September 2009


Wednesday, September 30, 2009

Gender Gap in Nonprofit Leadership Narrowing

The 2009 GuideStar Nonprofit Compensation Report shows that the percentage of female CEOs running nonprofits continued to increase through 2007, although the pace has slowed.  47% of nonprofit CEOs were women in 2007, compared with 46% in 2006 and 41% in 2005.  Additionally, 56% of nonprofits with annual expenses of less than $1 million are run by females, an increase of one percent from the previous year and six percent from 2005.  The percentage of women running nonprofits with over $1 million in expenses remained more stagnant at 36% for 2007 and 2006, increasing from 34% in 2005.

A Private Brooklyn Foundation Goes Public to Support the Borough

The Independence Community Foundation, the largest Brooklyn based private charity, is changing its tax status to allow it to raise money in addition to its $50 million endowment.  The charity, which will rename itself the Brooklyn Community Foundation, will be the first major public charity to focus all of its grants on a single borough of New York City.  Currently, New York State leads the country in philanthropic giving, with over $5 billion in donations annually, but 90% of New York City area charitable giving goes to Manhattan.

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Monday, September 28, 2009

Senator Baurcus Proposes Limit to Charitable-Deductions

Senator Max Baucus, the chairman of the Senate Finance Committee, proposed limiting the charitable tax deduction for wealthy Americans to 35%.  While less drastic than the cut to 28% proposed by President Obama, many nonprofits fear that any decrease in the tax deductibility of charitable donations will reduce donations at a time when nonprofits are already struggling.

Nonprofit CEO Salaries Rise in 2008

According to a survey by the Chronicle of Philanthropy, the highest paid CEOs in the nonprofit world saw in increase in their salaries in 2008.  Stacey Palmer, an editor at the Chronicle of Philanthropy, argued that most of the salaries were set before nonprofits began feeling the effects of the recession.  Topping the list of questionably high compensation was $2.1 million for the director of the Museum of Modern Art in New York; $2.7 million for the head of a health care group in Boston; $1.3 million for the president of New York University.

AIDS Charity Under Federal Investigation

Let’s Talk, Let’s Test Foundation received $3 million from the Illinois legislature last year, and now the state health department is questioning how the charity spent $523,545.  The questionable expenses include five-figure bonus payments and a skybox at a college football game.  Federal authorities are also investigating $3,273 in campaign contributions from three employees, two of whom received five-figure bonuses, to the charity’s founder, State Rep. Connie Howard.  The organization’s tax exempt status was revoked in Illinois after it failed to report its 2008 finances, and the foundation is now $950,000 in debt.

Gates Foundation Adds PRIs to Investment Portfolio

The Bill and Melinda Gate Foundation is leveraging more of its $35.1 billion to charitable purposes through program related investments (PRIs).  After losing 20% of its endowment in the financial crisis, the Gates Foundation was forced to rethink its investment strategy, which was previously focused solely on profit maximization.  PRI’s are investments expected to turn a profit while still serving a purpose related to a charitable program of the foundation. The Gates Foundation has loaned $40 million to companies increasing  banking services and microcredit in Africa and Asia and is considering a plan to guarantee US students loans.

President Obama has just nominated Daniel W. Yohannes to be the new Chief Executive Officer of the Millennium Challenge Corporation.  Mr. Yohannes is a native of Ethiopia and is currently the President and CEO of M&R Investments, LLC, a private investment firm operating in real estate, financial institutions, and green energy sectors.  From 1977 to 1992, Mr. Yohannes worked for Security Pacific Bank, after which he was hired as the CEO of US Bank, were he oversaw the banks growth in assets from $2 billion to $9 billion by his departure in 1999.  He also served as Vice Chairman of U.S. Bank for the Commercial Banking Group, Consumer Banking Group and as Head of Integration for Community and Public Affairs.

InterAction, an alliance of US based international NGO’s commended Obama for the nomination in a press release, but also reinforced the need to nominate an Administrator for USAID.


Monday, September 21, 2009

Muslim Charities Seeks Accreditation to Ease Terrorism Fears

Muslim Americans are looking to accreditation organizations in order to ensure that their Zakat is not spent on charities with real or perceived ties to terrorist organizations.  Muslim Advocates and the Muslim Charities Accreditation Program advise Muslim nonprofits on the best ways to ensure transparency and accountability.  Both organizations also advise donors on the best ways to ensure their donations are spent according to their wishes.

Federal Appeals Court Strikes Campaign Finance Rule

In Emily’s List v. FEC, the federal appeals court for DC struck down a campaign finance law that put a $5,000 cap on the amount of money that a 527 (a name given to the organizations by the section of the tax code that regulates them) could spend in an attempt to influence a federal election.  The court found that the cap on expenditures violated the First Amendment Rights of the Emily’s List, a 527 organization that promotes pro-choice female candidates for office.  The campaign finance cap was put into place after to 2004 presidential election when 527 organizations such as Swift Boat Veterans for Truth and MoveOn.org were criticized for their heavy campaigning.

Friday, September 18, 2009

Nonprofit Hospitals Dodge One Bullet in Baurcus Health Bill

Nonprofit hospitals are breathing a sigh of relief after hearing that Senator Baurcus’s America’s Healthy Future Act will not include provisions to tax nonprofit hospitals if they do not give a specific amount of charity care.  In recent months, there has been a push by Senator Grassley in the Senate Finance Committee to add such a tax to the health care reform bill.  The bill makes several other changes to nonprofit hospitals, requiring them to make periodic assessments of community needs, publicize financial information, limit the billing of patients receiving financial assistance, and ban certain “extraordinary collections actions.”  The burden of these requirements is debatable; the Wall Street Journal calls them “relatively benign,” while Reuters views them as an unnecessary burden.

Aid Workers and AU Troops Targeted in Somalia

On Thursday, two car bombs shook an African Union peacekeeping base in Somalia.  The bombs killed 21 people, including 17 aid workers.  Al Shabab has claimed responsibility for the attack.

Optional Air Line Fee to Fight Disease in Africa

Starting in January, you will be asked to donate $2 to a UN fund ever time you purchase an airline ticket online or at a travel agency.  The proceeds of the donations will be given to UNICEF, the Clinton Foundation, the Gates Foundation, and other international NGO’s working to end HIV/AIDS, malaria, and tuberculosis in Africa.  The program is expected to eventually raise $1 billion a year and have an administrative cost below 5%.

Microfinance Loan Officers Facing Violence in India

Microfinance loan officers are becoming the target of violence as they do their daily rounds collecting cash from borrowers across several villages.  The officers are usually easy to spot, wearing a bag with the bank’s logo and typically come at a specific time each week, making them an easy target for criminals.  Microfinance institutions are seeking ways to eliminate cash transactions in order to protect their officers, but are being met with resistance from the Reserve Bank of India.

Wednesday, September 16, 2009

Taliban Supports Red Cross Polio Immunization

The Taliban issued a letter of support to the International Committee of the Red Cross (ICRC) prior to a three day Polio vaccination drive in Afghanistan.  The ICRC is hoping to vaccinate one million children in the drive, which ends today.  As of yet, there have been no reports about violence against those giving out the vaccinations, even while operating in some of the most dangerous regions in the country.

Gates Foundation Grants $35M to Bank Serving the Poor

The Gates Foundation is giving a $35 million dollar grant to the Alliance for Financial Inclusion (AFI).  The AFI is a coalition of banks in developing countries that focus on providing financial services to those who earn less than $2 a day.  So far this year, the Gates Foundation Financial Services for the Poor initiative awarded $42 million in grants apart from in addition to this one.

How Foundations Can Promote The Needs of Minorities

Robert Ross of the California Endowment wrote an opinion piece in the Chronicle of Philanthropy discussing the best ways for foundations to promote the needs of minorities.  Mr. Ross faced tough questioning last year after opposing a proposed California law that would require private foundations to report information about the race and ethnicity of all their grantees.  Mr. Ross acknowledged that there were problems with diversity in foundations but stated that “the answer doesn’t necessarily lie in adding check boxes for race and ethnicity to our grant applications.”  Instead, Mr. Ross has focused on improving the policies of the California Endowment to further promote the interests of minorities.

Monday, September 14, 2009

Nonprofits Ignored in Health Care Debate

Nonprofit groups were hoping that the president would address the issues of nonprofit employers during his recent health care speech to Congress, but were disappointed to hear nothing from him.  The main bill in the House gives a tax credit to small businesses who provide health insurance for their employees, but nonprofits do not pay taxes and thus do not benefit.  Tim Delaney, the chief executive of the National Council of Nonprofit Associations met with Congressman, saying afterwards that “we heard a constant refrain: ‘Gee, we never thought about nonprofits as employers before.”

Police Close Three Microfinance Firms in Uganda

In an effort to curb the rise of illegal microfinance banks, the police of Uganda have closed down three microfinance institutions that are believed to have defrauded thousands of people.  Police raided the offices of the banks and arrested officers working there while investigating allegations of missing funds.

Recession Drives Up United Way Overhead Ratio

The Salisbury Post published an article on the overhead costs of the Rowan County United Way.  The percentage of funds used on fundraising and administration went from 7.7% in 2007 to 12.7% in 2008.  According to the United Way, revenue fell $600,000 in 2008 while administrative and fundraising costs rose just over $50,000, creating the sharp increase in the percentage of funds needed to cover overhead costs.

EU Demands Reform Before Halting Sanctions on Zimbabwe

On Sunday, the EU said that it will not remove sanctions against Zimbabwe until the power sharing agreement between Mugabe and Prime Minister Morgan Tsvangirai is fully implemented and the human rights situation improves.  The sanctions freeze Zimbabwean assets in Europe and ban 203 government officials from European travel, but do not prevent humanitarian assistance from entering the country.  Hours prior to a meeting with EU officials on Friday, Mugabe called the Western nations “neocolonists” who will “never be our friends.”

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