Earlier this week, we blogged about a letter from three prominent organizations strongly refuting the use of overhead costs to measure a nonprofit’s effectiveness. But, in seemingly direct contradiction to this letter, a new Oregon law requires that nonprofits spend no less than 30% of their total annual expenses on charitable programs. Worst of all, …
Posts Categorized: News
Nonprofit Grading System Based on Overhead Cost a Thing of the Past?
Is looking at a nonprofit’s overhead costs a good measure of its effectiveness? The leaders of three leading sources of nonprofit information – GuideStar, Charity Navigator, and BBB Wise Giving Alliance – recently wrote an open letter answering this question with a resounding NO. The letter reasons that focusing solely or predominantly on overhead(the expenses …
NY AG Spearheads Heightened Political Disclosure Requirements
Last year, New York Attorney General Eric Schneiderman unveiled a plan to “revitalize” New York’s nonprofit sector. We told you about it here. This year, he has a new focus – 501(c)(4) “social welfare” organizations. This isn’t too surprising given the press these organizations have received lately, but the high level of transparency the AG’s …
America's Most Wanted: Charities Edition
The Tampa Bay Times recently ran a series on what it and The Center for Investigative Reporting describe as the nation’s 50 worst charities. These include nonprofits whose fundraisers earn up to 98% of every dollar earned and whose insiders make millions of dollars per year. The articles also admonish charity regulators for not doing …
Legal Discrimination and Boy Scouts' End of Ban on Scouts
Did you know that most nonprofits can legally discriminate? According to the Supreme Court, the tax laws that recognize tax-exemption allow 501(c)(3) and other exempt organizations (other than schools) to selectively provide their services to only certain groups of individuals. For example, in Boy Scouts of America v Dale, that court ruled that the First …
Hershey Trust Settlement Shocks Many, Has a Lesson for All
Two years ago, the Pennsylvania Attorney General began an investigation into the $9 billion Hershey Trust, which operates a prominent residential facility for disadvantaged youth. The investigation started after the trust made multi-million dollar purchases of a golf course and an adjacent market. Allegations of inappropriate expenditures followed, claiming that board members received excessive compensation …