The board consists of Don Imus, his wife, and principals in a company that the ranch pays for management services. The ranch currently sits on $6 million cash—with not a single independent director.
We saw in the case of Jack Abramoff the power that charities have in generating public sympathy for public figures accused of wrongdoing. The same process is now going on with Don Imus, and I think the blog Don't Tell the Donor is correct that the delay in Mr. Imus' suspension is due to his charity radiothon.
One of the key pieces of the Imus charity program is the Imus Ranch (EIN 13-3997308 Form 990), Mr. Imus' summer home in Ribera, New Mexico, about an hour southeast of Santa Fe. It's organized as a charity because while he's at the ranch he and his wife Diedre host ten kids a week (about ninety a year) from ages 11 to 16 who have had cancer or blood disorders or who have lost a sibling to sudden infant death syndrome.
According to a Wall Street Journal story in 2005 (by Robert Frank, but behind subscriber walls), Mr. Imus' wanted a ranch, his wife wanted to start a charity for kids, and they were inspired to combine the two by the example of Paul Newman's Hole in the Wall Gang Fund (EIN 06-1157655 Form 990), a camp in Connecticut that serves 1,000 kids a year.
The Journal article focused on the huge cost of the ranch on a per-kid basis, which amplified on a 2003 article in the Albuquerque Journal (Sick Kids' Ranch Has Hefty Costs, Thomas J. Cole). The ranch buildings cost over $20 million and include a studio from which Mr. Imus broadcasts during his stays at the ranch. The San Miguel county assessor decided that the property was entitled only to a 55% property tax exemption because of the non-charitable uses (Mr. Imus' studio and the fact that the kids are only there during the summer. Then New York attorney general Elliott Spitzer started an inquiry into the ranch, but dropped it (Mr. Imus endoresed Mr. Spitzer's run for governor in 2006.)
The Form 990 shows an operation currently is holding in excess of $6 million in cash. The stated purpose for this is to build up an endowment so that the ranch can be run on the proceeds.
But even more noteworthy is the board of the organization, which consists only of the Imuses and the two representatives of financial manager of the ranch, whose firm receives $12,000 a year for services.
The Better Business Bureau Wise Giving Alliance includes in its standards for charitable accountability a requirement that a charity board have at least five members (and by comparison, Hole in the Wall Gang Fund has twenty-eight), that no more than 10% of board members be directly or indirectly compensated by the organization (here 50% are), and that neither the chair nor treasurer be compensated (here, the books are in the care of the management company whose members sit on the board).
The standards also call for no material conflicting interests with the charity resulting from any relationship or business affiliation. In this case, the fact that the ranch combines charitable and non-charitable activities seems to me to be enough of a conflict in itself to call into question the ethics of having the Imuses on the board. The Albuquerque Journal article also points out that Imuses privately own about a fifth of the ranch property (637 acres out of about 3,000), creating another area of conflicting interest.
Aside from the serious ethical questions, there's the peculiar nature of the program. An article that appeared in American Profile in 2005 (by Beverly Keel)—along with a Q&A sidebar—to me raises even more questions about the benefit of giving kids a week with Don Imus.
- The nature of the work on the ranch precludes participation of all but the highest functioning kids. In other words, really sick kids are excluded.
- At Mrs. Imus' insistence, all food served at the ranch is vegan. Not all the kids like it, but they aren't given any choice in the matter.
- Even this sympathetic reporter acknowledges that Mr. Imus: "doesn’t become a warm, fluffy man when working with the kids. He can be gruff and stern and even curse on occasion, but he’s often the first person to give a compliment or word of encouragement." One 12 year old girl is quoted: "Mr. Imus can scare me sometimes. Other than kind of yelling at us, he’s really nice."
- In the final assessment, the article acknowledges that something like 20% of the kids have an unpleasant experience.
The frequent references like "it's about hard work," "tough love," "This isn't Camp Happy Face," "These aren’t dude-ranch horses," give me the impression that it's definitely not kid-centered—the kids experience might even be interpreted as abusive. We probably should be grateful that only about 80 kids a year are exposed to it.
My overall impression is that the Imus Ranch is more of a vanity project than a charity project. Under any reasonable degree of scrutiny the Imuses would have to open up the board to independent viewpoints and put together a program that actually serves these vulnerable kids rather than the founder's fantasies. But Mr. Imus' power as a media figure precludes such scrutiny.