Journalists Often Overestimate Incidence
of Criminal Behavior at Charities
fewer fraud cases at nonprofits. Nonprofits could have been
more trustworthy, or perhaps
the frauds they committed were
not caught as often; it is also
likely a much smaller share
of the fraud examiners knew
much about nonprofits then.
Whatever the explanation, however, applying an opinion about
Continued from Page 31
We don’t know yet
whether Mr. Morten-
son committed fraud
or simply ran his
organization poorly.
the median cost of fraud among
all organizations to nonprofit
ones produces a factoid, not a
fact.
Nonetheless, despite its spu-
riousness, the $40-billion esti-
mate of losses in the nonprofit
world due to fraud has acquired
a life of its own—and been fur-
ther distorted. An article in
The New York Times in 2008
about the Nonprofit and Volun-
tary Sector Quarterly article, for
example, observes that “what
is getting the attention of non-
profit leaders is the report’s es-
timate of the overall cost, which
the authors put at $40-billion
for 2006, or some 13 percent of
the roughly $300-billion given
to charity that year.”
Later the article notes that
all sources of revenue—not just
contributions—were taken into
account when calculating the
figure and quotes Independent
Sector’s president, Diana Aviv,
as suggesting that it is too high
because it is “lumping” business
and government together with
nonprofits.
THE CHRONICLE OF PHILAN THROP Y
CHRIS TOPHER BURKE
“If I donate your time, and you donate my time,
I think there might be a tax deduction in that.”
and speeches were fabricated
and that the Central Asia Institute’s programs have not had
as much success as claimed: If
embellishment were to become
a form of fraudulent activity,
more than a few organizations
would be in trouble.
The attorney general of Montana (where the charity is located) has already begun an investigation of the Central Asia
Institute and will ultimately decide if Mr. Mortenson’s conduct
went too far.
But in the meantime, those
who believe that the nation’s
charities need more policing
would do well to take another
look at their own conclusions.
Leslie Lenkowsky is profes-
sor of public affairs and philan-
thropic studies at Indiana Uni-
versity and a regular Chronicle
contributor. His e-mail address
is llenkows@iupui.edu.
Foundations Need More Trustees Who Reflect
America’s Diversity and Volunteer Ethic
more than a small amount of
time. Nobody knows exactly
how much is paid in fees, but in
a study I conducted a few years
ago, it seemed likely that foundations spend some $300-mil-
lion to $400-million a year on
trustee fees, money that otherwise could be going to needy
nonprofits. It is a disgrace, especially in these tough economic times, that such a practice is
permitted to continue.
To encourage people of moderate incomes to serve on foundation boards, Congress might
Continued from Page 33
The diversity
issue on foundation
boards has become
largely a matter
of class.
want to allow up to $8,000 a
year for each trustee for his or
her work at a foundation.
Diversity of foundation
boards.
A recent foundation management study, issued jointly by the
council and the Foundation Center, reported that almost three-quarters of foundation board
members are over 50 years of
age, that 62 percent of them are
male, and that only 15 percent
are members of minorities.
Although the number of mi-
norities and women has notice-
ably increased over the past 25
years, their numbers are still
unacceptably low. Many people
like me who started criticiz-
ing board performance years
ago attributed it to the ab-
sence of women and minori-
ties. Yet today, notwithstand-
ing the increase in board di-
versity, we have not seen any
major improvement in the ways
boards function. The reason for
this lack of change is that the
women and people of color who
have joined foundation boards
in recent years resemble their
white, male, corporate counter-
parts. They tend to be wealthy
and highly paid professionals,
people invested in the economic
and social status quo.
Pablo Eisenberg, a regular
Chronicle contributor, is a se-
nior fellow at the Georgetown
Public Policy Institute. His e-
mail address is pseisenberg@
verizon.net.
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