Nonprofit Law Prof Blog

Confidence in Charities Remains at Contemporary Lows According to Brookings Report

A report issued by the Brookings Institution finds that Americans' confidence in charities has not recovered from low levels reached after the American Red Cross Liberty Fund controversy in the wake of 9/11.  Authored by Paul C. Light and based on a survey conducted on behalf of the Organizational Performance Initiative at New York University's Robert F. Wagner Graduate School of Public Service, the report made the following findings based on responses in March 2008:

Confidence in Charitable Organizations:  34 percent of Americans stated they have "not to much" confidence in charitable organizations or "none at all," essentially equal to the percentage with that response in September 2002; responses for Americans who had a "great deal" (16 percent) or a "fair amount" (48 percent) of confidence in charitable organizations also remained essentially unchanged from September 2002 although there was some variation in the intervening period

Helping People:  only 25 percent said charitable organizations did "very good" in helping people, a drop of 9 percent from October 2003

Spending Money:  70 percent stated that charitable organizations waste "a great deal" or a "fair amount" of money, an increase of 10 percent since October 2003

The report concludes that the surveys suggest three options for rebuilding confidence in charitable organizations: improving administrative systems to manage money wisely; promoting the charitable sector's commitment to helping people, as opposed to just leaving it to individual groups to promote themselves; and demonstrating progress toward solving the problems that marginalize certain segments of society.

(hat tip: Tax Prof blog)

LHM

State Court Removes Museum Board for Breach of Fiduciary Duties

The New York Times reports that the Montana Supreme Court dismissed the board of the Charles M. Bair Family Museum.  According to the court's opinion, Alberta M. Bair caused the creation of the Charles M. Bair Family Trust upon her death in 1993.  Her estate funded the trust with assets then worth approximately $23.5 million, including her personal residence which the trust agreement stated should be used to establish the Charles M. Bair Family Museum.  The agreement also made the First Trust Company of Montana, since succeeded in interest by U.S. Bank,the sole trustee, but granted the exclusive authority to make charitable distributions from the trust's income to a Board of Advisors.  The five-member Board consisted of the president or president's nominee of the First Trust Company of Montana, of the First Bank in Billings, and of the Billings' law firm of Moulton, Bellingham, Long & Mather, P.C., with the other two members to be appointed by the trustee from three local counties.

Under the direction of the Board of Advisors, the Museum opened to the public in 1996 with a collection of unique Native American Art, European furniture and other items, Edward S. Curtis photographs,  and various paintings and watercolors by noted artists.  The first year saw over 14,000 visitors, but by 2002 the number of annual visitors had declined to slightly over 4,000.  The Board therefore decided to at least temporarily close the Museum pending a review of its continuing operations.  A group of local residents, the Friends of the Bair, objected to the continuing closure of the museum and when the trustee sought court guidance in 2004 regarding the authority of the Board under the trust agreement, Friends of the Bair successfully intervened in the case that eventually made its way to Montana Supreme Court.  The Attorney General also eventually intervened in the case.  While the case was pending, the Board decided to permanently close the museum based on its claim that continuing to operate the museum was not feasible.

The Montana Supreme Court, overruling a lower court decision, concluded that the primary purpose of the trust agreement was to establish the museum.  It also concluded that the Board breached its fiduciary duty to administer the trust with the care, skill, prudence, and diligence of a prudent person when it failed to pay for significant improvements to the Blair residence recommended by the museum consultants it had hired, when it failed to make funding the museum the first priority for the trust's income, and by deciding to close the museum.  The court ordered the trustee, U.S. Bank, to appoint two new Board members for the two Board positions over which it had appointment power, and the three presidents of the institutions named in the trust agreement to appoint nominees as Board members in their place.  The court also ordered the new Board to meet within six months of the decision and to take all necessary steps to comply with the trust agreement, as interpreted by the court.

LHM

Some Nonprofit Hospitals Asking for Cash Up Front

The Wall Street Journal reports that some nonprofit hospitals have adopted a payment policy used by many for-profit hospitals: requiring payments up front for patient care.  The hospitals are apparently responding to sharp increases in unpaid bills for patients who are not indigent but rather uninsured or underinsured.  While major for-profit hospital chains, such as Tenet Healthcare and HCA, have established policies of asking patients to pay before being admitted, it is unclear how far the practice has spread among nonprofit hospitals.  The focus of the story is a single hospital, the M.D. Anderson Cancer Center in Houston, and the experience of one chemotherapy patient there.  The article also cites a recent IRS report in which 14 percent of the 481 responding nonprofit hospitals stated they required either payment or making an arrangement to pay before providing inpatient services.  The IRS report notes in its methodological appendix, however, that the data it reports cannot be projected to the entire universe of tax-exempt hospitals because of certain data gathering limitations.  Nevertheless, the article continues the ongoing public scrutiny of nonprofit hospital billing practices.

LHM

What to Do With Extra Campaign Funds? Give Them to Your Charity

The New York Times reports that in December 2007 former U.S. Senator Robert G. Torricelli directed his now dormant campaign account to transfer $1.6 million in remaining funds to a charity he created.  The funds are left over from his 2002 re-election race, which he quit amid allegations of ethical misconduct.  The charity is the Rosemont Foundation, which Mr. Torricelli started last year to advance cancer research, open-space preservation, prevention of child abuse, and prevention of cruelty to animals.  The charity has not apparently announced any specific plans for using the funds.  Federal election law permits campaign committees to transfer extra funds to charities. 

LHM

Report on Fraud in Nonprofits - A $40 Billion Problem?

The Nonprofit and Voluntary Quarterly recently published a report on fraud in nonprofits authored by Janet Greenlee (University of Dayton), Mary Fischer (University of Texas at Tyler), Teresa Gordon (University of Idaho), and Elizabeth Keating (Harvard Law School and the Hauser Center for Nonprofit Organizations).  The report begins by noting that if an Association of Certified Fraud Examiners (ACFE) estimate that all organizations lose an average of 6 percent of their revenue to fraud each year, the fraud loss in the nonprofit sector would be approximately $40 billion.  The report then analyzes 2004 data on actual fraud cases at nonprofits reported by ACFE members and involving almost $30 million in losses.  Based on this review, it concludes with a series of recommendations for how nonprofits can protect against fraud, including strengthening internal controls, creating a board audit committee, improving board quality and oversight generally, better vetting and education of employees, and providing an easy means for employees and others to confidentially report suspected fraud.

(hat tip: Alice Thomas)

LHM

IRS Corrects Final Regulations on When Charity Status Will be Denied or Revoked

We previously blogged about the IRS' issuance last month of final regulations clarifying and providing examples of when revocation of tax-exempt status under section 501(c)(3) of the Internal Revenue Code is appropriate because of private inurement even when intermediate sanctions under Code section 4958 also apply.  The regulations also provided several examples of when an organization serves a private interest instead of a public interest and so provides a prohibited private benefit.  Yesterday the IRS issued the following corrections to three of the examples, one relating to private benefit and the other two to private inurement.  The full text of the corrections is provided below with the changed provisions show in bold and italics.  The most significant correction is the clarification that if a "principal," as opposed to the sole, activity of an organization serves private interests then the organization will not qualify for tax-exempt status under section 501(c)(3).  No guidance is provided, however, regarding how to measure whether a particular activity is a principal activity of an organization.

§ 1.501(c)(3)-1 [Amended]

Par. 2. Section 1.501(c)(3)-1 is amended as follows:

1. In paragraph (d)(1)(iii) Example 2. (ii), in the second sentence, the language "As a result, the sole activity of O serves the private interests of these artists." is removed and the language "As a result, the principal activity of O serves the private interests of these artists." is added in its place.

2. In paragraph (f)(2)(iv) Example 2. (iii), in the sixth sentence, the language "Beginning in Year 4, however, as O's exempt function activities grow, the size and scope of the excess benefit transactions that occurred in Year 3 become less and less significant as compared to the size and extent of O's regular and ongoing exempt function activities." is removed and the language "Beginning in Year 4, however, as O's exempt function activities grow, the size and scope of the excess benefit transactions that occurred in Year 3 become less and less significant as compared to the size and scope of O's regular and ongoing exempt function activities." is added in its place.

3. In paragraph (f)(2)(iv) Example 4. (iii), in the fourth sentence, the language "By adopting a conflicts of interest policy and significant new contract review procedures and by terminating C, O has implemented safeguards that are reasonably calculated to prevent future violations." is removed and the language "By adopting a conflicts of interest policy and new contract review procedures and by terminating C, O has implemented safeguards that are reasonably calculated to prevent future violations." is added in its place.

LHM

The Baby in the Bath Water - Further Fallout from New York City Council's Use of Nonprofits

We previously blogged about ongoing investigations into the funding of various nonprofits by the New York City Council.  The New York Post, which broke the original story about Council members using fictitious groups to store funds in order to avoid budget procedures, reports that the freeze subsequently imposed by the New York City Comptroller on all accounts tied to "member items" has left at least two apparently legitimate nonprofits short of funds.  Both the Incarcerated Veterans Consortium and the AIDS Community Research Initiative of America (ACRIA) reported that hundreds of thousands of dollars they had been expecting are caught in the freeze.  ACRIA's executive director stated that the group has already spent $650,000 of its own funds in anticipation of receiving a $1 million council grant that is now on hold and so faces a financial crisis, leading him to invoke the "throw out the baby with the bath water" metaphor.

LHM

Charitable Contribution Deduction and a Baseball Jersey

The TaxProf blog reports on the charitable contribution deduction issue raised by the recent auction of a #34 David Ortiz Red Sox jersey that a construction worked had buried in the concrete of the new Yankee Stadium in hopes of cursing the ballpark.  The Yankees have agreed to use the $175,100 closing eBay bid to benefit the Red Sox' Jimmy Fund, a charity that supports cancer research and care at the Dana-Farber Cancer Institute.   Further discussion of this issue can be found in a later post on the same blog.

LHM

ACLU Takes Over State Affiliate

The New York Times reports that the board of the American Civil Liberties Union voted overwhelmingly over the weekend to take over the management and operations of its South Carolina affiliate.  The decision apparently grew out of a decade of troubles at the affiliate, including financial difficulties, an empty executive director position, a divided board, and embezzlement by the last executive director.  The affiliate's board president and others asserted, however, that the take over instead reflected retaliation for the affiliate's private and public criticism of the national organization given that other affiliates with similar problems have not faced such an action. 

Pursuant to the ACLU's internal guidelines, its board president will appoint a receiver to develop a plan to reconstitute the affiliate, including hiring new leadership, finding new board members, and taking control of its assets.  The receiver may be a committee or an individual.  According to the ACLU's vice president, this is the first time that the ACLU will have a contested receivership.  Previous receiverships involved affiliates in Texas and Mississippi that voluntarily agreed to the process.

LHM

A New Endowment Trend? - Student Created and Managed

The Hartford Courant reports that the Wesleyan University student government has created an endowment to reduce and perhaps eventually eliminate the annual activity fee charged to students and used to fund student groups.  In what may be the first of its kind, the endowment will be managed solely by students, both with respect to its investments and its expenditures.  This will permit it to be more responsive both to student concerns about possible investments and to student demands for help with ever increasing high education costs.  That said, it will be many years before the endowment reaches a level where it will significantly reduce the $270 per student activity fee that provides approximately $750,000 a year.  The Wesleyan Student Assembly plans to begin funding the endowment with its current year surplus, estimated to be between $25,000 and $35,000, and to dedicate future surpluses to the endowment.  Expenditure of a small percentage will begin once the fund reaches $100,000 and increase to 4 percent per year once the fund passes $200,000.

LHM

New York City Council's Use of Nonprofits Questioned

The New York Times reports on the unfolding investigations of the New York City Council's funding for nonprofit groups.  It states the trigger for increased scrutiny from both city and federal officials was the revelation last month that the Council had been parking money that it would then spend outside of the normal budget process by using the names of fictitious groups.  Council members also appear to have funded nonprofits that are staffed by their aides and serve at least in part to pass city funds through to organizations chosen by those members. 

The article focuses primarily on "Libre" or the Latino Initiative for Better Resources and Empowerment Inc., which it linked to Council member Hiram Monserrate from Queens.  Libre is not registered with the New York Attorney General as a charity and has not filed a return with the IRS for at least two years, although its long-time Treasurer and now executive director said the required IRS returns would be filed by the end of May.  Libre claims to provide recreation and education programs as well as other assistance to Queens residents, but most of its expenditures appear to have been for rent, utilities, and printing.  It also has a city contract to distribute $32,000 to other community groups.

The article also cites the recent indictment of two aides to Councilman Kendall Stewart of Brooklyn.  The indictment alleges they embezzled $145,000 from a city-funded nonprofit group that they ran.  One city agency denied Councilman Stewart's request for funding for the group, named the Donna Reid Memorial Education Fund, when it noticed that it was based at the home of his chief of staff.  But another city agency approved a subsequent request for funds.

LHM

The Benefits and Risks of Small Nonprofits

The Times Union of Albany, New York has an interesting article about the legal and accountability issues raised by small nonprofits, often formed in the wake of a particular tragedy.  It cites numerous small nonprofits founded either to help a particular individual who is injured or missing or to help others in the memory of some specific person or tragedy.  It correctly states that the former type of nonprofit is not a charity under New York state law or eligible to receive tax deductible charitable contributions under federal tax law, but notes that such groups may still receive a significant number of donations because of sympathy for the individual who will be helped.  It also reports that many of these nonprofits are exempt from state or federal filing requirements because of their small size, limiting accountability for how they spend the funds they raise.

For example, it describes the Joshua Szostak Search Fund, created to help the search for a State University of Plattsburgh student who disappeared just before Christmas in 2007 and whose body was recovered from the Hudson River last week.  The fund did not claim charity status but according to Joshua Szostak's father, Bill Szostak, used the proceeds of two fundraisers to charter a helicopter, buy binoculars and other search equipment, and pay for various search expenses.  The fund is not registered with either the New York Attorney General or the IRS, and Bill Szostak declined to discuss how much it had received from donors.

The IRS will soon, however, be at least aware of the existence of even the smallest nonprofits if they claim exemption from federal income taxes because of the new requirement that such nonprofits file the Form 990-N, also known as the e-Postcard.  This form is due for the first time in 2008 for tax years ending on or after December 31, 2007.  More information about this requirement is available on the IRS website.

LHM

Unintended Consequences for Charities from State Smoking Bans

Yesterday I blogged about Minnesota's limits on charity raffle prizes.  A few days earlier, the New York Times reported on state laws that may have had a much more significant effect on charity gambling - indoor smoking bans that reach charity bingo games.  According to the article, in Minnesota alone charities saw revenues drop 13 percent in the fourth quarter of 2007, as compared to the same quarter of 2006, and half of the drop is estimated to be attributable to a new, statewide indoor smoking ban that took effect in October 2007.  On an annual basis that amounts to approximately $100 million in less revenue for charities that rely on charity bingos for a portion of their revenues.  The article cites evidence of similar drops for charity bingo participation in California, New Jersey, New York, and Washington State when statewide smoking bans went into place.

LHM

State Board Blocks Charity Raffle for Being Too Large

The St. Paul Pioneer Press reports that the Minnesota Gambling Control Board has blocked a proposal by the CLIMB Theatre, a section 501(c)(3) nonprofit theater company, to raffle off a $1.4 million house.  The Theatre had asked the Board to waive the the normal $100,000 annual limit on amounts raised by a single charity through charitable raffles.  The Theatre had hope to raise a total of $900,000 by selling $20 raffle tickets, with $200,000 going to the Theatre and the remaining $700,000 going to a variety of other nonprofit groups.  The article further reports that the Minnesota legislature is considering legislation to eliminate the $100,000 limit and to instead limit individual prizes to no more than $50,000 each, and that at least some Board members felt it would have been inconsistent to approve the proposed raffle when the Board had already expressed support for the new $50,000 prize limit.

This report highlights the importance of such gambling activities for many nonprofits.  For example, it notes that more than 1400 Minnesota nonprofit organizations raise income from raffles, bingo, and pull-tabs, and it is likely that this reliance is mirrored in other states.  For example, I recently discovered the local South Bend, Indiana chapter of the Fraternal Order of Police raised more than $3 million in a single year from bingo, although after taking accounts its bingo-related costs of $2.9 million it only had net revenues of approximately $100,000, according to its most recent IRS Form 990.

LHM

Ben-Ner and Ren Post Does Organization Ownership Matter?

Avner Ben-Ner (University of Minnesota's Carlson School of Management) and Tin Ren (a Ph.D. candidate at the same institution) have posted Does Organization Ownership Matter?  Structure and Performance in For-Profit, Nonprofit and Local Government Nursing Homes on SSRN.  Here is the abstract:

We compare the structure and performance of for-profit (FP), nonprofit (NP) and local government (LG) organizations. These organizations differ in their ownership structure, objectives and agency relations. We conjecture that, compared to NP and LG, FP firms (a) delegate less decision-making power to employees, (b) provide more incentives and fewer fringe benefits, (c) monitor less, and (d) rely less on social networks to recruit employees. We also hypothesize that, relative to NP and LG, FP firms (i) are more efficient, (ii) provide similar levels of service elements that observable to their customers, (iii) provide lower levels of less-well observable elements, and (iv) provide less of the relational elements. Differences in structure and performance are likely to be tempered by market competition and institutional pressures for similarity. Our empirical investigation of Minnesota nursing homes (utilizing state, federal and survey data) supports these hypotheses.

Interestingly, their findings appear to be similar to initial findings by other scholars, such as Jill Horwitz (University of Michigan Law School) in her article Does Nonprofit Ownership Matter?, 24 Yale J. Reg. 139 (2007) (SSRN version), that in the hospital field nonprofit institutions are qualitatively different from their for-profit counterparts with respect to such items as the mix of services provided.  The still open question for many considering these fields is whether this qualitative difference, if it exists, is sufficient in a quantitative sense to justify the legal benefits enjoyed by the nonprofit institutions such as federal income tax exemption, access to tax-exempt bond financing, and property tax exemption.

LHM

Benshalom Posts The Dual Subsidy Theory of Charitable Deductions

Ilan Benshalom (Visiting Assistant Professor, Northwestern University School of Law) has posted The Dual Subsidy Theory of Charitable Deductions on SSRN.  Here is the abstract:

Americans contribute billions of dollars to charities on an annual basis. Charitable contributions do not only represent American generosity, however; they also represent a form of giving that provides donors with tax relief. The current literature on charitable contributions suggests that this relief plays an important role in not only decentralizing the provision of public goods, but also in helping the non-profit sector provide public goods more efficiently than government spending. Even if these claims were indisputable, however, they are insufficient to justify the current scheme's anti-democratic function. This Article argues that, at their core, tax-subsidized contributions are part of a non-democratic mechanism that allows individual donors to direct public funds while bypassing majority approval. Despite their non-democratic attributes, this Article recognizes the virtue of charitable spending in voicing preferences not accounted for by the majoritarian process. Therefore, while the current literature suggests that charitable tax-relief represents a substance subsidy - by promoting the allocation of resources towards a confined set of legislatively enumerated public goods - this Article argues that it is also a process-subsidy that supplements the shortcomings of majority decision-making. This dual subsidy approach leads to the inevitable conclusion that current U.S. charitable tax relief scheme undermines the integrity of the majoritarian process, because it disproportionally subsidizes the process component of affluent taxpayers. To better reconcile with democratic theory, many of the scheme's attributes - e.g., tax-subsidies to corporate philanthropy - should be reconsidered and restructured. In raising this point, this Article opens a broader debate about the proper role of majority decision-making and efficiency claims in legitimizing democratic tax and spending decisions.

LHM

Announcing Call of Papers: University of North Carolina 12th Annual Tax Symposium

The University of North Carolina is organizing its twelfth annual symposium designed to bring together leading tax scholars from economics, accounting, finance, law, political science, and related fields. The symposium will be held in Chapel Hill on Friday afternoon and Saturday morning, January 23 & 24, 2009, and will be sponsored by the KPMG Foundation and the UNC Tax Center. The goal is to bring together scholars from different areas who share a common interest in current tax research. Previous conferences have been very successful, and we anticipate the same this year.

PAPER DETAILS:

Papers should be well developed, but at a stage where they can still benefit from the group's discussion. The symposium will include no more than six papers. Travel and lodging expenses for presenters will be reimbursed up to $500.

PAPER SUBMISSION PROCEDURE:

Please submit an electronic version of the paper no later than November 13, 2008 to:

CONTACT:   Professor Douglas Shackelford
Email:         MAILTO:doug_shack@unc.edu

Postal:        Kenan-Flagler Business School
                  University of North Carolina at Chapel Hill
                  Campus Box 3490, McColl Building
                  Chapel Hill, NC 27599-3490

Paper selection will be finalized by December 1, 2008.

AMT

Sam's Club and Costco Limit Rice Purchases: Is It Realy About the Global Food Shortage?

NPR "All Things Considered" and various newspapers (see, for example, L.A. Times) are reporting on the decision by Sam's Club and Costco to limit daily purchases of rice to its customers.  At Sam's Club, the limitation only affects bulk purchases of 20 lb. bags or more.  The bags are primarily purchased by the small business customers.  Both Sam's Club and Costco are membership-based organizations that make their money from membership dues mostly.  Very little profit is actually made on the sale of the items in the warehouse.  These are volume-based businesses, meaning low profit on large numbers of sales.  In addition, while there is a global concern about shrinking rice supplies, there is no deficit in the U.S. rice market.  In the NPR story, Greg Mathis, a representative of rice producers in the United States, stated that rice production in California and other areas greatly exceeds the demand for rice in the United States.  He stated that most of the U.S. production is exported.  Specialty rices, like Jasmine and Basmati, are a little different than long grain and short grain.  According to one of the articles, rices is consumed within 100 miles of where it is grown.  So with the exceptions of rices like Jasmine and Basmati (which are grown in Asian countries), most rice consumed in the United States is grown in the United States.

The stories about rice rationing by Costco and Sam's Club run the risk of sending a false impression to the marketplace, i.e., that there is a rice shortage in the United States.  Who benefits from such an impression?  For one, Wal-Mart benefits because it has refused to restrict access to rice in its main stories.  Also, small businesses that patronage these warehouse wholesalers may choose those warehouses that don't restrict access, or those do so in a more limited way.  In addition, the impression that there is a shortage is likely to lead to stockpiling by these very same small businesses so as to avoid higher rice prices in the future.  This last consequence will lead to increased sales for the warehouse wholesaler.  The reaction of Costco and Sam's Club likely leads to a circuitous result -- more sales for the warehouse giants having to no relationship to the actual global food crisis.  The NPR "All Things Considered" story suggests that both Sam's Club and Costco benefit by driving home the point to their loyal customers that both would rather absorb the loss (i.e., increase in cost of rice) than raise prices in the warehouse thereby protecting the profits of their customers.

See links for in depth coverage of the stories.  See related blogs about Global Food Crisis.

AMT

The Chronicle of Philanthropy Reports on Federal Efforts to Police Charities' Reporting on 990 Form

In an article today, the Chronicle of Philanthropy reports on the efforts of Senator Charles Grassley who, yet again, takes a close look at nonprofit accountability as he considers whether nonprofits who skip lines or misreport information on informational tax forms should face steep fines for doing so.  Below is an excerpt from the article:

Sen. Charles Grassley, the senior Republican on the powerful Finance Committee, says tougher penalties are possible if charities do not take steps to improve their reporting on the Form 990 informational tax return.

Mr. Grassley and his staff will be paying attention to what degree charities comply with upcoming changes to the Form 990. Many nonprofit groups will have to fill out an updated version of the form beginning in 2009.

Mr. Grassley said the new form — as well as the Pension Protection Act of 2006 — will make it easier for the public and the government to monitor the financial effectiveness of charities.

But, he said, more needs to be done.

“Time and again, problems at nonprofits come back to boards that aren’t independent or hands-on enough,” Mr. Grassley said. “Another challenge is making sure nonprofits are accurately reporting the amount of money going to their charitable purpose.”

The Chronicle further reports that, in addition to the steeper fines, "Congress could also revisit plans to calculate ratios that show how much of a charity’s revenue is used to fulfill its mission versus how much pays for executive salaries and fund-raising costs. "  The story also reports that, "Steven T. Miller, commissioner of the IRS’s tax-exempt and government-entities division, said, . . . at a conference . . . held by the Georgetown University Law Center Continuing Legal Education Department, that the IRS is still considering similar plans."

See Article for the full story.

AMT

UN Officials Warn of Global Food Crisis

Recently, the Washington Post reported that "[m]ore than 100 million people are being driven deeper into poverty by a "silent tsunami" of sharply rising food prices, which have sparked riots around the world and threaten U.N.-backed feeding programs for 20 million children, the top U.N. food official said.

Josette Sheeran, executive director of the World Food Program (WFP) said that, "[t]his is the new face of hunger -- the millions of people who were not in the urgent hunger category six months ago but now are."  She also said, as reported, that, "[t]he world's misery index is rising."

The article reports that Sheeran and other private and government experts were hosted in Londan at the 10 Downing Street offices of the British Prime Minister Gordon Brown who said that, "the growing food crisis has pushed prices to their highest levels since 1945 and rivals the current global financial turmoil as a threat to world stability."

The British Prime Minister also said that, "[h]unger is a moral challenge to each one of us as global citizens, but it is also a threat to the political and economic stability of poor nations around the world."  He further is quoted as saying, that "25,000 people a day are dying of conditions linked to hunger."

The article also reports that, "[w]ith one child dying every five seconds from hunger-related causes, the time to act is now." Brown pleged "$60 million in emergency aid to help the WFP feed the poor in Africa and Asia, where in some nations the prices of many food staples have doubled in the past six months."  Please see earlier blogs where mention has been made of the increasing pressure on nonprofits to meet the global food crisis with shrinking resoures in a recession economy were the U.S. dollar goes weaker by the day.

AMT