Buyer beware

By Todd Cohen

Charities protest too much.

With lawmakers and regulators moving to be tougher cops, charities claim they can police themselves.

But at least 15 private foundations have kept on their boards individuals accused or convicted of corporate fraud, a new report says.

Those foundations’ decisions, and the “utter lack of objections to these decisions by the sector’s leadership,” says the report by the National Committee for Responsive Philanthropy, “show that many in the sector are not up to the challenges of repairing the harm of today’s foundation accountability.”

Federal regulators, who can keep people from leading publicly traded companies, also should be able to keep people from leading foundations and nonprofits, says the report, “Serving time…on foundation boards.”

Unlike for-profit firms, it says, foundations have no shareholders to provide oversight or oust leaders.

So government should “make sure that foundations are using and managing their resources effectively and legally,” the report says.

The foundation world itself also must steer clear of “felonious philanthropists,” the report says, and kick them out when they sneak in.

Wanting their expertise, charities like corporate big shots on their boards.

But as the report warns, charities also can suffer from those big shots’ bad habits.

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