Where Most Needed

Small Groups Push for Recognition of Slavery in Philadelphia

A tiny nonprofit and an unincorporated group kept the pressure on the National Park Service to tell the story of how President George Washington held on to his slaves in the original US capital after Pennsylvania abolished slavery. 

YMCA Camp Ruled Recreational, Not Religious

Colorado board says that the center is subject to up to $2.5 million in back taxes since 2002. 

NTEN to Party Down in DC

A new generation carries on an old paradox: one thing that small charities do well is throw expensive parties. 

Charity Connection II

The Washington Post picks up the story of diverted earthquake relief funds that officials claim were connected with the airline bomb plot. 

Harvard Alumni Association Offers High-End Educational Travel

With a new catalog offering trips from Timbuktu to  Antarctica, the program is an adventure in earned income.

Charities Face Off in Montana Range War

New money favors return of vast buffalo herds, crowding out ranchers that old money charity wants to preserve. 

Preserving a Little Frank Lloyd Wright House Takes a Big Commitment

A 900 square foot workers home in Milwaukee becomes a university architecture project.

Taglit Birthright Israel: Start-Up Charity Sponsors 100,000th Trip

Since 2000, this new organization has sponsored free 10 day trips to Israel for Jewish young adults from 18 to 26. 

Nonprofit Gets the Lighthouse, Government Cleans the Restrooms

A lighthouse can be a powerful metaphor.  Here, it's a metaphor for the relationship between charities and government.  The county commissioners of Currituck County, North Carolina, have come to an agreement with Outer Bank Conservationists (EIN 58-1424689 Form 990) over the operation of the Currituck Beach lighthouse after taking them to court. 

The OBC had restored the lighthouse and keeper's house under a 20-year lease from the Federal government it received in 1991.  But in 2000, Congress changed the law to allow the government to turn over lighthouses outright.  OBC competed for the title against the county and won in 2003.  At that point, the county sued to require the nonprofit to meet county codes about parking and restrooms. Both of these were on adjacent land, owned by the county, but managed by a different charity, the Whalehead Preservation Trust  (EIN 56-6424298 Form 990). 

The difference between the two charities is this:  the OBC receives about a half million dollars a year in fee income (admissions from 80,000 annual visitors and rentals for weddings and the like).  The form 990 shows that about half was used for operating expenses last year, leaving the organization with a hefty surplus.  The Whalehead organization gets over a million a year, but that is almost exclusively government funding.  So this appears to be the classic case where a nonprofit organization is getting the cream while the government is expected to provide the infrastructure (at its most basic: restroom maintenance). 

Under the agrement, OBC will start paying 17% of its gross income to the Whalehead group, to be put in trust for maintenance of the parking lot and restrooms.  Pure poetry. 

United Way Reveals Diversion by Former Head

If FEMA can wait until the holiday weekend to release bad news, it's hard to fault the United Way of New York City for waiting until now to reveal its own:  Former chief Ralph Dickerson, Jr. has agreed to reimburse the organization $227,000 for personal expenses he charged to the organization before his resignation in 2003.   The strategy seems to work: the New York Times carried the story on Friday, but a Google search on Saturday shows no other news outlet with the story. 

The largest portion was for $190,000 in donated hotel points.  Mr. Dickerson's office had administered the points program off the regular books.  So the revelation of the diversion coincided with the departure of his long-term assistant earlier this year. 

As explained in an articles in the Times travel section last year, hotel points, unlike airline miles, can be converted into a wide variety of other benefits and are in many ways equivalent to cash.  (Donation of miles and points to charities is significant but not large in comparison to the total miles and points, because such donations are not deductible.) 

The Times story recalls the sudden, unexplained resignation of Mr. Dickerson in 2003 after 33 years in the United Way system.  Not noted at the time, but significant in retrospect, is the scandal at the United Way of the National Capital Area in 2002.  The former head of the UWNCA, Oral Suer, was eventually convicted of fraud and the then head, Norman Taylor, was forced to resign for diversion of resources for personal use.  Both were long time associates of William Aramony, who served prison time for his own abuses at the United Way of America in the eighties and early nineties. 

Aramony, Suer, and Dickerson had presided over tremendous growth in United Way during their careers.  However, the standards of one era of United Way fundraising proved to be unacceptable to the next generation.  Not coincidently, rules were changed in the mid-nineties to clear the way for significantly higher direct compensation of charity executives and discouragement of self-authorized perks.  Mr. Dickerson has one foot in both eras, however, as he was by far the highest paid United Way executive at the time of his resignation. 

Lessons for charity internal controls:

• pay special attention to the accounting of in-kind donations, especially intangibles like airline miles, and
• be very concerned when executive tenure spans generations.