Friday, May 06, 2011

2011 off to a bad start for nonprofit trust

UPDATED: May 9 2011 - a class action lawsuit alleging fraud has been filed against Greg Mortenson and CAI.

UPDATED: May 6, 2011 - According to the LA Times, the IRS will investigate the Kabbalah Center, a Los Angeles-based nonprofit associated with pop singer Madonna, for tax evasion.

It's only May and so far in 2011 we've had the Fiesta Bowl scandal, a political takedown of Muhammed Yunus, the revelation of Bristol Palin's spokesperson pay "imbalance," and Three Cups of ... Questions about Central Asia Institute and Greg Mortenson.

All said, not such a good year for trust in nonprofits.


Kevin Johnson said...

There are lessons for donors and nonprofits in this story. Nonprofits will of necessity need to be more transparent and timely with their reporting both in regards to their finances but the impact of their work. Board members will have to be even more vigilant and better stewards of their missions.

Could this have been prevented? The Minnesota Charities Review Council created a set of standards and independently evaluates groups to see if they measure up. A similar set of standards is used in Maryland for peer review of nonprofits to ensure they meet a certain standard of excellence. Both types of review would likely have raised questions for the group’s board and donors and helped everyone to avoid these blunders. More comments here:

Savitri said...

It seems important to clarify on this list that Mohammed Yunus was cleared of all charges in relation to the Grameen Bank. The government did use his age as a way to eliminate him as head of the bank, but retracted any allegations of wrongdoing as I understand it.
The way our media works it is much easier to get allegations publicized than retraction of those allegations at a later date.

Lucy Bernholz said...

Thanks for this - you are absolutely right and I appreciate the clarification.

I should note for the record that I am not substantiating or refuting any of the allegations or issues raised in any of the stories. I'm just tracking them here.