 to $68,580 in 2013. Average giving as a percentage of household income decreased by one percentage point, as increases in income levels slightly outpaced increases in giving levels among this demographic.
•        Eighty-five percent of wealthy donors plan to give as much (50 percent) or more (35 percent) in the next three to five years (through 2018) than they have in the past – up from 76 percent who said they planned to give as much (52 percent) or more (24 percent) when asked in 2012. The top reasons cited by those who plan to increase their giving are “increased financial capacity” (85 percent) and the “perceived need of the nonprofits or causes” they support (48 percent). (article: HERE)

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)