Where Most Needed

Amanda Ballard has produced a very helpful study of the impact of educational debt on college graduates that shines a light on the crisis in staff compensation at charities.  This story, rarely noted or reported, in sharp contrast to the usual stories of executive excess.  The impact of insufficient resources on staff may prove to be the death of many small charities in coming years, an issue we have already explored and explored.   

Click to enlarge in pop up window.

One of the sharp insights of the study was a comparison of the percentage of recent graduates who earn at least $30,000 (in 2001).  For all industries, about two thirds of for-profit employers and a bit over half of nonprofit employers were able to pay at or above that level.  But the difference between nonprofits in health and education and other nonprofits was marked.  In health and education, three-fifths of the graduates were earning at least $30,000 right out of school, almost on a par with for-profit employers.  Only a third of the graduates in nonprofits other than health and education were earning more than $30,000 a year. 

What the study shows as well is the mounting debt burden of college students with shrinking grant programs and increased reliance on student loans. 

The obvious conclusion is that graduates are increasingly unable from a financial standpoint to seek employment in nonprofit organizations other than health and education.  How nonprofit organizations can continue to operate at a professional level under these conditions is an open question. 

Transparency International, a charity that advocates against government corruption, found itself at the top of the blogging charts on Thursday morning.  According to Deutsche Welle (not to mention a bazillion blogs), the agency had come down hard on a blogger who had posted about a friend's recent termination from that organization (during a new hire probation period).  Their lawyer demanded that posting be withdrawn, making threats of legal and financial consquences. 

The blogger duly deleted the original post and posted the lawyer's letter instead.  Soon the whole story of the termination and the heavy handed attempt at censorship was all over the blogosphere. 

I took a look at the organization's financial statements, which show that €4.6 million of the organizations €5.8 million income is from governments, and roughtly 10% of the government share is from USAID.  Looking at the Form 990 of the US chapter, Transparency International USA (EIN 54-1688204), we see first that the most recent posted return is from 2003.  In that return, the chapter reports a staff of 3 (line 90), with managing director Nancy Zucker Boswell earning $167,000.

This type of story is not unique.  Last year, the ACLU took it on the chin over document shredding.  The incongruity of organizations with a mission of transparency engaging in less-than-transparent behavior is always newsworthy.  But let's not call it ironic, ok?

In the continuation story, I have the text and a Google translation of the lawyer's letter, as reported in the blog. 

Another liberated Wall Street Journal article, this time in the Washington Post, tells us that Yale University is taking its money out of Christopher Hohn's hedge fund, known as TCI, but officially Children's Investment Fund Management LLP. 

Funds like these, which regularly engage in high-stakes financial deals that often involve taking huge positions in companies and then actively engaging in company management and governance issues, are one of the reasons why large university endowments are doing much better than smaller ones, a phenomenon we described back in February (University Endowments: Bigger is Much Better).  But at this point Yale has decided that it has made too large a commitment to these high-risk ventures. 

Other than the PR impact, the pull out of Yale's $500 million investment will have little effect on the $7.5 billion fund. 

As a side note, TCI makes a practice of donating a (very small) percentage of its profits to a charity foundation, the Childrens Investment Fund Foundation, which is run by Jamie Cooper-Hohn, Christopher Hohn's wife. 

One myth of charitable organizations is that they reflect community vision and civil society.  One type of organization that smashes the myth are wildlife rescue charities.  They are typically very small, not "organizations" in any sense of the word—often one person pursuing her own vision. 

For some reason the Virginia Pilot in the Tidewater Virginia area offers us this week two stories about wildlife rescue organizations.  One takes us in into the life of Lisa Barlow, who has rescued birds for 30 years.  The article describes her as one of the 41 licensed wildlife rehabilitators in Virginia Beach.  She describes her work as a way of life, with a cell phone that rings constantly.  Sarah Kesler, another rehabilitator, likens it to an addiction. 

Only recently did neighbors complain about the noise and smells, prompting the city to require a privacy fence and daily cage cleanings.  Ms. Barlow is looking to move to the country.  However, the work provides no compensation.  There is no Form 990 for her organization, Wildlife Response (EIN 54-1641798) because it doesn't reach the $25,000 level needed for filing. 

The other article takes us to a start up, by Evelyn Flengase.  This one tells us that Virginia issues about 325 permits annually.  Like Ms. Barlow, the owner of Evelyn's Wildlife Refuge (EIN 65-1255243)  spends a lot of her own money and doesn't have a social life.  The organization doesn't have a Form 990 because it is too new, but may not reach the $25,000 level either. 

Nonprofit purists will fault me for calling Evelyn Flengase the owner of this nonprofit, but there is no better way to describe this purely personal project.  Ed Steinkoenig of the Virginia Department of Game and Inland Fisheries described the state's attitude toward wildlife rehabbing: "It's a perceived need—by them." 

The article describes "the big one" as the Wildlife Center of Virginia (EIN 54-1215402).  With income approaching $2 million, this certainly qualifies as a mega-rehabber. 

Articles about these organizations appear regularly.  Last week's Baltimore Sun quoted Gerta Deterer of Baltimore's Wildlife Rescue (EIN 52-1885291 - look for it under its former name "Wild Bird Rescue").  A Guidestar search turns up 75 organizations with some variation on "wildlife rescue" and four organizations with that exact name around the country. 

Another current story from a columnist at the Sarasota Herald-Tribune presents a story of a wildlife rescuer undergoing cancer treatment.  As a side note, her organization, Wildlife Rescue Service of Florida (EIN 65-0023424), has no current Form 990 on file, but its 2000 Form 990 is the first blank Form 990 that I have encountered on Guidestar.    

A fascinating contrast.  The Washington Post and New York Times keep flogging the story of three Red Cross volunteers (out of 225,000) dismissed for allegedly diverting food and misusing funds.  The Louisiana attorney general is now expressing interest. 

But what gets the attention of the New Orleans Times Picayune is the announcement that the Humane Society of the United States is also under investigation by AG Charles Foti.  The bulk of their story reports the details of the pet rescue effort. 

[But the Tuesday morning front page story in New Orleans features a protest at a local Catholic church against a parish closure - Click on the image for a pop up.]

Humane Society chief executive Wayne Pacelle is quoted in the Post saying simply, "I can't for the life of me see any issue here."  But to the Times Picayune, he explains that the HSUS operated under guidelines set forth by the Louisiana Department of Agriculture about pet sheltering and reunification. 

Agriculture Commissioner Bob Odum confirmed that 7,000 to 8,000 animals were processed by the Gonzales Lamar Dixon Center.  HSUS even requested that animal shelters nationwide hold animals for reunification until at least December 15, far beyond usual guidelines for most shelters, to give owners more time to reunite with their pets.   Eventually, it was in the best interest of the animals to find them homes rather than continue to hold them in kennels. 

Over 260 people have written letters in support of Jack Abramoff in advance of his sentencing on Wednesday on corruption chartes.  As the New York Times characterized the defense:  "while acknowledging that he defrauded Indian tribes and other clients of millions of dollars, [Abramoff] deserved leniency because so much of his money had been given to charity."

The Governor of the Marianas wrote a glowing letter.  As the AP article in the Washington Post points out, "The Marianas, famous for their low-paying garment factories, hired Abramoff to keep the islands' workers exempt from U.S. laws like the minimum wage." 

The Post article goes on to note that only one member of Congress contributed a support letter.  Dana Rohrabacher (R-California) wrote: "Jack was a selfless patriot for most of the time I knew him."

Yet there's no denying that charity is a powerful force that puts a human face on cases of white collar crime.  We'll see tomorrow what impact it has on the sentence.

Often when you think of charities you think of organizations like American Red Cross or homeless shelters.  Yet In the vast world of nonprofit organizations, there are entire industries that most people are unaware of.  One of these is the $330 million industry of "quality improvement organizations," created by Congress to provide quality control and investigate complaints about health care.  Every state has its QIO, and most of them are organized as nonprofits. 

A few weeks ago, Sen. Charles Grassley has sent one of his letters to Mark McClellan, Administrator of the Centers for Medicare and Medicaid Services, complaining about some specific abuses in compensation and spending by the QIOs but also citing a report in the Journal of the American Medical Association that questioned whether QIOs were having any effect on health care quality.  The comments were duly noted by the Washington Post.

One impetus for this questioning were an earlier series of reports by Gilbert M. Gaul in the Washington Post last summer: "Bad Practices Net Hospitals More Money," "Accreditors Blamed for Overlooking Problems," and "Once Health Regulators, Now Partners."  The third article described how QIOs can make it difficult for patients to get access to medical records showing poor care, yet the QIOs themselves rarely punish doctors.  In addition, the Post provided this chart showing the compensation of the executives of these organizations, with a good number in the $200,000+ range and one topping $500,000. 

Now there is a book coming out from the Institute of Health, Medicare's Quality Improvement Organization Program:  Maximizing Potential (2006).  It can be read online for free, or the executive summary can be downloaded here. 

The problems with QIOs are very similar to those of other charity organizations: difficulty measuring impact, high executive compensation, conflict of interest, and extremely slow pace of reform efforts. 

And we saw earlier that these organizations also have the sense of entitlement of many charities, when we reported on the QIO chief that complained about getting billed for unauthorized use of his organization's 800 number, after AT&T had warned several times that the organization needed to improve its quality control. 

The University of Delaware publicly un-hired Kevin Willard of Louisville as their men's basketball coach last week.  Sometime after the offer was made and accepted, board of trustee members complained about Willard's DUI arrest in early 2004.  Delaware president David Roselle and athletic director Edgar Johnson had second thoughts and rescinded the offer.  However, Willard had brought up the conviction himself in his job interviews, which, in any event, was widely reported at the time. 

Needless to say, this particularly public example of trustee second-guessing led to some scathing commentary, comparing some particularly egregious examples of bad coach behavior with the apparent atonement of Mr. Willard.  The other is critical of the background search that apparently failed to turn up the bad news. 

We could contrast the trustees hyperactivity in vetting basketball coaches with our recent stories about trustee superficial attention to long-term strategy at University of Kentucky and budgeting at Case Western Reserve. 

This little trilogy shows that times are getting tough for trustees.  They are actually exptected to make sure organizations make the right decision on the big stuff—and leave the little stuff alone.

It must be true, it's on the BBC!  For a charity jukebox fundraiser (for Katrina, naturally), cable channel VH1 Classic will play Nena's anti-war one-hit wonder "99 Red Balloons" and its German version "99 Luftballons" for an hour.  The Washington Post agrees.  Not April Fool yet.  (Or, this is not a test.)

What allowed it to happen was setting $35,000 as the pledge amount needed to program an hour.  Too low.  Let's just hope that VH1 requires that the pledge actually be paid before airing.

The calculation of 10,098 red balloons is based on 17 plays of a 3.5 minute video that mentions "99 red balloons" six times (the German version mentions "99 Luftbalons" eight times).  Does not include additional times played in your head.  Actual performance is not guaranteed. 

Denk' an dich und lass' ihn fliegen.

It is not clear how or why allegations of fraud and mismanagement by the American Red Cross in the wake of Katrina are just now (Friday) appearing in the New York Times and Washington Post.  Coincidentally, Sen. Charles Grassley (R-Iowa) just returned from a trip to Brazil (Press release: "Wow, what a visit we had today.") 

On Saturday, the Times is reporting a "major shake-up" involving the dismissal of two "key supervisors." One is reportedly Patrick Keena, the volunteer in charge of food and shelter operations in New Orleans, where food distribution continues in areas without utilities.  The other is reportedly Jill Paul, said to have been ordering many more meals than needed in one area.  Curiously, there is no mention of this "major shake-up" in the New Orleans Times Picayune.

It appears that the allegations in the current report are the ones alluded to in Sen. Grassley's February 27 letter to the ARC.  As the Post put it, there are "more than a dozen" allegations, while the Times says the volunteers estimate the amounts in the  "millions of dollars."   For perspective:

• The Post acknowledges that the Red Cross had 235,000 volunteers after Katrina, six times the previous peak of 40,000.  So even dozens of volunteer complaints could not fairly be described as representing "widespread" problems.
• The total amount distributed was $2 billion, so even a tenth of one percent lost to fraud & abuse would amount to "millions of dollars." 
  

And remember we are talking about hurricane Katrina, where even police were turning in their badges and walking off their jobs. 

The emphasis on whistleblowers seems sadly misplaced.  In February, the Red Cross announced an independent audit of its governance procedures, expected to report in June.  And a couple of weeks ago, an editorial in the Washington Post cautioned that it is not fair to compare the Red Cross to other charities "given the incomparably larger scale of Red Cross activities."  For an organization of this scale, depending on volunteer whistleblowers is no way to run a railroad.  Oversight itself has to be systematic, not ad hoc as Sen. Grassley would have it. 

What the Red Cross needs to do is not at all clear.  This recent Washington Post story on the interim leadership team shows them addressing everything from payment systems to improved logistics to parterning with faith-based groups.  Oh, and improving diversity of volunteers.  And finding ways to fund operations in less-weathly states.  And restructuring the blood distribution system.  And fixing the board and governance system.  And yet, the article quotes Peter Dobkin Hall saying, "they're not willing to do the work." 

Sen. Grassley again issues a press release indicating that he will meet with the Red Cross chair next week.  It's about time. 

Government agencies can sometimes be real sticklers about how their money is spent.  In New York, attorney general Eliot Spitzer announced a settlement of nearly $3 million with the Long Island Head Injury Association.  The agency was cited in audits for lacking documentation of services and for using unqualified staff to create service plans and provide rehabilitation & training.  (Extra: if you have a hankering to read the press release in Russian, it's here.)

The story in Newsday added that the violations went as far back as 2000.  As is common with stories of multi-million dollar violations, the large amounts result from the many years that pass before the oversight authorities manage to identify and correct the situation.  In this case, the organization's management has also left and new compliance training has been instituted.

Can they pay it?  A glance at the Form 990 of LIHIA shows an organization with a little over $10 million in revenue.  In addition to its government contracts, it looks as though the chief fund raising activities are special events, such as golf tournaments, that raise about $2 million a year.  However, the organization does own a number of residences which probably could be used in some way to generate the cash to pay the money back.

Overall, it appears that the organization wasn't up to anything but sloppy management.  The executive director took home about $180,000 a year, which is on the modest side for an organization this size in New York.  So why the headline treatment for this particular instance of Medicaid "fraud and abuse"?

Perhaps coincidently, a web site called Kaisernetwork.org reported last month on hearings held by New York legislators on ways to combat the estimated $4.4 billion in fraud and abuse in the state's Medicaid system.  Favorable mention was made of a Texas program to create a special office to handle these cases, resulting in about $800 million in recoveries.  All of the legislators quoted in the article are Republicans, and of course Mr. Spitzer is front runner for the Democratic nomination for governor. 

USA Today got around to reporting on fall out from the Lawrence Summers resignation (last month) at other college campuses.  Their angle, "Are Campuses Becoming Battlegrounds?" pits business savvy university presidents against more academically inclined faculties.  But WMN draws a different conclusion from the profile of University of Kentucky president Lee Todd. 

Mr. Todd has a plan strikingly similar to the one advocated by Case president Edward Hundert (yesterday): aggressive growth in faculty, lots of government grants, not much of a plan reported about how to fund this growth.  And trustee concurrence.  A trustee is quoted (one of the 75% of the U of K trustees with a business background) about wanting to leverage campus innovations into something like Google. 

Google had its origins at Stanford, one of the five richest universities in the country. 

Other voices quoted in the article sound more cautious about so many universities pursuing biotech.  It may be a case of too many businessmen-trustees having the same idea at the same time. 

The contrasting success story comes from Tufts University, which snagged a $100 million gift from eBay co-founder Pierre Omidyar to start a program to support microfinance, a field that is one of the clearly successful nonprofit innovations in recent memory.  The program includes a fund, half of which will invest in microfinance projects for an investment return and the other half will support scholarships and faculty like a typical endowment.  And an independent supporting organization with its own board of trustees will provide direction & oversight.  It appears that Tufts president Lawrence S. Bacow has found a formula for a successful marriage of business and academe—not with biotech but with a self-sustaining charity project. 

As we have said, the way to marry rich is to get involved in charity—but it can't be a run of the mill charity. 

The resignation of Edward Hundert of Case Western Reserve University last week offers some unusual circumstances for a large university that contrasts with the resignation of Lawrence Summers at Harvard (we discussed here).

As with Summers, a faculty vote of no confidence was a preciptating factor, but, as reported by the Chronicle of Higher Education, the surprising element was that the faculty vote was based on hard numbers, not complaints about style.   

At the heart of the financial difficulties is Dr. Hundert's "Vision Investment Plan" launched in 2002 to invest $181-million in new programs.  The board of trustees approved the plan for a five-year deficit and other high-risk income projections:  large increases in unrestricted private donations and federal grants.  In particular, fund raising was projected to increase 20 per cent yearly. 

Aggressive plans like this need to have perfect execution to succeed, yet staffing plans went awry.  The initial success was patching up a dispute with Peter B. Lewis, the philanthropist who stopped giving money to all Cleveland institutions complaining about their poor governance.  Dr. Hundert also hired Derek Bellin, formerly at Columbia University, as development director.  However, he lost Mr. Bellin by later attempting to reorganize the development department.  Thereafter, he tried to do development work himself, which slowed efforts. 

This year, the board of trustees noted the failure of fund raising projections and voted to impose serious budget cuts.  The fall out led to the faculty vote and Dr. Hundert's resignation.

As is frequently the case, the terms of Dr. Hundert's severance are confidential, and he is a tenured professor at Case.  It will be interesting to see whether the details eventually emerge. 

Similar to the situation at Harvard, this appears to be a failure of the "strong executive" style of governance.  The trustees trusted too much and monitored progress too little, it appears.

A report in the Sacramento Business Journal boldly addresses one of the many forces driving the huge increase in charity numbers (about 80,000 new charities a year, as WMN reported here).  These are small charities with a specific disease focus founded after someone loses a loved one. 

Unfortunately, reporter Kelly Johnson doens't turn up much in the way of firm statistics "In California, the number of nonprofits dedicated to patient and family support and the prevention and treatment of a variety of diseases grew 46.2 percent from 782 in 1999 to 1,143 in 2004," says the report, attibuting it to Kevin Rafter, research associate at the University of San Francisco Institute for Nonprofit Organization Management.  But it isn't clear where the source of these numbers is. 

The California AG has a charities search page, with search provided by Guidestar, but it proves nearly useless for answering a question like this one.  I tried a search for organizations related to diseases & disease research in Sacramento and turned up 41 organizations, including Little League Baseball, Inc., National Wine Expositions Foundation, Sacramento Braille Transcribers, and Global Zion Mission.  Broader searches produce a message "If you are interested in purchasing a data set of the entire list of organizations found, please click here." 

The article offers a few suggestions about alternatives to starting a charity, such as working with an existing community foundation.  But overall, we aren't really offered an answer to the question of whether charities started out of grief are many or few, or whether they are succeeding or failing.  We need more understanding of what all these startup organizations are up to, and the reporter is on to something.  But the research tools need work.

The Washington Post reported recently on the popularity of short term volunteer visits to New Orleans and other areas hit by Katrina and Rita.  The attraction of charity work by day, New Orleans partying by night is proving attractive to adults and to students looking for a spring break adventure.  The Post mentions some of the downsides, such as coordination of volunteers with real needs. 

Yet the real positive result of this combination of partying and volunteering may be to provide a reasonably attractive spring break alternative that avoids the health-endangering excesses of spring break cited in a recent survey by the American Medical Association. 

There have been spring break alternatives available for some time.  However, groups that sponsor alternatives are not very large. One group, Break Away, itself reports participation by 7,000 in 100 local chapters.  In a Wall Street Journal article (reported also here) Jill Piacitelli of Break Away reports that spring break alternative participation nationwide has grown to 35,000, an increase of 15% over last year.  But compare this to the estimated 170,000 going to Cancun alone. 

Habitat for Humanity has offered its Global Village volunteer trips for some time.  Though most of these opportunities are overseas, expect to see more in the way of domestic programs, not only for spring break, but for baby boomer trips as well. 

The current trend in voluntourism seems to be shorter and shorter time commitments.  Guardian UK labels the trend "Saving the World in a Weekend."  Charities participate not so much for the volunteer help accomplished (which can be minimal for an untrained volunteer), but in hopes that some will make longer commitments later. 

Back in January we reported on the Indiana foundation whose President over the course of a decade eliminated staff and packed to board with his friends, then bought a large house at a Las Vegas country club with the foundation's assets and moved the corporation to Nevada. 

Today's Ft. Wayne Journal Gazette brings us up to date on the foundation's continuing story.  The most unexpected development was the death on February 8 of Richard H. Blaich, the former president of the board who had resigned on January 6 of this year.  He was found in his garage dead of carbon monoxide poisoning. 

Despite the appearance of suicide, the coroner ruled the death accidental, concluding from evidence at the scene that Mr. Blaich had probably suffered a fainting spell while trying to fix a tire.  The garage door was closed because it was 17 degrees outside.   The death prompted a letter to the editor ("My Friend: Richard Blaich") that suggested that in fact Mr. Blaich was suffering from a rare form of cancer related to exposure to Agent Orange and had only a limited time to live.

Programs once supported by the Schwab Foundation are unsure what the future will bring.  One organization that once received $90,000 per year had been cut back to $25,000 for the current school year, but then increased to $40,000 shortly before the first story about the foundation hit the papers.  Yet with the many lawsuits still entangling the foundation, there is doubt whether next year they will see anything.

It also came to light that the other directors of the foundation had been receiving compensation; Jon Garver received $20,000 and John Dortch $5,000 in the year ended June, 2005.  The surviving former directors are being sued by Attorney General Steve Carter.  They are both seeking to have their defence costs paid by the foundation's directors and officers liability insurance policy. 

The foundation may come out of receivership soon, to be under the control of an interim board, who is working without pay. 

The process for returning the foundation from Nevada to Indiana has not yet been worked out. 

A striking example of the misuse of charities that ostensibly help people.  A Government Accounting Office  report calls attention to the adverse impact of homebuilder-funded charities that give home buyers help with their down payments.  The result, says the GAO, has been higher home prices and more loan defaults that leave the government-sponsored FHA holding the bag.  The charities have in effect given homebuilders and sellers a back door key to Federal treasury. 

Curiously, it is the  Columbus Dispatch that seems most interested in the report and the practice.  (With a follow-up story here.)  The Seattle Post-Intelligencer has also provided some coverage.  All of them note that conventional mortgage lenders do not allow sellers to provide down payments, as it allows for buyers who don't have any stake in home purchases.  Only FHA allows an exception for charity support for down payments, and then they went a step further to allow sellers to fund the charities.  Enter the abuse. 

These charities are not small.  AmeriDream reports $97 million in income, Nehemiah Corporation of America $143 million, and The Buyers Fund $167 million.  All of these organizations follow the buyer-funded model, and the bulk of their income appears as fees rather than contributions.  Family Housing Resources a non-seller funded organization mentioned in the GAO report is much smaller.

While the GAO report is recent, the problem is not that new, and this story from Bankrate.Com describes some of the history of the practice and previous efforts, thwarted by the industry, to control or end the practice. 

The story seems simple:  Oxfam has suspended some operations around Banda Aceh after it found financial irregularities.  But there are some interesting differences between the reports that appeared in the New York Times (Stephanie Strom) and the Jakarta Post (Nani Afrida).   Both stories agreed that the amounts in question were in the tens of thousands, which was not great compared to the project's $48 million budget (NYT) or $30 million budget (JP). 

In New York, the spokeswoman goes nameless.  In Jakarta, Oxfam national media officer Yon Thayrun appears to have something of a profile in development reporting.

In New York, Oxfam makes it clear that the suspension only affects home construction, not water and sanitaion projects.  But in Jakarta, we learn that in the Aceh Besar region, Oxfam had already built 379 homes in 2005 and plans 374 for this year.  Work remains unaffected in the other Oxfam offices in Sigli, Meulaboh, Calang, Nias, Lhokseumawe and Lamno.

But the most intriguing omission in the New York story provides an insight into the way development relief is managed on the ground.  The Jakarta story notes that the Oxfam staff of 140 includes just 8 expatriates, and the staff continues to be paid even though they were asked not to come to work. 

A new study offers data that shows that the rate of growth in the number of very large charities is between two and three times greater than that of small charities.  It also suggests that the huge number of small charities will have a particularly difficult time finding leaders over the coming years. 

These conclusions are not in the Executive Summary, but the key data appears very early in the main Bridgespan Group report report "The Nonprofit Sector’s Leadership Deficit." Taken from IRS data available via the National Center for Charitable Statistics, the table shows a census of groups by size in 1994 and 2004 and calculates the compound growth rate of each size class.

The report web page is here with links to the report, executive summary, commentaries, and an Excel spreadsheet with the model used in the report.  Note that the groups selected for this study were U.S. charities (that is, 501(c)(3) organizations) with revenues greater than $250,000, excluding hospitals and institutions of higher education. 

From smallest to largest groups, the compound growth rate increases.  The number of groups under $1 million grew at a compound rate of 5.4%, while the number of groups of $100 million or more grew at a compound rate of 13.0%.  At 13%, the number of organizations doubles in just 7 years, while at 5.4% it takes 15 years for the number to double. 

Even more striking are the main conclusions of the study relating to executive development.  The table shows that the need for executives will be highest among smaller groups.  In 2004, 86% of the groups—over 90,000 in all—had revenues of $5 million or less, while there were well under 1,000 groups over $100 million.  The chart shows clearly the dramatic drop off in number of organizations above $5 million in revenue.

Yet, as readers of WMN know, the relatively small number of large organizations account for a large part of the overall activity of the sector (See "IRS Data Shows Largest Nonprofits Have Biggest Economic Impact".)

Few in number, rich in resources—the large charities are not going to have great difficulty finding leaders.  It is the smaller groups that will bear the brunt of the demographic deficit as the baby boomers retire. 

The Bridgespan Group concludes by recommending more investment in leadership capacity, offering better rewards to managers, and recruiting more widely.  WMN offers some alternative conclusions: 

• boards of organizations with revenues under $5 million need to move deliberately and aggressively toward mergers that will create organizations of a sustainable size, with resources sufficient to attract scarce talent at the level of the top management team
• executive "transition" involving an outside hire is, in general, not a reasonable expectation for organizations under $5 million, and it becomes less reasonable the further the organization falls below that line and the longer it waits.

You don't work for IRS for the attaboys.  After 9/11, the IRS was criticized for not expediting applications for new charities, so it quickly instituted an expedited process.  After Katrina, the IRS quickly initiated an expedited application process again—and now Stephanie Strom in the New York Times is reporting more criticism from groups like the BBB Wise Giving Alliance, which we talked about recently.

Some 400 organizations have been given the expedited treatment.  For perspective, this represents one-half of one percent of the 80,000 applications for 501(c)(3) charitable status that the IRS receives every year of late. (Here is a spreadsheet from the IRS that shows how many applications were received, approved, denied, and withdrawn in 2004.) 

The fact that some of these charities are struggling is hard to evaluate without a baseline:  how well did the other 79,600 do in their first year?  Back in October, the Chronicle of Philanthropy reported (in a free article) that 51 of the 342 groups approved after 9/11 never filed a Form 990.  However, a look at the statistics from the National Center for Charitable Statistics shows that less than a third of all organizations started after 2000 had filed a Form 990 by 2003—making the 85% success rate of the 9/11 groups look rather remarkable. 

The Times reporter has a field day with some of the exotic charities, like one distributing underwear and another collecting leather fetish items.  But again, without looking at the thousands of other charities the IRS approves, we have no way of knowing whether this out of the ordinary or not. 

Just days after a report on the millions still rolling into spin offs from the Mitch Gold telemarking scams, the Attorney General of Hawaii Mark J. Bennett is bragging about shutting down a solicitor who kept $76,000 out of $95,000 collected from donors. 

From the AG's web site, it look as though he just took over the registration of charity fund raising solicitors last year. 

Many states have such regulations that require registration of all companies who provide marketing services for charities—not just telemarketers, but special events, direct mail, and every other form of fund raising support.  The companies are often required to do extensive reporting on every fund raising contract.  Generally, the effect of these laws is to create a hugh amount of paperwork and a small office to process it, and very little in the way of prosecution of the handful of bad operators. 

Sure enough there is a report on the AG's website for contracts through June 30, 2006 (apparently this is a live document—either that or the AG has more powers than we know about).  On page one, we see that a company called "Contract Communications, Inc." raised $1,956,079 and passed on $391,216—exactly 20%—to a charity called "Cancer Recovery Foundation of America."

Just to show how this works, "Cancer Recovery Foundation of America" actually enjoys a One-Star rating from Charity Navigator (EIN: 33-0418563, Form 990 here).  It gets zero stars for efficiency (46% goes to program expenses—but please read on), but it gets four stars for "capacity," because its income and expenses have grown rapidly over the last four years.  In the Charity Navigator system, the two ratings are combined to give it a one-star rating overall.

But let's go a little further: if you look at the Form 990, page two, you will see that the organization has identified $1,450,627 in "Professional Fundraising Fees" as a "Program Expense."  No way. 

Then on page one, line 1d you see that $1,387,424 is noncash (in-kind) donations, which when distributed would also be included in program expense.  Back on page 14, we see expenses for "program materials and in-kind" ($456,982) and "gift baskets" ($407,351).  If we take these as the in-kind expenses, we are left with a mere $720,566 in cash program expense. 

And that still leaves that "program expense" of $209,370 for "vehicle acquisition costs," a big part of any cancer recovery program ....

So that's what we can find with a few minutes of research on the Internet using readily available material. 

Yet this organization actually earns one star on Charity Navigator and the Hawaii AG brags about bringing some guy to justice for keeping $76,000.

Hanaokolele.

The Indianapolis Star reports that the US House Ways & Means committee has spoken with several college officials about possible misuse of tax exemption by NCAA and others in college athletics.  The story comes from Brad Wolverton in the Chronicle of Education, but only subscribers can take a look. 

The brief Star article mentions only salaries, but the Chronicle story goes beyond that saying that the committee was also questioning whether "donors should be allowed to take any kind of tax deduction for making mandatory 'contributions' to secure luxury-suite leases and seats to college-sports events." 

The Ways & Means committee wouldn't comment directly, but the Chronicle notes that the committee has held six hearings over the last 18 months on other nonprofit tax issues, notably relating to credit unions (discussed here last week) and nonprofit hospitals. 

In January, 2005, my proto-blog year, I posted the original "Big Mammon on Campus" in response to a New York Times article about the tens of millions raised by über-boosters to pay mega bucks for messiah coaches (like Urban Meyer) at big colleges (like the University of Florida).  It's nice to see that a year later Congress may have picked up the scent.  (And maybe in a decade or so something might get done about it.) 

Mitch Gold is in prison, but his network of charity telemarketing scams is stronger than ever.   Meanwhile, the law enforcement team that put him behind bars (after he had been in business nearly 15 years) has been disbanded and is unlikely to reassemble due to changed priorities after 9/11. 

Reporter Ronald Campbell in the OC Register has put together an extensive investigative report that boasts its own web portal worth exploring for its graphics and documents.  But the main article on Mitchell Gold is here and the one on protégé Joe Shambaugh is here.  On the other side, there a profile of prosecutor Ellyn Lindsay and even U.S. district court judge David Carter.

The sheer volume of assembled data and stories is a bit overwhelming.  To me, the only serious omission is the absence of a link to the Department of Justice Inspector General Report that details the investigative gap after 9/11.  The web portal puts more emphasis on the old prosecutor's argument that Supreme Court cases tie their hands, when it does appear that it is more a matter of putting the right resources on the job. 

WMN has noted before that it typically takes a decade to bring these cases to justice, whether it is Richard Blaich hijacking a foundation or another telemarketing scam like Global Mindlink. 

The data really speaks for itself, so WMN also finds disappointing that the article also offers some general quotes disdaining telemarketing firms from the self-appointed charity watchdog Daniel Borochoff and from Nonprofit FAQ editor Putnam Barber.  This reporter has offered us much more in the way of understanding the details of these operations, and the issue to me is not so much how bad the bad guys are, but why it takes the good guys so long to stop them. 

As Marin Alsop begins her work as music director designate of the Baltimore Symphony, the bad news is that the symphony in on track to accumulate a staggering amount of debt, projected at $16 million by the end of the current season.  That level of debt represents an amount equal to roughly half the symphony's annual budget.  The ArtsJournal blog points out that deficits this size have so far only been seen in symphonies with much larger budgets. 

These revelations came just under two months after the abrupt resignation of James Glicker, the former marketing executive whose (brief) tenure as President & CEO at the Symphony was characterized by some groundbreaking moves (such as Maestra Alsop), but also staff departures and continued skepticism about style and substance.  One obvious misstep resulted in cancellation of performances at the symphony's Montgomery County venue Strathmore Hall. 

Note: most older links are to Washington Post stories because Baltimore Sun moves most articles to paid archives.  The ArtsJounal blog by Drew McManus also provided better insight than found its way to the pages of the local newspaper. 

Interim President & CEO W. Gar Richlin set the tone with his comment, "Are tough times ahead? Absolutely," as Jane Marvine, head of the BSO players committee, sat in on the Baltimore Sun interview at his invitation.  The musicians' contract expires in September.  Richlin's background is in law, but he was also president of Advertising.Com, which was acquired by American Online in 2004.

If your interest is in the arts in the Washington DC area, though, you might find that ionarts (Eye on Arts) satisfies your aesthetic appetite, though the focus here is more on performance than on management. 

Compassionate-sounding programs provide fertile ground for serious abuses.  The Oregonian newspaper reports that a program designed to help the disabled through purchasing preferences on Federal contracts has, through lax oversight, led to the disabled being squeezed out of employment, while the non-disabled heads of the nonprofits reap huge salaries. 

The Javits-Wagner-O'Day program requires federal agencies to buy certain goods or services from nonprofits that employ blind or severely disabled workers.  Pentagon purchasing has doubled the program to $2.25 billion since 9/11.  Yet the products in the program are more complex to assemble, requiring a more skilled, less disabled work force with market-level salaries. 

Over 300,000 disabled workers are currently employed in JWOD programs, some paid less than minimum wage under a Federal waiver based on their presumably lower productivity. 

There is limited oversight over the programs—in many aspects it is an honor system.  Reforms are difficult because the nonprofits that benefit maintain a strong lobbying presence.  Once intended for the severely disabled, lobbying encouraged regulators to redefine disabilities to include conditions such as alcoholism or chemical dependency, minor learning disabilities, limited English, nasal polyps, carpal tunnel syndrome, allergies, arthritis and speech impairments.

In another case, the Army allowed a JWOD program to hire non-disabled workers under a three-month waiver, but never checked compliance at the end of the waiver period.  In other cases, JWOD contracts were let for complex tasks, like Humvee repair, that were inherently too complex for the seriously disabled. 

Yet the executive compensation is what really sets these programs apart.  The newspaper reviewed the compensation reported on Form 990 for the 50 top JWOD contractors and found that more than a dozen had salaries in excess of $350,000. 

The largest JWOD contractor, in El Paso, paid a $4 million management fee to a management firm run by the family trust of the organization's president, Robert E. Jones.  In a pattern that should be familar to readers of WMN, Jones took over the organization in 1995 and has been increasing his compensation reguarly ever since.  The paper found complaints and violations of employment rules as far back as 1999.  Only after the story ran did Federal reviewers in El Paso move toward formal sanctions, and the Mr. Jones abruptly resigned. 

We'll be interested to see what happens next.  Already the voices in El Paso are more fearful of the loss of jobs than about the program's lack of compliance with the employment regulations. 

A significant new survey of charity leaders provides confirmation that the smallest charities are not very satisfying places to work.  The report by Compass Point and the Meyer Foundation, is a follow up to a 2001 executive survey we talked about a few weeks ago.

This time, the report presents quite a few survey results broken down by size of organization.  These fragments taken together paint a consistent—and troubling—picture about the smallest charities, which as we have seen are also the most numerous.   The smallest organizations: 

• have the smallest amount of staff support in finance, fund raising and HR,
• pay their leaders the least in absolute dollars, and
• are least likely to contribute to retirement plans, but
• pay their execs the most as a percentage of the total expenses
• their leaders show the least job satisfaction and
• they are most likely to have made a major financial sacrifice to serve
• they are the least likely to have a succession plan or credible candidates on staff
• their leaders make the least use of professional development

There are also pointers to suggest why some of these things are so.  Based on the survey results across the board, the typical nonprofit head has a list of likes and dislikes that goes like this:

TIE (between like & dislike): Advocacy

Unfortunately, the smaller the organization, the less likely it is to provide its leader with support in finance, fund raising, and human resources, so the person at the top spends lots of time on tasks they dislike.  On top of that, compensation tracks closely with staff size—so fewer staff also means execs receive less pay for doing more work they don't like.   

There are also some indicators of relative organizational efficiency.  The groups with 1-4 staff report average exec salaries of $52,000, those with over 100 on staff, $139,000.  In other words, the large org exec receive less than 3 times the salary of the small org exec (on average).  Yet the large organization employs 25 to 100 times as many people and their execs report higher job satisfaction. 

The report itself concludes that there is a need for more training, coaches and mentors, succession planning, and peer networking, and a need to reduce expectations of board support, especially in fund raising. 

However, WMN suggests an alternate conclusions: stop encouraging and romanticizing these small charity ventures—on the whole they are neither more effective nor more personally satisfying than larger organizations.  Encourage small organizations to merge into more efficient, larger units that will be more productive—and actually more satisfying for the people involved. 

The Pittsburgh Post-Gazette provides us with a report, liberated from the Wall Street Journal, about the latest in the hundred-years war between banks and nonprofit credit unions.  It's especially intense in Utah.  Since credit unions are based on community and affinity groups, not surprisingly one aspect of credit union success there has to do with the LDS community.  (Here's one from Utah and one from Idaho.) 

A Utah banker, Harris H. Simmons, is currently head of the American Bankers Association, and the head of the Credit Union National Association is Dan Mica, a former congressman.  Needless to say, it's a lobbying battle royale, with the ABA represented by Sullivan & Cromwell and "Operation Credit Unions" featured on its web home page.  But the CUNA "BANK ATTACKS" boxing gloves seem to win the logo war. 

The ABA wants credit unions limited in their powers or taxed.  The Credit Unions want to grow as a way to maintain financial stability.  In some areas, like Utah, credit unions have grown quite large, with America First Credit Union now the 3d largest financial institution founded in Utah. 

The banks cite a 2003 GAO study that showed that people who use credit unions tend to have higher incomes than people who use banks.  Here's what the report actually said:

... [T]his analysis suggested that the percentage of households that only and primarily used credit unions in the low-income category was lower than the percentage of households that used banks in the same category (16 percent versus 26 percent). In contrast, households that only and primarily used credit unions were more likely to be moderate- and middle-income (19 percent and 22 percent) than those that only and primarily used banks (16 and 17 percent). Given that credit union membership has traditionally been tied to occupational- or employer-based fields of membership, the higher percentage of moderate- and middle-income households served by credit unions is not surprising. 

There's nothing so lucrative for lobbyists as a battle between competing for-profit and non-profit organizations, and this one has been going on for years. 

The Wise Giving Alliance of the BBB is reporting that the Billy Graham Evangelistic Association does not meet its tests for charitable accountability. 

Many church groups do not report to the IRS (and are not required to do so), even very large organizations like Catholic Relief Services.  BGEA, in contrast, does file an IRS Form 990 and does not hide behind a church exemption.   The Council of Better Business Bureaus and its member Better Business Bureaus generally do not report on schools, colleges, or churches soliciting within their congregations, but BGEA qualified apparently because it solicits funds from the public in general (as if the general public would donate to an evangelical ministry).

What are the complaints?  The chair of the board receives compensation (the chair is, of course, Billy Graham).  There is no functional expense breakdown in the annual report (even though there is one in the Form 990).  There is no link to the Form 990 from the web site.  And the organization didn't cooperate with the investigation required to assess 12 other standards. 

But wait a minute:  BGEA is a founding member of the Evagelical Council on Financial Accountability, which reports it as an organization in good standing (& includes the BGEA's published annual report linked on its web site).  ECFA membership requires an annual membership review of audited financial statements and every year ECFA picks 10% of its members for on-site review.  ECFA has its own Seven Standards of Responsible Stewardship (established well before the current BBB standards), and includes a  fund raising standard with 11 specific requirements. 

So who is BBB trying to protect by dinging Billy Graham?   Evangelicals?  They were the ones who literally wrote the book on charitable accountability back in 1979. 

One difficulty about the proliferation of watchdog agencies is that none of them recognize the ratings of any of the others.  Thus a charity is forced to decide whether to spend its resources complying with each and every one of them or risk being branded as lacking accountability.  Let's congratulate BGEA for having the courage to say no, we've done enough. 

The March 6 Wall Street Journal (if you subscribe) offers a day-after-Oscars look at how celebrities are manipulating the tabloids.  Is it a surprise that charities are also involved?  The story recounts this incident, first reported in the New York Post, about Ms. Jolie's arrangement to give a charity the first photo shot of her pregnancy, which then sold it to People magazine for a reported $400,000. 

The Post article is archived, but there's another version of the story from the Daily News that ribs other celebs for not geting nearly as much mileage out of their charity ventures.  (As WMN pointed out on Valentine's Day, you don't get anywhere with a run of the mill charity.)   The WSJ explains:

By arranging the Haiti photo, Ms. Jolie reaped several benefits. She ensured the picture was flattering. In diverting the money to charity, she put a twist on a tactic used by celebrities in recent years in which they arrange to be paid for wedding or baby photos with the proceeds going to charity [WMN notes: magazines like People will not pay sources directly]. And Ms. Jolie reminded fans of her devotion to humanitarian causes. She had taken a hit months earlier when she struck up a relationship with Mr. [Brad] Pitt shortly after his marriage to actress Jennifer Aniston broke up.

Now, what is this Haiti charity?  It's called Yéle Haiti and is a project of Haitian hip-hop artist Wyclef Jean.  It has gone well beyond the typical celebrity charity model, for instance working in partnership with the Pan American Development Foundation (itself affiliated with the Organization of American States) on a project to clean up the streets in Haiti—literally—with garbage trucks and an ad campaign promoting civic pride. 

The PADF, at $20 million a moderately sized international development agency receiving funds from USAID, is using the relationship with Wyclef Jean as part of a strategic focus on the Haitian Diaspora as a source for development funds.  As PADF director John Sambrailo pointed out at a hearing of the US House International Relations Committee, 20% of the Haitian population and most of its skilled workers have emigrated, and their annual remittances of $1 billion represent 17% of the Haitian GDP. 

A Guidestar search on Yéle Haiti Foundation (the name on the website) turns up no organization by that name, but other sources suggest that it is an operating name for the Wyclef Jean Foundation. There is a record in Guidestar for Wyclef Jean Foundation, but unfortunately the most recent IRS Form 990 on Guidestar is from 2000.  It would be a shame if this organization, which otherwise seems to be transcending the stereotype of superficial celebrity charity, stumbles for a lack of basic IRS reporting.

Or maybe we should say, darn those spell checkers.  From the Chronicle of Higher Education (click opens window):

They are not the Oscars, but the magazine FastCompany makes its social capitalist awards in its first issue of the year.  These are to organizations that best represent some sort of innovative solution to social problems, mostly via charities with an entrepreneurial element. 

Venture philanthropy, which views giving as another form of start-up venture capital, is a hot topic these days, with a new journal, the Stanford Social Innovation Review.  Generally, these are charities that have a self-sustaining income component. 

What I find peculiar with the 2006 FastCompany winners is their geographic distribution.  With one exception, just a handful of large metropolitan areas produced all of the top 25: 

Yet this seems about right.  Venture philanthropy often seems more akin to a "dot com" buzzword rather than a viable social phenomenon—longer on hype than on help. Anyone have any evidence that  "social entrepreneurs" have significantly penetrated to any cities with a shortage of trendy restaurants?  Why are the winners in so few cities?

The Washington Post tells us that Marsha J. Evans of the American Red Cross received a severance of about $780,000 and offers some additional details of the conflicts with the ARC board that brought her downfall.  We have already seen criticism of the way the board handled the departure, starting severance negotiations even before the full board had voted for it.

The perspective on this is that according to the IRS Form 990 for the ARC, Marsha Evans received an annual salary of $450,000 a year.  The ARC is an organization in the $2 to 4 billion range.  The web site of HR consultants Lee Hecht Harrison reports on a study of corporate CEO severance, indicating that CEOs at large corporations typically receive median severance of 24 months of salary with health and dental benefits continuation throughout the severance period. 

Knowing recent history at the ARC (the previous CED was also fired), any incoming CEO would certainly have insisted on a severance package before joining the organization, and such pre-employment agreements are not considered by the IRS to be subject to excess benefit review, since the prospective CEO is not considered to be a disqualified insider before hire. 

Because of its size, the financial impact of this continued CEO turnover on the Red Cross is negligible—it is the management impact that is significant.  However, many smaller organizations will not be able to afford this kind of executive transition, which is not a very comforting consideration for all the charities with baby boomer CEOs approaching retirement. 

Just a name coincidence, but if you want to see a corporate severance agreement, try this one for Nancy Evans of iVillage (not related, to my knowledge, to Marsha Evans), starting on page 101 or so (Exhibit 10.3) of this 10-Q.  This is a relatively modest settlement of 12 months of salary, or $325,000.

That peculiar juxtaposition of Hamas and Catholic Charities again, with a twist. 

The LA Times tells us about Hamas charities as building on direct services, like clinics and orphanages, while the US aid focuses on public works projects that don't have the same direct impact on people's lives.  But Hamas even in its charity has an agenda, as demonstrated by its support for the families of suicide bombers.

A few pages away in LA, we learn that the Catholic Church is losing its clout in Boston as shown by the resignation of seven board members of Catholic Charities in Boston because the four Massachusetts Dioceses don't want Catholic social service agencies to assist with adoption of children by gay couples.  This kind of public defiance of the Catholic hierarchy would not have been possible not so long ago. 

And then, over on the editorial page, we see compliments to LA Archbishop Cardinal Roger Mahony for championing the rights of illegal immigrants against attempts to prohibit social service agencies from helping them. 

The lesson seems to be that charity continues as a powerful political force, despite occasional backfires. 

Business Week asks the question in an opinion piece by Cristine Cronin, President of a tiny nonprofit charity portal for New York charities.  Cristine says no, but readers of WMN will know that the answer here is yes, obviously, yes. 

Everyone is entitled to their opinion, but Ms. Cronin does distort the truth with her comment that nonprofits are responsible for $43 billion of the New York City economy.  We recently showed that IRS data shows that most of this is from a handful of huge charities, like hospitals & universities.  The vast cloud of small charities together account for less than 5% of the total. 

There has for a long time been an Internet fantasy of a master charity portal that would give donors access to a wide variety of charities:  Guidestar has something of that vision as does Network for Good and many other less well known sites.  For the most part, donors haven't shown much interest in using these sites to seek out the small, unknown charities. 

A ripple of shock ran through certain nonprofit circles at the sudden dissolution of the Association for Volunteer Administration.  This was a group that had a wide following, sponsored an international conference (last November, in Jacksonville), the Journal of Volunteer Administration, and the CyberVPM email list.  AVA also offered a professional certification program.

Here is a copy of the letter (reformatted for pdf) that went out to members of the association and was posted on several email lists as well as here.  In it, the organization's President explains how the board was kept out of the loop as spending and committments went forward that could not be supported by the income of the organization.  Financial reports were promised and plausible excuses were made for the lack of financial reporting.  An audit report was delayed, a not uncommon occurrence in small nonprofits.  Then, by the time the truth of the organization's deep crisis came to light nothing more could be done. 

The discussion on the CyberVPM list expressed a lot of anger about the board, and less so about the last executive director John Throop.  But on the research-oriented ARNOVA-L list the comments were more reflective concerning the broader issues of charity governance, sustainability, and risk.

The fact is that AVA was a very small organization reporting about a half million in income for the year ended June 30, 2004 (the last available).   With an organization this small, it can be nearly impossible to achieve sufficient separation of duties to implement effective internal controls.  A determined individual can, with the best or worst of intentions, evade oversight.  And with little in the way of staff or assets, a single misstep can prove fatal to the organization. 

A former staff member of AVA has now set up his own personal web site and discussion forum for VM managers, calling itself "VMWeb.org" although it is not associated with a nonprofit organization (just like wheremostneeded.org).  There the discussion already is raging about the legitimacy of the site. 

The relationship between volunteers, paid staff, personal interests, and charitable mission is still a very open question.

Washington's fastest growing participation sport could be complaining to the IRS about charities that engage in politicking.  We had the case of the Ohio pastors and a few days ago the IRS report on its plan to expedite its refereeing of these complaints with their A-team crew. 

A see-saw battle in Texas strikes us as just right for March Madness.  It started when a lawyer (Barnaby Zall, who is also a charity guru who posts frequently on some charity email lists) wrote to Rep. Sam Johnson (R-Texas) to complain about a nonprofit group associated with the political watchdog group Texans for Public Justice. 

TfPJ itself is a 501(c)(4) social welfare organization that can engage in politicking.  However, its affiliated fundraising arm, the Public Justice Foundation of Texas, is a 501(c)(3), subject to the more stringent rules for charities that can receive deductible contributions. 

Rep. Johnson then wrote to IRS Commissioner Mark W. Everson noting some observations about the Texas watchdog.  What followed was an IRS audit of the organization, which recently ended by clearing the organization.

But in the meantime the TfPJ director Craig L. McDonald uncovered the correspondence leading up to the audit via a Freedom of Information Act request.  The Washington Post also found that Mr. Zall was once "of counsel" in a lawfirm that represented Americans for a Republican Majority, the leadership committee PAC promoted by Rep. Tom DeLay. 

So now another watchdog group, Citizens for Responsibility and Ethics in Washington, is drafting a complaint to the House Ethics Committee against Rep. Johnson for siccing the IRS on TfPJ. 

CREW is a 501(c)(3) organization, so stay tuned to see who complains next. 

In response to an inquiry from Sen. Charles Grassley, the American Red Cross has provided several thousand pages of background materials, ranging from thank you letters to board members to minutes from finance committee meetings.  The problems is, the documents are in 8 large, unindexed PDF files of 200-300 pages each. They are the links labeled Response 1 through Response 8. 

I would like to throw out the challenge to anyone in the community to break up these files into individual document files, index them, label them, and make them publicly available on the Internet within the next week or so.