The nonprofit and politics - how much is too much?

It's encouraging that so many current conversations are focused on the future of philanthropy, integration with social media, and non-profit horizons. In this last week of 2010, amid the postal flurry of end-year fundraising appeals, it's also worth remembering the little things that make us worthy of all those big thoughts.  (CONTINUED)

5. In our succession of election cycles and partisanship, philanthropists and nonprofit executives are frequently called upon to lend their own names to support candidates and causes. Are there limits or caveats to safeguard the charitable mission and avoid abuse?

Even distinguished leaders of organizations, whether volunteer or staff, should realize that (a) any fame derives partly or completely from their association with their organization, and/or that (b) they at least have a responsibility to protect the organization’s reputation. A 501(c)3 charity, especially one to which others are contributing time and funds, does not “belong” to any individual.

STAFF

To avoid the misuse of an organization’s good name, executives should refrain from publicly supporting political causes, foreign or domestic, even if they don’t mention their affiliation. If an organization decides institutionally to support such a cause, then listing an individual as the organization’s representative is perfectly appropriate and understood. 

BOARD MEMBERS

Lay leaders using their affiliation to sign public letters should emphasize when this is only for “identification purposes” – at the very least. Ideally, they should never list their affiliation for personal gain, political or financial. Anyone who needs to list such an affiliation is obviously not a public personality in his/her own right, and is understood to be trading on the privilege of public service. 

The signers of the U.S. Declaration of Independence concluded to “mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.” That might be a reasonable test of what really drives someone to support any cause, political or charitable. Sacred honor is a rare asset, and possibly the most valuable resource anyone can bring to a nonprofit endeavor.

How independent will your 2010 "independent" audit be?

It's encouraging that so many current conversations are focused on the future of philanthropy, integration with social media, and non-profit horizons. In this last week of 2010, amid the postal flurry of end-year fundraising appeals, it's also worth remembering the little things that make us worthy of all those big thoughts.  (CONTINUED)

4. Here are more thoughts on conflict of interest, beyond the standard declarations that many staff and board members sign annually:

THE “INDEPENDENT” AUDIT FALLACY

Often, the same accounting firm handles both the IRS filings and the “independent” audits, using the same team of accountants, year after year. Such audits are not functionally independent and leave the organization vulnerable to wrongdoing and liable for eventual penalties. When the audit firm has no learning curve, no need to ask difficult or obvious questions – no stomach for alienating a valuable client by raising red flags – it is time to SWITCH AUDIT FIRMS. 

THE “AUDIT” COMMITTEE HANDICAP

Likewise, if the audit committee which REVIEWS the audit results is comprised of those indebted to the organization’s leadership, there can be no realistic expectation of due diligence or objective oversight. Serving on the audit committee should NOT be a path to promotion within the board, and ideally the chair and most members of the committee should have no further affiliation with the organization. For the system to work, there need to be built-in INCENTIVES – not barriers – to make waves. Volunteer treasurers and audit chairs should also have financial aptitude, relevant experience and sterling reputations, so they can hold their own with those more invested in a "clean" audit.

In nonprofits, conflicts of interest shouldn't pay dividends

It's encouraging that so many current conversations are focused on the future of philanthropy, integration with social media, and non-profit horizons. In this last week of 2010, amid the postal flurry of end-year fundraising appeals, it's also worth remembering the little things that make us worthy of all those big thoughts. (CONTINUED)

3. The integrity of staff and institutions cannot be guaranteed without clear and consistent policies. 

VOLUNTEER LEADERSHIP

If charitable institutions choose to compensate their trustees or reimburse them for expenses, this needs to be explicitly stated and detailed, not hidden in a footnote or run through a shady outside arrangement. With the exception of student activists, volunteer leadership should not be subsidized for travel and other expenses, nor should they have any business relationship with the organization they serve. Staff members should never treat lay leaders to meals. In the exceptional case of an individual leader with limited financial resources – but judged to be indispensable – the arrangement should be explained in detail to the full board, and possibly to the public at large.

PROFESSIONAL STAFF

Similarly, staff should be incentivized to do their jobs with maximum effort and integrity, along with the means to prove it. Organizations should clearly disclose any outside business relationships or financial arrangements between staff and leadership, to ensure that lay leaders are not distracted from exercising their fiduciary and oversight responsibilities – and so the public knows exactly how much communal servants are profiting from their professional service. Before receiving public awards and gifts of value, staff and leadership should get approval from the organization through which they earned these benefits. The same goes for accepting free travel, accommodations and other services from governments and businesses that may expect favors or contracts in exchange. There should be a clear, written policy that protects the reputation and credibility of the individual, the institution, and the cause; it should apply to senior management in particular, so employees don’t look upstairs to see a double standard.

Tax-deductible donations to 501(c)3 organizations render them a public trust by definition. Their budgets and prerogatives should never be seen or perceived as vehicles for anyone's personal gain. Following a strict and transparent code of conduct can help keep everyone focused on the charitable mission.

How many nonprofits get robbed blind, deaf, and dumb.

It's encouraging that so many current conversations are focused on the future of philanthropy, integration with social media, and non-profit horizons. In this last week of 2010, amid the postal flurry of end-year fundraising appeals, it's also worth remembering the little things that make us worthy of all those big thoughts. (CONTINUED)

2. Since non-profits are accountable for donor dollars, most of which are one-third subsidized by tax write-offs from the federal government (and therefore absorbed by all taxpayers), there need to be serious, results-oriented safeguards against theft by employees, officers, and grantees. Cash transactions and reimbursement for expenses are the easiest ways to steal charitable dollars. Where expenses cannot be pre-paid or billed directly to the sponsoring organization, ORIGINAL receipts and ticket stubs or boarding passes should be mandatory. Corporate credit cards sound glitzy, but they prevent anyone from walking away with unreported cash refunds. Instead of REIMBURSING for airfare, flights should be purchased either with the corporate card or through the organization’s own travel agent, so the money stays between the organization and the vendor.

Nonprofits have work to do RIGHT NOW.

It's encouraging that so many current conversations are focused on the future of philanthropy, integration with social media, and non-profit horizons. In this last week of 2010, amid the postal flurry of end-year fundraising appeals, it's also worth remembering the little things that make us worthy of all those big thoughts.

1. Non-profits have a responsibility to their donor base, and not only to ensure and assure that donations are properly spent and the mission carried out as promised. They should remove any stumbling block that might prevent a donor from following the law of the land. This means making clear to each supporter – in real time and again at the close of the tax year – the precise dollar amount that is tax-deductible. While this is gaining in popularity, it is not yet universally applied.

Quote of the Day: Classified...

Just because a document is classified does not mean it's either useful or accurate.

A view from the Gulf

At the Arabs’ Table: A View from the Gulf

(A variation of this has been published in JTA and The Jerusalem Post.)

There is a conversation going on among Arab policymakers, and it’s neither all about Israel nor just Iran’s nuclear program. 

This Arab conversation is diverse and complex, counter-intuitive, on their turf, but always a two-way dialogue. One doorway into this conversation was this month's Manama Dialogue, sponsored by the International Institute for Strategic Studies and hosted warmly by the Kingdom of Bahrain. A Jewish organization with background in the Gulf and ties to the leadership in Jerusalem and Washington can contribute to this dialogue as well as draw from it.

Manama attracts key ministers from the Gulf, as well as Europe, Asia, and North America – all with a strategic interest in addressing regional security here. The unofficial nature of IISS uniquely allows for equal participation and interaction by government and military officials, policy experts, and non-governmental delegates. Where else would the Iranian Foreign Minister sit at the same table and listen to remarks by the U.S. Secretary of State.

At Friday’s opening dinner, the atmospherics were palpable. Since the center VIP table was positioned perpendicular to the dais, Iranian Foreign Minister Manouchehr Mottaki was able to avoid looking at Secretary of State Hillary Clinton while during and after her speech. Quite the cool customer, he sat through her remarks and the question-and-answer without ever turning his head or displaying any expression. Most important, though, is that he did sit in that ballroom, barely 50 feet from the lectern, and four seats down from the Secretary during dinner. And he had his aides taking strenuous notes.

Wikileaks on Iran? Get over it. Quickly.

Many Israelis -- official and otherwise -- have been enjoying a victory lap over the Wikileaks dump of classified U.S. diplomatic cables. On Iran, the cable traffic reports several Arab leaders calling for the United States to attack Iran, or better yet... attack Iran. 

Few are suggesting the United States or Israel should attack Iran just because some Arab leaders think it would be either a nice idea or a last resort. But, the argument goes, this proves that Arab leaders are more worried about Iran as a threat than about Israel and the Palestinians. Not exactly a ringing endorsement...

First, do Israelis really feel proud because they’re considered less of a menace than the Islamic Republic of Iran, which is widely understood to be pursuing a massive nuclear program and sponsoring terrorism and subversion across the Middle East and as far away as Paraguay?

Second, if the Israeli-Palestinian issue is less of a concern to Arab governments than Iran is, this means Arabs may be less available on the giving side in any give-and-take to resolve the Palestinian issue. If the Arabs again wash their hands of the Palestinians, Qatar and Oman are less likely to feel the pain than Israel will. If anything, getting Arabs MORE worried about the Palestinian issue could be useful to Israel’s long-term goal of finalizing its borders and normalizing its status within the region.