May 30, 2009, 08:32 AM ET

Are Charity Leaders Ignoring a Spike in Nonprofit Fraud?

The recession has brought a variety of ills to the nonprofit world, and one that may be going overlooked is an increase in fraud — theft, embezzlement, and other financial skullduggery.

“Desperate employees and board members are doing desperate things at an alarming rate,” writes Gary Snyder, a nonprofit consultant, on the “Keeping a Close Eye” blog run by the National Committee for Responsive Philanthropy, a watchdog group in Washington.

Mr. Synder runs the Nonprofit Imperative, an online newsletter that tracks charity fraud, and he reports that March of this year saw the “largest amount of misdeeds ever”—a 63-percent increase in instances of fraud at nonprofit groups over March 2008. (See a Chronicle article on how charities can deal with fraud problems.)

Those findings appear consistent with the broader trends reported by the Association of Certified Fraud Examiners, a trade ...

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May 29, 2009, 05:39 PM ET

The Right, and Wrong, Questions for Donors to Ask of a Charity

A recent article in The Wall Street Journal with advice for donors on “smarter giving” got it mostly all wrong, says Saundra Schimmelpfennig, a former nonprofit employee who is writing a book about the failings of foreign aid.

Ms. Schimmelpfennig says on her blog that three questions the article recommends donors ask of charities “perpetuate poor donor practices.”

She says inquiring about a charity’s administrative costs isn’t the right question, because overhead expenses are necessary to help a charity function effectively. Instead, donors should ask for a copy of the nonprofit group’s most recent audit.

“Even if you do not understand the audit, this will tell you whether the aid agency does yearly audits and whether they are willing to share financial information,” says Ms. Schimmelpfennig.

The Journal article further suggests asking about a charity’s challenges and...

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May 29, 2009, 04:39 PM ET

The State of Chinese Philanthropy a Year After the Killer Quake

A year ago an earthquake that killed over 85,000 people hit China’s Sichuan Province. The devastation elicited an unprecedented philanthropic response within China with more than $10-billion donated and some 100,000 volunteers pitching in to help.

Has this giving been sustained and has Chinese philanthropy been bolstered by the tragedy?

The answers appear to be mixed, according to a recent Public Radio International program that examined those issues.

Philanthropic donations within China for the first quarter of this year were only a fraction of the giving recorded in the same period a year earlier—and that was before the earthquake. The economic downturn can be blamed for much of this but the program says, “another reason could be skepticism about how the earthquake money was spent.”

Volunteerism does appear to be stronger now, the program reports, as the Olympic Games in...

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May 28, 2009, 12:42 PM ET

Does America Need a 'News Corps'?

To make sure journalism continues to serve as democracy’s watchdog while the newspaper industry makes difficult changes, an organization similar to Teach for America is needed to recruit, train, and deploy a new generation of reporters, writes Ken Doctor, the former managing editor of St. Paul’s Pioneer Press, in Minnesota.

On his blog about journalism, Content Bridges, he suggests that big foundations establish a “News Corps” that would support 1,000 young reporters, who would earn $35,000 a year.

“That’s a tab of $35-million a year, a paltry sum by many measures and one that could be funded by a consortium of foundations to keep it free of government taint. News organizations, start-up and legacy, could apply for positions, promising mentorship, learning, and engagement,” he writes.

The group would seek to get college graduates as excited about journalism as Teach for...

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May 28, 2009, 12:34 PM ET

Do Online Fund-Raising Contests Squeeze Out Foreign Charities?

Epic Change, a charity raising money for a school in Tanzania, is a finalist in one of a mushrooming number of contests that enable Web users to vote for nonprofit groups. But Stacey Monk, its founder, sees a big challenge: the lack of Internet access for would-be voters in Tanzania.

“Many haven’t used the Internet before; most don’t have e-mail accounts; English is a second language,” she writes on the organization’s blog.

Given such obstacles, do Web contests disadvantage charities in places other than the United States and Europe?

Nathaniel Whittemore, who blogs on social entrepreneurship at Change.org, says yes, and he examines some other limitations of online fund-raising contests.

While Mr. Whittemore sees competitions as a positive trend overall, he says they don’t necessarily reward groups that are making the most difference. “To the extent that people are willing ...

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May 27, 2009, 11:29 AM ET

How Women Approach Philanthropy Differently Than Men

A growing number of scholars have documented the different approaches that women take to philanthropy compared with men. Writing on the Tactical Philanthropy blog, Sara Hall of New Philanthropy Advisors, summarizes some of the recent studies and then adds her own thoughts.

Swanee Hunt, a philanthropist and the co-founder of Women Moving Millions, says in a recent article that female donors are more likely to want to build relationships with beneficiaries and other donors.

Alice Eagly of Northwestern University, in a study of how gender differences influence leadership styles, said that women are more likely to want to serve as mentors and coaches, writes Ms. Hall.

Ms. Hall lists six traits she believes characterize female philanthropy. Among them: women often come to their cause through personal experiences; they like to build ties among grant makers, nonprofit groups,...

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May 26, 2009, 12:06 PM ET

Scholars Butt Heads Over Foreign Aid

Two experts in foreign aid are debating how to best help poor people in Africa and developing regions of the world — and the public spat is turning more personal.

Jeffrey D. Sachs, director of Columbia University’s Earth Institute, and William Easterly, a professor of economics at New York University, have been butting heads for several years and recently exchanged barbs on The Huffington Post, an online newspaper.

Speaking about Mr. Easterly and another aid critic, Mr. Sachs writes: “Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help.”

Mr. Easterly returns fire, calling Mr. Sachs “the world’s leading a...

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May 26, 2009, 11:20 AM ET

Should Nonprofit Groups Advertise More?

Some of the nation’s most prominent brands exist, in part, because they have spent billions to advertise their names and products.

Nonprofit groups, however, are not among the big spenders in the advertising world.

And that is selling their missions short, Dan Pallotta writes on Free the Nonprofits, a blog on Harvard Business Publishing’s Web site

“Charity goes without this function with respect to the mass market; in part because of a reactionary disdain for anything that smacks of commercialism, but mostly because of public pressure to maximize short-term program spending without regard for building scale or long-term problem-solving,” Mr. Pallotta writes. “Donors consider paid advertising wasteful.”

Collectively, American companies, nonprofit groups, and other entities spend about $730-billion on marketing and advertising, writes Mr. Pallotta, the author of Uncharitable: How ...

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May 22, 2009, 12:07 PM ET

The Costs of Rating Charities on Overhead Expenses

Saundra Schimmelpfennig, a former aid official, takes aim at a popular target: the fixation in the charity world on administrative costs.

Ms. Schimmelpfennig, who is writing a book on how aid can sometimes cause more harm than good, describes some of the ways that rating charities based on their overhead costs hurts aid work.

Doing a study to investigate a community’s needs before beginning work is expensive — and increases a charity’s administration costs. So charities are reluctant to share needs assessments, because they don’t want to take a financial hit while their competitors do not.

As a result, charities after the 2004 tsunamis either had to pay for their own, duplicative assessments or begin work without determining needs. The consequences? An aid group built an orphanage in a town that had virtually no homeless orphans, whereas in another town four charities competed...

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May 22, 2009, 11:59 AM ET

Moral And Political Roles of Grant Makers

Is philanthropy the moral voice of society? Should foundations hold governments accountable to the public?

Bradford K. Smith, president of the Foundation Center, a research group in New York, said he and colleagues pondered these questions at the recent European Foundation Centre meeting in Italy.

On the center’s blog, Philantopic, he writes that there was a slight transatlantic difference of opinion on the propositions. But, he adds, the conference offered a good example of when foundations should stand up and speak out.

In response to controversial immigration policies in Italy, European grant makers issued a statement emphasizing the need for nations to respect the human rights of immigrants. (Read The Chronicle’s article about the decision.)

Mr. Smith applauded the move.

“Alarmed by growing xenophobia in Europe, they chose to take a stand that was both moral and...

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