December 17, 2008
Investment Scheme Exposes Double Standard for Charities
The financial fraud allegedly perpetrated by the philanthropist and financier Bernard Madoff exposes an uncomfortable double-standard in the nonprofit world, writes Tom Belford, a fund-raising consultant.
While in recent years charities have faced increased scrutiny, in the case of Mr. Madoff, it was a donor — and how he invested the money of other donors — that should have been examined, he writes on his blog, The Agitator.
“Who’s supposed to be protecting the charities from the unscrupulous donors?!” Mr. Belford writes.
And while the Securities and Exchange Commission failed to investigate Mr. Madoff, “let one nonprofit emit an errant fart and grandstanding members of Congress and the IRS would be all over it (the nonprofit, that is) like ticks on a hound,” he says.
Read The Chronicle’s article about how Mr. Madoff’s alleged scam is threatening nonprofit groups. Read other nonprofit observations about the Madoff incident.
What do you think? What lessons can the nonprofit world learn from this? Click on the comments link to share your views.
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That’s what Prospect Researchers are for!!!
— laura - Prospect Researcher for Catholic Relief Services Dec 17, 02:18 PM #
I could not agree with Belford more!! I especially like his quote in the 4th paragraph; it should appear on the front page of the New York Times for all to see!
— Susan Dec 17, 02:49 PM #
That’s what boards of directors are for, too. Too many board members leave their brains at the nonprofit boardroom door.
— Philanthro Joe Dec 17, 02:51 PM #
Due diligence is never out of style. Donors are human beings and subject to all the flaws and temptations common to mankind. Yes, welcome them; cherish them; but check them out!
— Richard S. Thill Dec 17, 03:00 PM #
It is a nonprofit’s responsibility to ensure wise use of its financial resources, and that includes due diligence in researching donors and how funds are invested. This scenario actually validates the current call for greater regulation and oversight of the third sector.
— Benton Carson Dec 17, 09:24 PM #