Monday, May 25, 2015
Earlier this month, we covered the 9th Circuit decision that denied the Center for Competitive Politics (CCP) an injunction that would have restricted California Attorney General Kamala Harris from requiring a list of donors who had contributed more than $5,000 in a year. See Lloyd Mayer's post.
Under current California law, nonprofit groups seeking donations from California are required to disclose donor names to the AG and to the IRS. The CCP and America for Prosperity have refused to surrender these lists asserting that their donors would be harassed. Harris has indicated that the lists would be kept confidential and used only for investigatory purposes.
As an update, the Supreme Court has denied an emergency appeal from the CCP. The CCP filed the appeal with Justice Kennedy, who denied it without prejudice. David Keating, President of the CCP, has stated that the center will continue injunction efforts in the event Harris attempts to collect donor information. Interesting, Justice Kennedy is a proponent of free speech and free spending in terms of politics, two aims the CCP promotes; however, he is also in favor of disclosure laws. This case raises important First Amendment questions for the sector. See LA Times.
Thursday, May 7, 2015
New York City seems to be in the news a lot this week. In a press release issued yesterday, the Carnegie Corporation of New York announced grants totaling $3.6 million in support of education and enrichment programs in the greater New York City region.
The awards form part of the foundation's 2015 Presidential Discretionary Grants program. Pursuant to that program, eighteen museums, libraries, and performing arts and science centers received grants of $200,000 each for existing programs aimed at K-12 students. Grant recipients include the American Museum of Natural History; the Asia Society; the Brooklyn Academy of Music; Carnegie Hall; Cooper Hewitt, Smithsonian Design Museum; Liberty Science Center; Lincoln Center for the Performing Arts; the Metropolitan Museum of Art; the Morgan Library & Museum; the Museum of Modern Art; the National September 11 Memorial & Museum; New Jersey Performing Arts Center; the New York Botanical Garden; the New York-Historical Society; the New York, Brooklyn, and Queens public libraries; and Studio in a School.
Commenting on the awards, Carnegie president, Vartan Gregorian, said:
New York City, one of the cultural capitals on the United States, has the largest public school system in the nation. Carnegie Corporation is proud to support the City's cultural institutions in order to enhance the curriculum of our public as well as private and parochial schools with the riches these museums, libraries, and centers possess. It speaks well of these organizations' leaders that they have developed education programs to help students overcome deficiencies in the arts and sciences that our schools can't provide due to financial factors.
Today's Philanthropy News Digest is reporting that as Africa "struggles to address the effects of climate change and an unprecedented youth bulge, the Rockefeller Foundation is working across multiple fronts to build the resilience of African economies."
Attributing the report to the Voice of America, the Digest reports that current efforts includes the $100 million Digital Jobs Africa initiative, which was launched in 2013 with the aim of boosting the information and communications technology (ICT) sector in six African countries -- Ghana, Kenya, South Africa, Nigeria, Morocco, and Egypt. Foundation president, Judith Rodin, told the VOA:
We are excited to see so much opportunity and such a growth market in the ICT sector more broadly across the continent. [There are] so many technology parks growing [and] so many companies really growing on technology-based platforms. We know that ... the continent has to focus on employing this extraordinary youth bulge that we are going to see. We think ... a critical part of shared prosperity as we go forward [means] developing growth in the ICT sector which often yields some of the better paying jobs.
Elsewhere on the continent, the foundation is working to help small farmers adapt to climate change by collaborating with local partners to capture run-off from flooding for use in irrigating fields. It is also working in partnership with the World Food Programme and has bankrolled a technology called risk metrics that can help predict an impending drought. As a final matter, the foundation is also -- again in conjunction with the World Food Programme -- creating a country-level insurance mechanism that enables countries to access resources in the immediate aftermath of a natural disaster rather than having to wait for international development assistance to arrive.
Wednesday, May 6, 2015
The Washington Post is reporting that just as business, political, and philanthropic leaders gathered in Marrakesh, Morocco, for the first Clinton Global Initiative meeting on Africa and the Middle East, Chelsea Clinton, the former President's daughter, said there is a "political dimension" to the controversy over multimillion-dollar gifts from foreign governments and corporations to her family's foundation.
Ms. Clinton, the Clinton Foundation's vice chair, said the scrutiny has intensified with the launch of her mother Hillary Clinton's White House run. She dismissed the idea, raised by some Republicans and campaign watchdog groups, that foundation donors seek to curry favor with her powerful parents.
I was wondering what all the traffic gridlock was about when I got out of LaGuardia airport early Monday afternoon and tried to make my way to Poughkeepsie. fearing the worst, I tuned in to 1010 WINS to catch the traffic report. That was when I heard it: President Obama had been at Lehman College where he had announced the creation of a nonprofit called the My Brother's Keeper Alliance. The new organization is a spinoff of a White House initiative of the same name aimed at uplifting African American and Hispanic boys from preschool through high school.
In launching the new Charity, President Obama stated that the My Brother’s Keeper Alliance will "continue the work of opening doors for young people -- all our young people -- long after I've left office."
Reporting on the launch, TheNonProfitTimes reports that the President
told the audience at Lehman that the new organization has secured $80 million from companies such as Deloitte, News Corp and American Express. The group's star-studded executive team and advisor board will include former Secretary of State Gen. Colin Powell, Sen. Cory Booker (D-N.J.), basketball stars Alonzo Mourning and Shaquille O'Neal, and former Attorney General Eric Holder, among others.
The new organization will be led by former Deloitte CEO Joe Echevarria and might serve as a vehicle through which the president can influence policy after his second term is up. Speaking to reporters, White House Press Secretary Josh Ernest stated:
While I'm not in a position to describe the specific, detailed relationship between the president and this alliance that will continue after his presidency, I can tell you that this is an issue that the president intends to continue to be focused on long after he has left the Oval Office.
Meanwhile, Broderick Johnson, chair of the White House initiative, linked the My Brother's Keeper with the unrest in Baltimore following the death of Freddie Gray. Writing on the My Brother's Keeper initiative's website, Johnson stated:
For so many of us, the My Brother's Keeper initiative is deeply personal. As a proud son of Baltimore, this week's announcement comes at a time of unique and special resonance for me. As the country reflects on our shared responsibility to ensure that opportunity reaches every young person, I urge everyone to look at their own capacity to make a difference.
The My Brother's Keeper initiative was designed to focus federal resources towards closing the opportunity gap experienced by African American and Latino males. To that end, Johnson identified almost $1 million in funds from a number of federal agencies: the departments of Education and Health and Human Services announced $750 million in Preschool Development Grants for 18 states this past December, and the Department of Labor and the National Guard have programs that will together expend $100 million to improve career prospects for minorities.
Wednesday, April 29, 2015
The Los Angeles Times reports that the City of Los Angeles has sued Gardens Regional Hospital & Medical Center for “repeatedly dumping patients … without appropriate treatment or discharge plans.” According to the Times, L.A. City Attorney Mike Feuer has sued several hospitals over the past two years on similar grounds, and he is currently investigating other facilities. One example cited by the story is Glendale Adventist Medical Center, which is reported to have “paid $700,000 last year to settle dumping allegations without admitting wrongdoing.”
As to the predicament facing hospitals, the story explains as follows:
Some hospitals maintain they are hamstrung by laws that stop them from confining all but the most severely psychotic homeless people. State law requires discharge planning, but hospitals say there is nowhere for homeless patients to go — especially those with mental conditions.
But Feuer maintains that several hospitals have agreed to proper protocols. The Times cites him as saying, “In each of the cases we've resolved with a medical care facility we've not had a single problem," and that "it is possible for a healthcare facility to adopt humane and decent treatment."
The National Football League has announced that it will no longer file as a tax-exempt entity, notwithstanding its long-standing status as an organization described in section 501(c)(6) of the Internal Revenue Code. As reported in Bloomberg, NFL Commissioner Roger Goodell characterized the decision as eliminating a “distraction.” The Bloomberg piece also opines on the calculus behind the tax-exemption audible:
The league’s decision pre-empts a move to revoke the tax break that had been led by former Senator Tom Coburn of Oklahoma. That effort has gained some momentum in recent years, but not enough to pass either the House or the Senate. The NFL’s action removes a point of leverage for Congress in its continuing inquiries into the league’s handling of concussions and domestic violence.
For the NFL, the costs of losing the tax break are minimal, an estimated $109 million over the next decade. There are benefits for the league, too, including the end of federal disclosure requirements that put Goodell’s salary and some other league information in the public domain.
The tax cost of the league’s foregoing federal income tax exemption is not precisely known. According to the Wall Street Journal,
The size of the NFL’s tax bill is unclear. In 2013, a report by Sen. Tom Coburn (R., Okla.) calling for the NFL and National Hockey League to give up their tax-exempt status estimated that such a move would generate $91 million annually for the federal government. But Congress’s Joint Committee on Taxation pegged the amount at just $109 million over the next 10 years.
As to the benefit of not disclosing salaries to Monday morning quarterbacks, the Washington Post makes an interesting observation:
[T]he NFL’s executives will gain cover from criticism over their paychecks. The league’s 2013 tax filing revealed that, besides Goodell’s $44 million, six other executives drew seven-figure salaries and 298 employees made $100,000 or more.
Tuesday, April 28, 2015
Charity Navigator has published a list of charitable nonprofits that are working to aid the victims of the tragic, enormous earthquake that struck Nepal about 50 miles from Kathmandu three days ago. According to Charity Navigator’s website, “the charities on our list have indicated that they plan to assist in the relief efforts in some way,” and they “have a 3 or 4 star Charity Navigator rating.” Donations to these charities also may be designated specifically for the relief of victims of the Nepal earthquake.
Monday, April 27, 2015
Accounting Today reports that the Financial Accounting Standards Board has issued a proposed accounting standards update that would modify how nonprofits must report information in their financial statements and notes thereto. Proposed changes address the reporting of restricted assets, results of operations, expenses by both nature and function, investment returns net of expenses, operating cash flows, and quantitative and qualitative information about liquidity.
The Clinton Foundation is obviously making headlines these days. I hardly know anything at this point begging for this nonprofit law professor’s comment. But for those who would like a sampling of stories from the past week’s news cycle, here is coverage from the Chicago Tribune, USA Today, the New York Times, and the Washington Post.
Wednesday, April 15, 2015
Happy Tax Day all - and a special happy statute of limitations day to all of those involved in the preparation of tax returns!
Thursday, April 2, 2015
The Supreme Court of Pennsylvania has decided to consider an issue that could have far-reaching consequences for the way attorneys and charities interact. The issue before the court is whether an attorney who has reason to believe that charitable assets are being diverted to private individuals may inform the Attorney General. This issue deals with Rule 1.6 of the Rules of Professional Conduct, which permits breaching attorney-client confidentiality in very limited cases, e.g., to prevent death or serious bodily harm. Not surprisingly, a cloud of secrecy has surrounded the case since late last year, and the order permitting consideration of this issue was only made public in March. A recent article explores this case and its possible implications.
Interestingly, the petitioner’s argument is not based upon Rule 1.6 but rather on the idea that counsel has a fiduciary duty to report unlawful diversions of charitable assets to the Attorney General since the general public is affected. In addition, the petitioner claims that since the charity is a tax-exempt entity supported by the public, it has waived its rights under Rule 1.6. As pointed out in the article, Rule 1.13 is also relevant. Rule 1.13 details the steps an attorney may take within an organization before going outside of it. For example, an attorney may choose to report the matter to higher-ups within the organization. As noted, attorney-client confidentiality serves an important purpose in our society. Overall, we want to promote the seeking out of legal counsel when there is a problem, and this will not happen if potential clients are afraid their confidences will be shared. As noted above, limited, dire circumstances must exist for an attorney to breach attorney-client confidentiality.
At the same time, one must ask whether the attorney-charity relationship calls for a different rule, particularly in the case of public charities. After all, these charities are accountable to the public. Also, given the recent problems associated with IRS oversight and the growing number of charities, attorneys may provide a more helpful, rather than hurting, hand in the quest to monitor an ever-increasingly large number of organizations.
Tuesday, March 31, 2015
Earlier this month, the blog featured a piece on for-profit college conversions. Citing a recent New York Times article, the post noted that several for-profit colleges have decided to become nonprofits to escape certain governmental regulations and bad publicity. Interestingly, a third option is becoming apparent for colleges as reported in Inside Higher Education: becoming a benefit corporation. As you may know, a benefit corporation exists in the space between the for-profit and nonprofit sectors and focuses on achieving a double bottom line: profit and social impact. The first regionally accredited college to take the route of benefit corporation status is Alliant International University in California. Alliant was previously a California nonprofit accredited by the Western Association of Schools and Colleges (“WASC”). Last summer, WASC approved Alliant’s change of status. It is anticipated that other nonprofit institutions will follow suit due to the desire to participate in a new system of health sciences institutions known as Arist Education System. Arist Education System is headed up by University Ventures Fund and supported financially by Bertelsmann, the German media giant. Its purpose is to train health professionals who can work in collaborative teams, which is a new focus of a significant number of hospitals and health systems. It is envisioned that this goal will be accomplished through a focus on student outcomes, and Arist is convinced that such focus will be achieved if the social mission of universities is protected.
The benefit of the change to Alliant is that it may now solicit much needed private funding while still maintaining a public commitment to its mission and public purpose. As a California public benefit corporation, Alliant is required to remain accountable not only to board members and in terms of profit but also to the larger society and in terms of social good. In contrast to for-profit colleges that are changing to nonprofits, Alliance will actually face more regulation as a result of its change in status. As Alliant President Geoffrey Cox noted, by becoming a benefit corporation rather than a for-profit, colleges can preserve their unique missions and attract investors who are looking to leave their funds with them for the long-haul. Finally, I would add that benefit corporation status will keep accountability and transparency in the equation of measuring the performance of colleges in terms of both bottom lines.
Thursday, March 12, 2015
The Chronicle of Philanthropy is reporting that ten individuals using technology to improve the world will be honored tonight at the Dewey Winburne Community Service Awards at the South by Southwest (SXSW) Interactive Conference. The awards honor the late Dewey Wineburne, a co-founder of SXSW Interactive, who had deep interests in education and technology.
According to the Chronicle:
This year’s honorees, selected by a panel of previous winners who live in Austin, represent five countries and a range of interests, including literacy, economic opportunity, and journalism. Each will receive $1,000 for the charity of their choice.
Among the honorees are:
- Rebecca McDonald of Australia who, after seeing footage of the 2010 earthquake in Haiti, quit her job in Australia and moved with her husband to the Caribbean country where she founded Library for All, an online digital library accessible using tablets distributed to schools across Haiti. Books are carefully selected to be culturally relevant and language-appropriate, with most written in French or Creole. The organization pays local publishers for texts and asks larger companies, which do not usually sell books to Haiti, to donate books.
- Jukay Hsu, a native of Queens, New York, who founded Coalition for Queens, a nonprofit designed, according to Mr. Hsu, to foster "a more inclusive tech ecosystem" and "pioneer a pathway from poverty to the middle class." The organization's keystone program, Access Code, trains people — many of them immigrants — to create mobile applications and prepare for entry-level developer jobs. So far, the average income of participants going into the program has been $26,000, while their average income after completion is $73,000.
- Libby Powell, of London, England, who has used her training as a journalist to found Radar, a communications-rights organization that trains citizen reporters and promotes the stories they tell through social media and other ways online. Based in the United Kingdom, the staff offers editorial guidance to local correspondents who report from the field. The group has generated coverage about elections and Ebola in Sierra Leone and slavery in India and is working on new projects that give voice to people living with dementia and those who are homeless. Created with money raised through the crowdfunding site Indiegogo, Radar works to raise awareness among the public, policy makers, and service providers about issues affecting marginalized groups. The organization has helped place articles in The Guardian and the BBC.
- Tembinkosi Qondela, of Cape Town, South Africa, who founded Whizz ICT Centre, an organization that seeks to facilitate the use of information communication technology (ICT) tools for development efforts of the community in Khayelitsha, one of the largest and poorest areas of Cape Town, South Africa. Mr. Qondela observed that marginalization of poor people in the use of ICT and the lack of access to information perpetuates the inequalities and poverty that face most young South Africans. Whizz ICT runs a center which gives young people access to computer training, other ICT related services and training in a range of income generating skills. To date Whizz ICT has provided training to over 1000 youth.
The names and brief profiles of the other six honorees are available on SXSW's website. We congratulate them all.
Wednesday, March 11, 2015
Study Finds Combination of Employment and Income Policies, New Tax Credit, Could Cut NYC Poverty Rate
I just came across this 116-page report commissioned by the Federation of Protestant Welfare Agencies, Catholic Charities of the Archdiocese of New York, and the UJA-Federation of New York titled How Much Could Policy Changes Reduce Poverty in New York City? The report was actually prepared by the Urban Institute. According to the report, a combination of employment and income policies, in-kind benefits, and a new tax credit could significantly reduce the poverty rate in New York City, where 20 percent of all residents currently live in poverty.
Giving a summary of the report, the Philanthropy News Digest states that
the report . . . analyzed the potential impact of a transitional jobs program, increased earnings supplements, a $15/hour minimum wage, increased Supplemental Nutritional Assistance Program benefits, more housing vouchers, guaranteed childcare subsidies, and a tax credit for non-working seniors and people with disabilities. Among the individual policy options, the study found the jobs program likely to be most effective (assuming that 50 percent of the unemployed living under the poverty line participate), reducing the poverty rate from 21.4 percent to an estimated 15.9 percent, followed by the tax credit for seniors and people with disabilities, a $15/hour minimum wage, and increased SNAP benefits.
The combined effect of multiple policy options, however, would be far greater, the report argues. Based on an analysis of three scenarios, the study found that even the least extensive combination — increased SNAP benefits, Earned Income Tax Credit, and childcare benefits; the tax credit for non-working seniors and people with disabilities; and 25 percent participation in the transitional jobs program at $9/hour but no change in the minimum wage or housing subsidies — would nearly halve the city's poverty rate to 12.1 percent. In the scenario with the most extensive combination of policy options, including 50 percent participation in the jobs program at a minimum wage of $15/hour, Paycheck Plus earning supplements, and housing vouchers for half the people on the waiting list, the poverty rate would fall by more than two-thirds, to 6.7 percent.
The study also found that the most effective individual policies, the jobs program and the tax credit, were the most expensive, and that total costs for the combination of policy options was estimated to range from $6.5 billion to $9.1 billion. While the costs are substantial, the report concludes, the analysis shows "that a package of policies can greatly reduce the number of people living in poverty," with potential long-term effects "that differ from those in the short run, especially if less near-term poverty helps more of today’s children avoid poverty in adulthood."
Monday, March 9, 2015
I have always found it troubling when people donate to charity but the donees receive a very small share of the donation. And yesterday's Orange County Register published a story about such a practice, a story that made me see, well, not orange, but red. According to the Register, in 2013, the for profit firms that raise money for charities collected $361.3 million from well-meaning Californians and pocketed $161.2 million, or 45.4 percent, of the take, this according to the latest figures from the Office of the Attorney General. Incidentally, those figures were better than those for 2012, when the for-profit firms pocketed 63 percent of the money raised in nonprofits' names.
California Attorney General Kamala Harris has bemoaned "the alarming extent to which charitable donations are often diverted to for-profit companies." However, Assemblywoman Jaqui Irwin, D-Thousand Oaks, noted that at least the trend seems to be going in the right direction (i.e., from 63 percent last year to 45.4 percent this year). Meanwhile, here's an interesting statistic: "generally speaking, charities with the words 'police' or 'firefighter' in their names kept less than one-third of what was raised on their behalf, with the overwhelming majority going to the for-profit fundraiser," reports the Register.
The Register continues:
In their defense, officials said some campaigns costing millions were strategic investments that will pay off far more than they cost, in future contributions.
Others, however, are run-of-the-mill, we-need-your-money-now-please affairs, where for-profit firms kept huge chunks of what donors believed would fund good works.
Charities often argue that it’s not really money out of their pockets, since professional fundraisers take a percentage of proceeds, or a pre-determined amount if a minimum is not met, said Sandra Miniutti, vice president of Charity Navigator, a nonprofit watchdog.
“However, from a donor’s perspective, that argument does not hold, since it is actually the donor’s money that is going to a professional fundraiser as opposed to the charity they thought they were supporting,” Miniutti said by email. “In large part, it is still professional companies taking advantage of the lack of education on the giving public’s part.”
And that’s why the Attorney General’s Office started gathering these numbers to begin with.
Well, I hope the Attorney General's Office can use these numbers to do something to change this sad situation.
OK; I'll admit it: my heart is breaking as I write this blog. I was Orange before I stepped foot on the SU campus, remained Orange while I was a student there, and am still Orange. And now my Orange pride has taken a hit. All weekend long I've been hanging my head in shame as the TV stations have kept repeating the news over and over: "The NCAA suspended Syracuse University basketball coach Jim Boeheim on Friday for nine Atlantic Coast Conference games and took away scholarships after a lengthy investigation of the school's athletic programs."
I've been trying to figure out just what happened. What did Boeheim and my alma mater do? I'll let Reuters tell the story:
Syracuse discovered and self-reported 10 violations, over an eight-year period dating to 2001, that primarily involved men’s basketball but also football, the NCAA Committee on Infractions said.
Those infractions included academic misconduct, extra benefits, failure to follow the school's drug testing policy and impermissible booster activity.
"Over the course of a decade, Syracuse University did not control and monitor its athletics programs," the committee said in a statement, "and its head men's basketball coach failed to monitor his program."
Boeheim's suspension will cover the first nine ACC games of the 2015-2016 season.
The National Collegiate Athletic Association's penalties include five years' probation, financial penalties, and a reduction of three men’s basketball scholarships per year through 2018-19.
Also Syracuse will vacate all wins in which ineligible men's basketball students played in 2004-05, 2005-06, 2006-07, 2010-11 and 2011-12 and all wins in which ineligible football students played in 2004-05, 2005-06 and 2006-07.
Boeheim, a Hall of Famer who has been the Syracuse head coach since 1976, won 135 games in those five seasons and 108 of those wins will be wiped out.
Say what? One hundred and eight wins erased? Treated like losses? How is that possible? Well, I guess the games are being forfeited after they were played and won! And in addition to that, Syracuse must return to the NCAA all money it received through the former Big East Conference for its appearances in the 2011, 2012 and 2013 NCAA Men's Basketball Tournament.
I'll be honest: I find these sanctions harsh -- and not only because Syracuse is my alma mater. These sanctions are saying to me, "Let us pretend that Syracuse did not play basketball in 2011, 2012 and 2013." That doesn't make much sense.
On the other hand, I find one sentence of the report of the NCAA Committee on Infractions troubling:
- Two staff members completed course work for an academically ineligible student "when the school was under investigation for other potential violations."
I have a problem with that. That was dishonest. It was wrong.
Not surprisingly, Chancellor Kent Syverud is not amused. According to the Chancellor, "Syracuse University did not and does not agree with all the conclusions reached by the NCAA, including some of the findings and penalties included in [the] report. However, we take the report and the issues it identifies very seriously, particularly those that involve academic integrity and the overall well-being of student-athletes."
There is much talk about an appeal by Boeheim and an appeal by Syracuse. I guess this is not over. Stayed tuned for the next installment.
Philanthropy News Digest reports that L'Oreal Paris has announced a Call for Nominations for the 2015 L'Oreal Paris Women of Worth awards, an annual program designed to honor women making a "beautiful difference" in the world through voluntarism.
According to the Digest,
Since 2006, the program, in partnership with Points of Light, has recognized eighty inspiring women who have selflessly devoted themselves to causes at the local and national level and motivated others to get involved. Past honorees have been involved in a range of important causes, from advocating for victims of childhood abuse and mentoring homeless children, to helping break the cycle of poverty and empowering teens with disabilities.
As regards the current Call for Nominations, the Digest states that this year, "ten women will be awarded $10,000 each and one woman will be named the national honoree and receive an additional $25,000 to further her charitable efforts. All ten honorees will be recognized in December at a star-studded awards ceremony hosted by L'Oreal Paris in New York."
Complete program guidelines, information about previous recipients, and nomination instructions are available at the Women of Worth website.
Friday, March 6, 2015
The Chronicle of Philanthropy reports that proposed legislation in California would impose greater disclosure requirements on charity fundraisers. Explains the article:
California law requires "commercial fundraisers" to include a disclosure in charity solicitations whenever a portion of a donor’s charitable contributions will go to a for-profit company. However, some fundraisers have skirted that requirement by establishing their operations as "fundraising counsel" instead of "commercial fundraiser."
According to the story, the bill, sponsored by California Assembly member Jacqui Irwin and supported by California Attorney General Kamala Harris, would impose the transparency requirement on “all for-profit companies involved in fundraising for charities,” and would also lengthen to 10 years the statute of limitations applicable to particular offenses relating to "the exploitation of charitable assets." The article states that a recent attorney general’s report has found that “an average of 54.6 percent of funds raised through campaigns conducted by commercial fundraisers in the state in 2013 went to the charities.”
Wednesday, March 4, 2015
The Los Angeles Times is running a piece that calls into question the creation and use of charitable nonprofits by political leaders to raise money funding activities that accomplish the leaders’ agendas. The focus of the article is the charity established by Los Angeles Mayor Eric Garcetti, the Mayor’s Fund for Los Angeles. There is no allegation that the fund is intervening in political campaigns or otherwise unlawfully influencing the political process. The concern is that big donors to the fund can obtain influence by supporting the Mayor’s pet projects. The story explains:
The contribution is one of dozens the Mayor's Fund has received, from companies with a stake in City Hall decisions and from charitable foundations, according to records reviewed by The Times. Modeled on similar nonprofits in New York and other cities, the fund provides a financial boost for civic programs — as diverse as environmental initiatives and summer jobs for thousands of inner-city kids — that might otherwise fall victim to city belt-tightening.
But the nonprofit, which took in about $5.2 million between its formation in June and last month, can also offer a discreet destination for special-interest money that is not subject to campaign finance restrictions. City law caps contributions by individuals or businesses at $1,300 per election for mayoral candidates. By contrast, the average donation to the Mayor's Fund has been $111,000.
According to the Times piece, “Garcetti's fund has benefited from donations of as much as $1 million from prominent charities as well as manufacturing, engineering, telecommunications, software and financial firms, or foundations linked to those companies.” The Times also reports that “some donors to the fund said they had enjoyed one-on-one meetings with the mayor and dinner receptions at his official residence.” The mayor, for his part, is reported to have insisted that “he keeps his distance from the organization's operations and that donors are dealt with by the nonprofit's staff.”