Nonprofit news headlines – Week of 04.02.07

* United Way of America says choices made by its donors are leaving underfunded one of the charity’s fundamental missions, that of helping meet basic human needs, the Los Angeles Times reported March 27. About a quarter of United Way contributions are designated to donors’ favorite causes, usually in the arts and education, and this number has steadily increased since the early 1990s.

* Taxpayers and tax professionals “need to be better educated” about the rules for claiming charitable gifts on tax returns, but the IRS also could do a better job of enforcement, says a recent report by the Treasury Inspector General for Tax Administration, as reported in the Wall Street Journal March 28 [subscription only]. In particular, donors should be aware of changes in laws governing non-cash charitable contributions.

* The Smithsonian Institution’s top official, Lawrence M. Small, resigned four days after the Senate froze a $17 million increase in the Smithsonian’s funding due to what it called “out-of-control spending,” the New York Times reported March 27. Small, a former executive of Citibank and Fannie Mae, came under fire after an internal audit revealed his routine indulgence in lavish perks on the museum complex’s dollar.

* Wal-Mart Stores increased its charitable giving 10 percent last year to $272.9 million, a growth rate lower than the previous year, but ahead of Wal-Mart’s 7 percent rise in profit in 2006, the Associated Press reportedMarch 27. With its donations, made mostly at the local level, the company will likely keep its position as the top U.S. corporate cash donor, as ranked by The Chronicle of Philanthropy in 2005.

* A mystery donor who promised $5.8 million to the cash-strapped arts community of San Jose, Calif., has disappeared, leaving behind thousands of dollars in unpaid hotel bills, the San Jose Mercury News reported March 20. Claiming to have come into a large inheritance, the man, who said his name was Emilio Maschino, wined and dined on others’ bills while charming them with proposed real estate deals and philanthropic endeavors.

* Diana Aviv, CEO of Washington, D.C.-based Independent Sector, does not expect Democrats to continue the large-scale reform of charities and foundations undertaken by the previous Republican-controlled Congress, the Pittsburgh Post-Gazette reported March 24. High-profile mismanagement at charities including the American Red Cross, the United Way and the J. Paul Getty Trust, produced a charge for aggressive reform in nonprofit governance and management led by U.S. Sen. Charles Grassley, an Iowa Republican.

* The community-service boom may be less genuine than many would hope, the New York Times reported March 25. From misdemeanors absolved through a few days spent cleaning highways to high school students’ hours logged at a homeless shelter in the pursuit of acceptance by the elites of higher education, “compulsory” community service may do less good than it could, the article says.

* The unprecedented boom in the formation of new nonprofits not only is making competition more fierce and fundraising more costly, but is responsible for a rash of “bad behavior for good causes,” says a New York Times column dated March 25. Lawsuits over filched names, excessive overhead costs, “waste and confusion created by overzealous sympathizers” and personal image enhancement are all dangers of the new philanthropy game.

* Venture philanthropy, a business-based approach to charitable giving, is catching on in Israel, fueling a proliferation of larger checks, donor consultants, and a new generation of funders seeking more active roles in the organizations they fund, the Jerusalem Post reported March 22.

* Nonprofits are finding themselves helpless in the face of a surge in low-income homeowners seeking aid as they face foreclosure on their homes due to mortgages they can no longer afford, the Wall Street Journal reported March 23 [subscription only].  Approximately 1,500 nonprofits work in housing or credit counseling in the U.S., but they are being overwhelmed by the need created by the predatory lending practices of mortgage brokers that target borrowers who have poor credit histories.

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